Meditech – A User Perspective & Requirements

1. Meditech – A User Perspective & Requirements

2. Hospitals: Proxy for India’s healthcare boom • The Healthcare Delivery Market in India pegged at around US$ 38 billion in 2008, compared to US$ 7.7 billion Pharmaceuticals Industry and offers a huge growth opportunity • India has 17% of the world's population, but one of the poorest healthcare infrastructures among growing economies and the lowest spend on healthcare (~5% of GDP) • Demographic changes, improving income levels, changing lifestyles, and rising insurance penetration etc will result in a rise in discretionary spending on healthcare • Accessible, reliable and affordable healthcare continues to be a challenge • Opportunity in healthcare being significantly leveraged by private healthcare providers • Expected to generate employment opportunities for 9 million people by 2012 15% 2

3. Evolution of Healthcare in India India: Per Capita Income over the last few years (USD) Percentage share of India in world health parameters Per capita health expenditure – $33 compared to $ 2,548 in US Source: FICCI and Ernst & Young (2008) Distribution of Private Healthcare Providers Healthcare parameters per ‘000 population US has 3.2 beds per 1,000 population and spends ~ US$ 2 trillion on healthcare Source: FICCI and Ernst & Young (2008). Source: FICCI and Ernst & Young (2008) 3

4. India: Potential to become the Global Healthcare destination Overview Cost of Important Procedures (US $) • Medical value travel is one of the most lucrative segments of the healthcare sector and is expected to grow into a US$ 1.5 billion industry by 2010 • Potential to contribute US$ 1.2 – 2.4 billion additional revenue for up-market tertiary care hospitals by 2012, and will account for 3 – 5% of total healthcare market US UK Thailand Singapore India 100,000 1,60,000 250,000 300,000 48,000 38,000 41,726 30,000 292,470 200,000 50,109 18,000 14,250 10,500 62,500 75,000 8,000 10,000 15,312 13,000 150,000 140,000 25,000 12,000 4,800 4,800 30,000 69,000 5,000 5,200 Heart Surgery Heart Valve Replacement Bone Marrow Transplant Liver Transplant Knee Replacement Hip Replacement Key drivers for the growth Issues • Inadequate healthcare Infrastructure • Unstructured medico legal jurisdiction • Indians hospitals’ standards below par against the Global benchmarks of care • Lack of Accredited Hospitals and follow up care • Quality Healthcare at fraction of the cost • Availability of Skilled Doctors & Hospitals • Good reputation of Indian Doctors • Upsurge of Lifestyle diseases 4

5. Health Insurance Growing share of urban middle class households Health insurance market size (USDm) CAGR: 32% • Health Insurance market in India is expected to grow at a CAGR of 32% to reach a market size of Rs. 27,930 crore by FY15 • One of the fastest growing free economy • Ranked 4th largest economy in the world in terms of purchasing power parity • Higher service mix, increasing urbanization • Overall penetration at 2%. • Growth driven by: a) increasing awareness, b) soaring healthcare costs and c) demographic profile of the people Source: CRISIL Research 5

6. Applications of Medical Textiles • Applications range from the simple cleaning wipes to the advanced barrier fabrics used for operating rooms • New cost-effective ways to protect both hospital staff and their patients from bacteria; viruses & body fluid invasions in Operating room environments are being developed • Pre-operative & Post operative (High compression stocking, casting/splints, wound dressing) • Surgical & Operative (sutures, implants, grafts, patches, mesh, wound dressing) 6

7. Concept Product Implant Critical Consumable Critical disposable Non Critical disposable Non-critical consumable Hygiene Critical path Commodity September 2010 Business division in medical textile categories High Margin Low volumes Low Margin High volumes 7

8. September 2010 Business division in medical textile categories…contd. IMPLANTS Vascular Graft/ Endovascular Stent Soft Tissue patch Hernia Repair implants- Plugs/ Mesh Sutures Local drug delivery systems Dura substitute Orthopedic implants • Critical – Consumables • Vascular Support System • Compression Stocking & garments, Sequential compression Pump. • Orthopedic Support System • Casting, Knee braces, Splints neck pads, Bandages etc. • Extracorporeal Devices • Anti- EmbolicalStockings, Sutures 8

9. Concept Implant Critical Consumable CRITICAL DISPOSABLE Non Critical disposable Non-critical consumable Hygiene Product Critical path Commodity Business division in medical textile categories…contd. September 2010 Critical Disposable Textiles: • OT Gowns • Drapes and Wraps • Isolation kits • Swipes • Swabs – cotton based • Wound Dressing 9

10. Implant Critical Consumable Critical disposable Non Critical disposable Non-critical consumable Hygiene Concept Product Critical path Commodity Business division in medical textile categories…contd. September 2010 Commodity • Cotton Gauze • Cotton roll • Adhesive tapes (Plaster, Band-aid etc) • Cohesive tapes • Cotton balls • Surgical swabs • Tissues/ wipes • Crepe bands • Compression bands – adhesive, cohesive. • Sanitary, Nappies • Add………. • Adult Incontinence 10

11. Doctors Overcoat Uniforms Business division in medical textile categories…contd. September 2010 • Hospital Non Critical Consumables • They form a large chunk of volume of usage. The pressure to dispose them is high but to manage such cost and logistic is a challenge. • Fabrics which are water repellant would be preferred ones for various uniforms & bed linen Hospital Bed Assembly 11

12. Challenges September 2010 12

13. What it means to a product Supply? September 2010 • Approvals of imported products from FDA, CE marking and other agencies which assures highest quality standards • Indian hospitals aspiring for quality accreditation such as NABH / JCI • These agencies insists on Standard products – Challenge on Indigenous suppliers to match the international standards • Absence of compiled reliable data showing impact on infection control, usage of antibiotics etc. • Indian hospital Industry at loss without a local supply 13

14. Benefits of Quality Systems? September 2010 Benefits for PatientsAccreditation results in high quality of care and patient safety. The patients are serviced by accredited medical staff. Patient’s satisfaction is regularly evaluated.Benefits for HospitalsAccreditation to a hospital stimulates continuous improvement. It enables Hospital in demonstrating commitment to quality care. It also provides opportunity to healthcare unit to benchmark with the bestBenefits for Hospital StaffIt improves overall professional development of Clinicians and Para Medical Staff and promotes staff safetyBenefits to paying and regulatory bodiesFinally, accreditation provides an objective system of empanelment by insurance and other third parties. Accreditation provides access to reliable and certified information on facilities, infrastructure and level of care Benefits to the industry Accreditation helps in building data on the quality of the products, pattern of infection levels, usage pattern of antibiotics etc for better understanding & confidence building 14

15. September 2010 Impact of Quality Products / Service • The Institute of Healthcare Improvement reported that about 800,000 surgeries are complicated by infections annually, with a $9.5 billion cost to the U.S. health care system. According to a study published in Clinical Infectious Diseases, the increased length of stay following an infection is 18 days. • This is an opportunity loss!!! • Despite our best practices & using good products we are still challenged! • Therefore the need for better quality and innovative products coupled with service standards are the need of the hour. 15

16. Requirements of Hospitals in India • Quality products while keeping costs in check • New innovations to cater to growing demand • Organized market with marked presence of Indian players • Standards and certification in line with FDA/ UL/ CE • Setting up of state of the art labs for better and faster testing of various devices/ fabrics • Better logistics for improving the inventory controls of the hospitals • Building confidence of the end users 16

17. Hospitals are ready to reciprocate with…. • Prices worthy of value • Carry out joint programmesto study the feasibility of the products and do a proper cost analysis • Study the pattern of infection control & monitor usage of antibiotics • A total study of the complete usage cycle would help in reducing the overall spending of the hospitals • TCO with the industry to reduce their costs for better results to hospitals and increased patient satisfaction. • Investments as partners for collaboration in terms of defining, supporting and development of indigenous products for QPD 17

18. Conclusion • Healthcare is the new sunrise sector. With emergence of private players and spread to Tier II & Tier III cities there is bound to be rapid growth. • Emergence of the insurance sector will aid growth of healthcare industry but put pressure on costs. • Gap between Quality and Cost needs to be addressed by standards, specifications and certification. • Healthcare industry is ready to collaborate with the manufacturing sector for generation of standards and conducting studies on viability and cost-effectiveness of innovative products. • Ready to invest as partners for development of new products. A team-work between both the industries is a must for mutual strategic benefits 18

19. THANK YOU… Fortis Healthcare Limited 19