Service providers must capitalize on India’s medical tourism boom

The medical tourism sector in India is witnessing unprecedented growth, with projections indicating that 7.3 million medical tourists will visit the country in 2024. We project this market to expand at a CAGR of more than 20% between 2023 and 2027, reaching a staggering US $35 billion from its current US $6 billion size. The growth of Ayushman Bharat Digital Mission (ABDM) in India is also increasing the need for technological solutions and diverse services. The growing medical tourism market, supported by digital health advancements, presents a lucrative opportunity for service providers that can integrate and innovate within this ecosystem. The strategic alignment with ABDM will be crucial for capturing market share and remaining competitive in the evolving healthcare landscape. Service providers should leverage this infrastructure to offer enhanced patient experiences and operational efficiencies to capitalize on the medical tourism boom.

Ayushman Bharat has been a catalyst for changing the face of Indian healthcare

Through its Digital Mission (ABDM), Ayushman Bharat has significantly transformed the Indian healthcare landscape. ABDM offers several advantages that directly support India’s growing medical tourism sector, as shown in Exhibit 1.

Exhibit 1: ABDM can significantly transform the medical tourism offering.

*AYUSH: Ayurveda, Yoga & Naturopathy, Unani, Siddha, Sowa Rigpa and Homoeopathy.
Source: HFS Research, 2024

The Ministry of Health and Family Welfare has launched “Heal in India,” an initiative that integrates traditional and modern medical practices and serves as a one-stop destination for international patients. The portal offers guidance on treatment packages and healthcare facilities. The National Health Authority (NHA) also developed a portal under the ABDM as part of the “Heal by India” initiative. This portal connects Indian healthcare professionals with external stakeholders who need healthcare services. Healthcare professionals can register on the portal, which enables patients and recruiters to find them based on their specialty, language, and preferred country.

The Indian government continues to invite interested organizations to contribute to the development of ABDM components and solutions that can help build a digital health ecosystem. These efforts open doors for entry into India’s booming healthcare sector.

Service providers must enhance the delivery offering to address the healthcare value chain

This growing market presents numerous opportunities for service providers to offer solutions across the healthcare value chain. Emphasizing demand-driven solutions will help service providers capture more of the medical tourism market. Exhibit 2 showcases the entire healthcare value chain from a birds-eye view, covering the service (patient journey), operational (day-to-day functioning), and technological (backbone supporting the service and operational sides) aspects.

Exhibit 2: The layers of the healthcare value chain

Source: HFS Research, 2024

Service providers can act and capitalize on several touchpoints across the patient journey. There is significant scope for healthcare providers to streamline processes across the frontend, mid-cycle, and backend, considering that Indian healthcare is still new in this journey and the current system is fragmented. Exhibit 3 below identifies opportunities per the healthcare value chain for service providers to leverage technology and collaborate with healthcare providers to ease these challenges.

Exhibit 3: Service providers must leverage technology to solve multidimensional challenges

Source: HFS Research, 2024

As Exhibit 4 below shows, several service providers are working with state governments and private healthcare providers to introduce new software products and medical equipment, advancing India’s healthcare ecosystem. We need more of these to cover the overall value chain.

Exhibit 4: Service providers have a variety of opportunities to capture

Source: HFS Research, 2024

The Bottom Line: Medical tourism will continue to grow in India, presenting service providers with significant opportunities.

India’s medical tourism sector is set for explosive growth, creating vast opportunities for healthcare and IT service providers. Integrating technology and improving infrastructure will be vital to maximize these opportunities.

While service providers must uplevel their healthcare-specific solutions, it’s also critical for the government to create more effective healthcare hubs nationwide. Service providers can help healthcare providers by leveraging technology to streamline processes and improve patient experiences. Enterprise leaders must act by aligning their services with the evolving needs of India’s healthcare sector to take full advantage of the booming Indian medical tourism industry.