Accessibility, Affordability & Quality
The above three qualities will define the future of imaging in India
By: Dr. Vidur Mahajan
The future is an output of present trends and hence to describe the future of imaging in India, I have adopted a "trend-based" approach. Additionally, I believe that it is impossible to talk about the future of any industry without having strong problems that are solved by any such trend. Hence, for the radiology and imaging industry, I have chosen the three most commonly-discussed problems in imaging: access, affordability and quality of services. As I dive deep into each of the trends that I see evolving in imaging in India, I will attempt to justify if and how each will address these three extremely-fundamental issues.
Import duty has been increased by around 5% over the last one year, implying a straight 5% increase in capital costs – a 3.0 Tesla MRI machine costing 10 crore rupees is now 50 lakh rupees more expensive
Trend 1: A move away from metropolitan cities, towards tier-1 and 2 cities
We may not believe it, but the imaging market in almost all large metro cities is saturated. Most imaging centres are resorting to a "price war" strategy, which leads to the following scenario – there are multiple imaging centres close to each other, offering their services at extremely low costs (even as low as Rs. 1,800 for an MRI) on the same day. This implies that there is a definite oversupply to imaging services (at least MRI and CT), which has led to the aforementioned "price war". A war, it seems, has casualties – almost all large metropolitan cities of the country has seen at least some small and large imaging centres either close down or try to sell out. This has two potential outcomes – first, players would need to start competing on quality, within each of their price segments. For example, there might be multiple low-cost players out there willing to do an MRI at Rs. 1,800 – patients and physicians will choose the best quality within that price band. The same would apply to "high-end" players with higher charges. Second, organised players and those with bandwidth to expand would need to look at newer markets, which they can either disrupt with lower prices or better quality, or both. These newer markets would inevitably be the tier-1 and 2 cities where high-end imaging (CT, MRI, PET-CT, etc.) are not yet freely available.
Trend 2a: Public-Private-Partnership (PPP)
Another major driver of both access and affordability in the Indian imaging market currently and in the future, is Public Private Partnerships. Still at a fairly nascent stage, there is no question that PPP is the way forward for high-end healthcare (and imaging) to penetrate into relatively-remote parts of the country, but unfortunately, viability seems to be a major concern in most projects. Having run two PPPs myself, I can personally vouch for this concern. Some players have got initial success, however, long-term returns at least in the current scenario seem unrealistic. The key driver for this is the high private investment required (mostly for 3.0T MRIs and 128 slice CTs) and the government's apprehensiveness towards risk-sharing with the private partner.
Trend 2b: Private-Private-Partnership
A derivation of Public-Private-Partnership, the term Private-Private-Partnership is used by Dr. Harsh Mahajan, Founder of Mahajan Imaging, to denote that the future of radiology in India depends on partnerships between private enterprises, i.e. hospitals, imaging centres and equipment vendors. The idea is that each entity does what it does best based on their area of expertise enabling optimal quality with reasonable return for each entity involved.
Trend 3: Artificial Intelligence (AI) will play a greater role in radiology
No article about the future of imaging can be complete without a mention of AI. Having collaborated with more than 10 AI companies, I can safely say that AI is bound to come into the radiology practice, but I would be cautiously optimistic if I was to say that it would happen in less than five years. Nevertheless, the role that AI will play in India is fairly obvious – the first thing India needs is a robust tuberculosis (TB) screening program. Many Indian (Qure.ai) and international (Lunit, Korea) AI companies are actively working on developing algorithms that can automatically detect TB in lung X-Ray. Similarly, algorithms for reading emergency CT scans can help triage patients in remote parts of the country without a radiologist being physically present. With access to extremely fast and low-cost (or free!) 4G and 3D mobile internet, AI can play a tremendous role in improving all three – access, affordability and quality – of imaging in India.
Trend 4: Cost pressure and price pressure
Imaging has definitely not been immune to increase in costs of both equipment and manpower, and reduction in affective price of services. Import duty has been increased by around 5% over the last one year, implying a straight 5% increase in capital costs – a 3.0 Tesla MRI machine costing 10 crore rupees is now 50 lakh rupees more expensive. Same applies to recurring costs such as maintenance costs, the tax on which has increased from 8% to 18%. Additionally, a scarcity of trained radiologists means higher cost of retaining skilled talent, which adds another burden onto the business. To make predictions about the future of radiology in India it is essential to keep these factors in mind since eventually it is the patient who will be paying a premium for this, and if not, then businesses with borderline profitability will slowly shut down. Along with this cost pressure, there is immense pressure on the healthcare sector (and hence the imaging industry by proxy) on reducing prices charged to patients. While currently there is no direct price control exerted by the government on imaging services (there is a definite possibility though), there is a definite indirect control. This comes in the form of the Central Government Health Scheme (CGHS) pricelist, which puts most imaging tests at around 30%-50% of market prices. This works well in situations where the number of patients scanned at CGHS rates is restricted since imaging centres cater to a portfolio of patients and the CGHS prices even out. But today, CGHS prices are extrapolated to all government empanelments, Public-Private-Partnerships and even "free" diagnostics schemes, increasing the number of patients scanned at these prices, in turn reducing the average price of imaging procedures. This is a trend that I personally believe will only increase and price pressure is something that all imaging providers across India should be ready to face. Needless to say, reducing prices may force players to reduce quality and even curb their expansion plans.
Trend 5: Make in India
Both, the private and the government sectors are pushing hard to make medical devices in India. GE Healthcare, one of the world's largest medical equipment manufacturers, has already developed a CT Scanner from scratch, that is even produced in India (and exported across the world). The CT Scanner, called the ACT, is an affordable medium-end CT scanner designed to operate in the uncertain conditions that India might throw at it (for example, recurrent power loss). Additionally, Indian companies like Cura have taken on the mammoth task of designing and producing an MRI scanner in India; again with a view of lowering costs. The government is also not behind having set up a task force to design and develop an MRI machine in collaboration with the Indian Institute of Technology (IIT), Mumbai. Unfortunately, while such innovations have the potential to drastically reduce the cost of various equipment, the technical challenges in such complicated technologies from design to product are huge, implying that it might be several years before these technologies see the light of day.
Trend 6: Rise of 2nd hand equipment
Another interesting but obvious trend is the rise of 2nd hand equipment sale. Many players in large cities invested in high-end equipment like CT Scanners and MRIs back in the late 90s and early 2000s. These equipment are now gradually being replaced by newer technologies and are bought by companies that specialise in refurbishing and installing such equipment. Post-refurbishment these equipment are installed in smaller towns/cities providing the much-needed imaging services where there were none in the past. Naturally, this leads to improvement in access (since machines go to places where there were none before) and affordability (these machines are significantly cheaper than full-priced ones).
Trend 6: Skill Development
Needless to say, there is a lack of trained manpower in India, especially in the domain of medical imaging where technology changes on a yearly basis. Unfortunately, there remains a deep need for trained manpower, both technical and clinical, who can be put onto the care of patients from the very first day. There are two approaches to solve this important issue – first, development of broad-based programs. These can be one-year/two-year programs where youngsters are taught how to perform X-Rays, CT Scans, MRI scans etc. with a mandatory 6-month internship. Organisations such as GE Healthcare and Vivo Healthcare have started such programs and their effect remains to be seen. The second is the development of highly specific sub-specialty courses. For example, at Mahajan Imaging, we conduct 2-5 days hands-on courses on topics such as musculoskeletal MRI, cardiac CT and neuro MRI, where radiologists from all across India come and learn the finer nuances of these subjects in a practical way leading to immediate improvement in their reporting ability. It cannot be emphasised enough that availability of trained manpower is a fundamental requirement to solve India's access and quality problems in a permanent way. In summary, one should be cautiously optimistic about the future of imaging in India, at least from a financial perspective. That said, India is uniquely positioned where it has the scientific, technical and clinical expertise to address all the problems facing the industry and come out on top. Lastly, from an impact perspective, there is probably no other sub-sector in the healthcare industry with more scope for changing people's lives – having access to high-quality imaging services at an affordable price will enable more accurate treatment of diseases, leading to better clinical outcomes and overall economic prosperity.