Indian healthcare taps the African market

In mid-February the world’s heaviest woman left her home in Alexandria, Egypt, for the first time in 24 years, boarding a plane to India for a sleeve gastrectomy at Saifee Hospital in Mumbai.

Getting 36-year-old Eman Ahmed Abd El Aty to her hospital bed required the use of a cargo plane, a truck and a crane. “We took it in as a humanitarian cause to save a life and as a medical challenge,” says Muffazal Lakdawala, her surgeon, who is happy with her progress since the operation. While Ahmed’s story is remarkable, the location of her surgery is not.

Abd El Aty is just one of thousands of Africans travelling to India each year for so-called medical tourism. In response, cash-rich Indian hospital groups are starting to make significant inroads into Africa’s struggling healthcare sector, with potentially transformative results.

India has attracted medical tourists since the 1990s, “but in the last five to seven years it has really started to take off,” says Ravi Ramamurti, professor of International Business and Strategy at Northeastern University. According to a joint report by the Confederation of Indian Industry and professional services firm Grant Thornton, India’s medical tourism market could be worth $8bn by 2020.

The International Healthcare Tourism Congress (IHTC) held in Bangalore in March declared healthcare tourism “the next crown jewel that could shape the future of India’s economy”. India’s success lies in its modern equipment, highly skilled doctors, streamlined visa processes, inexpensive locally-manufactured drugs and English as its lingua franca.

Most importantly, Indian groups like Apollo Hospitals, Narayana Health and Medanta are more affordable than their international competitors. “The prices at Apollo Hospitals will be one-third to one-tenth of the prices at hospitals in the US and UK,” says Harinder Sidhu, the company’s head of International Business. While a hip replacement could cost up to $57,000 in the US, Apollo patients pay just $7,200, he says.

“There is a dark side to medical tourism,” says Ramamurti. Indian hospitals do price discriminate against medical tourists, he says, though they are still cheaper than elsewhere. And naturally some patients shop around for the lowest prices, inviting more inconvenience and risk. Generally though, standards are high. “Every treatment that a patient gets is peer-reviewed by three doctors,” says Anitha Niranjan, whose company, CIMGlobal, organised the IHTC.

With surging demand for Indian healthcare, hospitals have refined their product. Alongside consultations, drugs and the procedure itself, patients receive luxury air-conditioned hospital accommodation, food and airport transfers. Accompanying relatives are given food, accommodation and even a jaunt to the Taj Mahal.

Fortis Healthcare – a large chain with 45 facilities globally – offers patients a SIM card upon arrival, visa assistance, language interpreters, currency conversion at the hospital and complimentary wifi. All have international patient teams, and many have permanent kiosks or even clinics at major airports to welcome clients. 

These benefits have seen India attract thousands of African patients. According to the Indian High Commission, 18,000 Nigerians entered India on medical visas in 2012, spending $260m.

That year, 47% of Nigerian medical tourists chose India for their treatment. In 2015 East Africans spent around $1bn on Indian healthcare. The Kenya Network of Cancer Organisations has even accused Kenyan doctors of receiving kickbacks of up to KSh102,000 ($987) per patient for referring them to Indian hospitals.

Currently Bangalore-based Narayana Health treats 3,000 to 4,000 African patients annually and the number is increasing at 25 to 30% per annum, says Guru Prasad, head of International Patient Care. Narayana operates permanent information centres in Nairobi and Lagos.

Despite its rising prosperity and burgeoning middle class, healthcare in Africa still lags behind most of the world, says Sidhu. According to a 2006 World Health Organisation report, sub-Saharan Africa contains 36 of the 57 countries globally characterised as having a critical shortage of health service providers.

As of 2009 in Africa, 1.3% of the world’s health workers cared for the victims of 25% of global disease. Many African doctors practice overseas and without the volume of resources and equipment seen in India, while African private healthcare remains extremely costly. Naturally, those that can afford it are looking overseas for their treatment.

Opening facilities in Africa

However, in recent times Indian hospital groups have been eyeing sizeable investment in Africa. By setting up hubs and fostering demand within African countries, Indian companies can expand into smaller cities and towns. “This is consistent with what they have been doing domestically,” says Ramamurti, referring to the way smaller clinics offer diagnosis and consultations, and refer patients to hubs in large cities.

“Opening up a facility in Africa helps increase the number of medical tourists and allows them to do follow-up care,” says Ramamurti. Telemedicine – the remote delivery of healthcare services using telecommunications technology – is being used for consultation, diagnosis and postoperative care. African doctors are also receiving training in India, says Niranjan, who plans to take delegations to Kenya and Uganda this year to discuss investment and collaboration.

Large hospitals are also under construction. Narayana is building a 130-bed specialist cardiac hospital in Nairobi in partnership with the International Finance Corporation and the Abraaj Group. Medanta, a large group headquartered near New Delhi, established Medanta Africare, an ultramodern medical centre in Nairobi in 2012. Collectively Apollo, Moolchand and Fortis have established clinics in Nigeria, South Africa, Mauritius, Ethiopia, Tanzania, Uganda, Mozambique and Zimbabwe.

The UN expects Africa’s population to double to around 2.4bn by 2050. And with consumer spending expected to hit $1.4 trillion by 2020 according to the McKinsey Global Institute, this foothold could prove lucrative for Indian healthcare groups.

Nevertheless, Indian representatives insist their intentions are humanitarian. “We want Africans to be self-dependent for their medical requirements,” says Prasad. Niranjan agrees: “It’s about using doctors for the good of humanity,” she says. While they still price out most Africans, Indian chains are meeting pressing healthcare needs and fanning out across the continent. And with their high-volume cost-minimisation strategies, Indian companies seem uniquely well positioned to make such inroads into Africa.

Charlie Mitchell