Telemedicine could save India $4-5 billion every year: McKinsey report

  • MGI’s analysis of 17 mature and emerging economies finds India is digitising faster than any other country besides Indonesia
  • The report also finds that the potential productivity unlocked by the digital economy could create up to 60-65 million jobs

New Delhi: The implementation of telemedicine technology could save India $4 billion to $5 billion every year and replace half of in-person outpatient consultations in the country, a report released by McKinsey Global Institute (MGI) has estimated.

MGI is the business and economics research arm of McKinsey & Company.

The report titled "Digital India: Technology to transform a connected nation" highlighted that the growth of smartphone ownership and spread of broadband internet connectivity are creating a large untapped market for telemedicine consultations.

MGI’s analysis of 17 mature and emerging economies finds India is digitising faster than any other country in the study save Indonesia—and there is plenty of room to grow. India’s internet subscriber base of 560 million is second only to that of China, but still only 40% of the populace.

Telemedicine technology includes any digital communication between patients, doctors, specialists, and clinical staff, whether via a headquarter video link at a local Common Services Centre (CSC) or a discussion on a mobile phone. These remote consultations can be between patients and nurses, midwives, or other clinical staff; directly between a patient and a doctor; or between a doctor and a specialist.

“If telemedicine replaced 30 to 40% of in-person outpatient consultations, India could save up to $10 billion and improve care for the poor and those living in remote areas. Telemedicine could replace half of in-person outpatient consultations in India, and an accelerated implementation plan could enable the country to tap 60 to 80% of this potential by 2025," the report said.

“At this scale, the technology could save India $4 billion to $5 billion while also enabling people in rural areas to reduce their dependency on unqualified medical practitioners and save time and money spent in travelling to nearby cities to obtain expert advice," it said.

The report, however, pointed out that technology alone is not a replacement for care by doctors; while some ailments can be fully treated remotely, telemedicine practices still need physical facilities where trained personnel can perform procedures, take diagnostic images, and draw fluids for tests. However, these virtual visits offer a cost-effective way to deliver medical care, particularly in rural areas with relatively few hospitals and little or no physical access to specialists, the report stated.

Emphasizing on electronic health records (EHR), the report said that consolidating individual patients’ lifelong medical history into an EHR can help healthcare providers make more accurate diagnoses and lower the risk of medical errors. Some hospitals in India already practice evidence-based care, using digital platforms to give doctors and nurses access to the best recent research to supplement their clinical expertise.

Once stripped of information that could identify patients, EHRs also could reduce administrative costs and provide data for medical research, the report said.

In parallel, the government has pitched in by drafting supportive legislation, such as the Digital Information Security in Healthcare Act (DISHA). DISHA is intended to ensure the confidentiality and reliability of digital health data by regulating how they are collected, stored, transmitted, and used.

The report also finds that the potential productivity unlocked by the digital economy could create up to 60-65 million jobs across almost all sectors by 2025. Digitization may also automate or eliminate the equivalent of 40 million to 45 million current jobs, necessitating large scale retraining and redeployment. “The changes brought by digital adoption will disrupt India’s labour force. While technology will supplant workers in some areas, it will augment them in other areas and many jobs will change as machines complement humans in the workplace," said Anu Madgavkar, an MGI partner who headed the research.

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