4/28/2020 Diagnostics labs in India: Amid regulatory issues, diagnostic chains bet on mom-and-pop labs to expand presence, Health

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Rashmi Mabiyan
ETHealthWorld
Updated: October 25,
2019, 13:09 IST

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


Diagnostics » Diagnostics labs in India Thyrocare SRL Metropolis Diagnostic industry Ameera Shah

Amid regulatory issues,



diagnostic chains bet on mom-



and-pop labs to expand



presence




According
 to a report by Research and Markets, the industry is expected to
witness consolidation with several small and independent laboratory players
becoming franchisees for the larger players.

India’s $9 billion diagnostic industry is witnessing a strong growth that is going to

accelerate with the rise in awareness on preventive health, changing lifestyle and
insurances fuelling the preventive healthcare segment. Currently, the diagnostic
sector in India is highly fragmented with standalone centres accounting for 45-50%
and the organised ones having less than 35% share while the rest are hospital-
based diagnostic centres. While the diagnostic industry has always been
dominated by the unorganised players, major diagnostic chains are slowly
disrupting the market by acquiring smaller local labs.

In a latest among acquisitions, Carlyle backed Metropolis Healthcare Ltd.

announced the acquisition of four laboratories in Surat, Gujarat for a combined
consideration of Rs 18 crore.

According to a report by Research and Markets, the industry is expected to

witness consolidation with several small and independent laboratory players
becoming franchisees for the larger players.

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4/28/2020 Diagnostics labs in India: Amid regulatory issues, diagnostic chains bet on mom-and-pop labs to expand presence, Health News, ET…

Over the last

News 5-7 years,Blogs
Interviews the number
Feature of
 mom-and-pop labs has
Medical Specialties hovered
Data around
& Analytics the
 HealthTV Bran
range of 1 lakh and organized labs have achieved sizeable growth. Frost &
Rashmi Mabiyan
Sullivan’s
ETHealthWorldIndustry Analyst, Khushbu Jain, says that these organized labs have
Updated: October
flourished 25,
because they are supported by private equity investors and thus, capital
2019, 13:09 IST
to acquire existing labs that have good patient catchment, necessary processes,
and protocols in place.

“The unorganized and smaller labs offer a chance to the bigger players to expand
their hub and spoke structures and thus, their presence pan-India,” added
Khushbu Jain.

According to Arindam Haldar, CEO at SRL, “The diagnostic industry is very slowly
moving
 towards consolidation and the consumers and doctors are also getting
more quality conscious, which benefits the organised players.”

Though accessibility of preventive care may get resolved slowly through these
hub-and-spoke models, however, the industry continues to see challenges

emerging from no recognition and regulation allowing unauthorised lab functioning
in poor quality leading to wastage of patient’s money, pricing pressure due to rising

competition, lack of capacity building due to limited pathologists and radiologists,
and lack of awareness on effect of value, quality healthcare services.


Regulatory challenges
troubling
 diagnostic growth
path
Today as the ageing population
and changing lifestyles are
causing increase in conditions
like cancer, diabetes and heart
diseases eventually leading to
the growth of the diagnostic
services, through imaging,
ultrasound, radiology and
pathology laboratories. People now are opting for early wellness testing and
diagnosis as it increases the chances of a positive outcome, saving lives and cost
of further treatment.

“This revolution has come with cognizance of huge healthcare savings in the long
run yielded from a small investment in preventive care,” said Analyst Kushbu Jain.
She further attributed a good part of this growth to corporates and insurance
programs, which are maturing today with lessons from the West.

Thyrocare Chairman, Dr. A. Velumani believes wellness testing will grow double
than that of sickness testing for the next 20 years - till wellness is 70% of the total,
which is only 10% currently.”

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4/28/2020 Diagnostics labs in India: Amid regulatory issues, diagnostic chains bet on mom-and-pop labs to expand presence, Health News, ET…

 News  Interviews Blogs Feature  Medical Specialties  Data & Analytics  HealthTV Bran
Diagnostic
Rashmi Mabiyan
services play a vital role in spotting the health problems and informing
medical interventions that make the integrity of the test a crucial aspect as the
ETHealthWorld
Updated: Octoberthe
doctor takes 25, decision based on the reports. Right from the time the blood
2019, 13:09 IST
sample is collected, the pre-test, and till the report reaches, the whole integrity of
the system must not be breached as it could result in the whole detection and

treatment process getting complicated.

“Our qualified fellow clinicians believe that testing is just a process of withdrawing
the blood sample, running the same on the machine and issuing the report.
Hence,
 the issues which population will face include lack of accuracy in reports,
improper methods of testing and delayed turnaround time in reports,” said Dr.
Aparna
 Jairam, Founder of Asavlee.

Recognising

the proliferation of unauthorised pathology labs as the biggest risk,
SRL's Arindam Haldar said, “In India, a large number of labs are run by under-
qualified technicians. Absence of qualified personnel coupled with lack of quality

procedures may suspect the possibility of erroneous reports, incorrect diagnosis
and an increased patient distrust in pathology.


“
The discovery of 875 illegal pathology clinics
Today anybody can

found operating in Delhi after High Court’s
open a diagnostic notice seeking closure of these labs portrays
lab

be it good the dubious state of diagnostic industry and
how lack of regulation has resulted in
quality or no mushrooming of path labs putting the patient’s
quality and life at risk.
provide poor
According to Managing director of Metropolis,
services eventually Ameera Shah, today anybody can open a
leading to the diagnostic lab be it good quality or no quality
general erosion of or provide poor services eventually leading to
the general erosion of quality in the industry.
quality in the
industry.
”
~ Ameera Shah, Managing director of
Metropolis
“Correct lab workup is essential for good
clinical diagnosis. However, the business
ethics is sadly lacking and humans are
exploited with unnecessary tests in a run to make more money,” said Dr. Ratna
Devi, Board Chair, Indian Alliance of Patient Groups.

While the growth of diagnostics labs is important to make healthcare accessible

and affordable to everyone, however, low-quality pathology laboratory reports
often are not accepted by doctor resulting in wastage of patients money and
causing a leakage in the industry.

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4/28/2020 Diagnostics labs in India: Amid regulatory issues, diagnostic chains bet on mom-and-pop labs to expand presence, Health News, ET…

Dr News
RanaMehta, Partner
Interviews and Leader
Blogs Healthcare
Feature  at PWC 
Medical Specialties said,Data
“There is a large
& Analytics  HealthTV Bran
untapped market with a lot of people having no access to diagnostic tests, so as
Rashmi Mabiyan
long as we ensure quality from all the players, it could be a very vibrant market.”
ETHealthWorld
Updated: October 25,
2019, 13:09 IST
The pending state of the Clinical Establishment Act
To standardise the healthcare services, the centre enacted the Clinical

Establishment (Registration and Regulation) Act, 2010, which makes registration a
must for running a clinical establishment. Till now, only eleven states including
Arunachal
 Pradesh, Himachal Pradesh, Rajasthan, Jharkhand, Mizoram, UP and
Uttarakhand have adopted the act but many of them are yet to implement it.

Speaking on the implementation of regulations, Ameera Shah, said, “20 years ago,
we all
 hoped that the government will regulate the industry to make it have
minimum standards for basic level of quality that you need to operate in the
business

of life and death for patient, but unfortunately that has still not
happened.”


However, she further added, “The government is showing intent to regulate the
industry...I hope to see these regulations getting implemented and be effective

across states and industries.”

“

Though the government is working towards
Without proper regulating the diagnostic industry with the
execution,
 laying proposal of “minimum standards” proposed in
down standards, the amendments for the Clinical Establishment
(Central Government) Rules, 2019, health
even if they are facilities not complying with prescribed norms
robust and in terms of infrastructure, manpower,
comprehensive equipment, drugs, support service and records
will not be granted registration.
will not be of
much use.
”
~ Mahendra Bajpai, Director at Institute
of Medicine & Law
Highlighting the crucial aspect of regulations in
the diagnostic industry, Mahendra Bajpai,
Advocate, Director at Institute of Medicine &
Law said, “Without proper execution, laying
down standards, even if they are robust and comprehensive will not be of much
use.”

The lack of regulation is leading to pricing pressure, deficiency in quality services,

and proliferation of labs not following standard treatment protocols which results
not only in compromised patient safety but also concerns accountability in
healthcare costs.

“The biggest challenge is the oversupply in the industry because anybody and
everybody can start a pathology lab or an imaging centre without any

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4/28/2020 Diagnostics labs in India: Amid regulatory issues, diagnostic chains bet on mom-and-pop labs to expand presence, Health News, ET…

consequences and thisBlogs

News  Interviews leads to a deficit
Feature of accountability
 Medical Specialties towards
Data & the patients
Analytics and
 HealthTV Bran
the doctor,” quoted Ameera Shah.
Rashmi Mabiyan
ETHealthWorld
Updated:
ThoughOctober 25,
diagnosticsproviders will continue to face competitive challenges,
2019, 13:09 IST
however, the quality of services should remains unaffected. Today hardly 1% of
the path labs are accredited by NABL, under the Quality Council of India, there
 to be greater enforcement of accreditation and recognition of the value that
needs
quality services bring to the wider healthcare system.

Soon the Delhi government plans to implement the Delhi Health Bill 2019 which is
a modified
 version of the centre’s Clinical Establishment Act to regulate diagnostic
labs, nursing homes and hospitals. The government needs to recognise the effects
of volumes
 and value trends in diagnostic industry and lay emphasises on strict
monitoring, implementation and not leave it at making regulations alone.

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Rashmi Mabiyan
ETHealthWorld
Updated: October 25,
2019, 13:09 IST
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