Are You Building a Healthcare Practice in Tier 2 & 3 Cities? Here's a Helping Hand

 

 

A huge chunk of the Indian population lives beyond the Tier 1 cities, making it imperative to roll out healthcare in tier 2 & 3 cities. Given the skewed doctor-patient ratio beyond the boundaries of the metropolises, the Indian government and many private organizations and startups are starting to initiate services that may help healthcare practice in these areas. How to start building a healthcare practice in tier 2 & 3 cities and at the same time incentivize the professionals to work there is a moot point of this sticky challenge. Instead, entrepreneurs and management must focus their efforts on collaborating with healthcare consultants and local authorities, as well as strategically navigating laws, to successfully launch their healthcare business.

 

The Government Initiatives for Healthcare in Tier 2 & 3 Cities

Investment diversification has risen for the overall development of healthcare infrastructure in Tier 2 and 3 cities. One visibly effective example includes the establishment of six AIIMS facilities in tier 2 cities, including Rishikesh, Bhubaneswar, and Bhopal, along with planned locations in Awantipora (J&K), Rewari (Haryana), Darbhanga (Bihar), and Madurai (Tamil Nadu), which advances their goals. 

 

Other initiatives from the government include:

 

• Cutting-edge Technologies: Public healthcare institutions are adopting advanced digital healthcare and telemedicine solutions.

 

• Structured Programs: Programs like Ayushman Bharat, Ayush Mission, and Pradhan Mantri Swathya Suraksha Yojna are transforming healthcare access in small towns and rural areas.

 

The Ayushman Bharat scheme has already benefited over 50 crore individuals, with 40% coming from the lowest socio-economic groups. Additionally, the AYUSH sector, which was valued at $18.1 billion from 2014-2020, is expected to reach $23.4 billion this year.

 

 

The Present Healthcare Startup Scenario in Tier 2 & 3 Cities

Healthcare facilities in metropolitan areas may compete globally; however, the penetration of health in Tier 2 and Tier 3 cities has been slow. However, the past few years have seen a difference of opinion. 

 

Large healthcare organizations, including global giants, are expanding beyond major cities and investing in smaller towns. Until recently, advanced diagnostic services like radiology, MRI, CT scans, and pathology were rare in smaller towns. Tier 2 and 3 populations had to travel to cities to consult a specialist. But the scenario is changing. 

 

Tier 2 and Tier 3 cities are now attractive markets in terms of return on investment (ROI). These areas have less competition, lower healthcare penetration, and higher internet usage, which provides opportunities for start-ups. Furthermore, the Indian government has created an economic and regulatory environment that encourages start-ups to thrive in non-urban areas.

 

Private healthcare brands have already entered these areas, with a significantly overwhelming response. Healthcare start-ups are driving this shift, introducing new technology and innovation while supporting both patients and providers. 

 

• Teleconsultation and real-time messaging allow consultation services from across the country.

• Industry-standard medical facilities are now available, drawing patients from smaller townships, and semi-urban and rural areas. 

• Patient engagement platforms help patients research, book appointments, access the best nearby medical facilities, and connect with them easily. Their presence is significant in remote sectors where healthcare may be far away. 

• Cloud platforms, AI/ML applications, and AR/VR simulations are already established processes with easy-to-use mobile applications that bridge the technology gap in healthcare.

 

3 Steps on How to Start Business in Tier 2 & 3 Cities in Healthcare

To start business in Tier 2 & 3 cities, a healthcare provider, both professional and organization, must keep the juggernaut of healthcare rolling. While it's a good idea to work in sync with the government, healthcare investors, and healthcare professionals, it's even better to have your business strategies in place.

 

Thorough research: Analysis of demographics and trends in healthcare demands

Market analysts, advisors, and healthcare consultants can assist you with this task. In Tier 2 and Tier 3 cities of India, populations tend to be highly diverse, with varying healthcare needs. 

A few key demographic trends that should guide your business planning include:

 

Age Distribution: Many Tier 2 and Tier 3 cities have younger populations, but also a growing elderly population that requires chronic disease management (diabetes, hypertension, arthritis, etc.).

 

Income Levels: While income levels in these cities are rising, a large proportion of the population remains highly price-sensitive. There is often a preference for affordable healthcare services.

 

Urbanization and Migration: Rapid urbanization in these areas is increasing the demand for healthcare infrastructure. Many people are migrating from rural areas to Tier 2 and Tier 3 cities, bringing unique healthcare needs along, such as maternal and child care, primary care, and preventive health services.

 

Rising Burden of Non-Communicable Diseases (NCDs): India’s healthcare burden is shifting from infectious diseases to lifestyle-related diseases like diabetes, heart disease, and cancer. Tier 2 and Tier 3 cities are also witnessing this trend, driven by changing lifestyles, dietary habits, and urbanization.

 

Emerging Trends in Healthcare Demand

 

Preventive Healthcare Awareness: There is growing awareness about preventive care, leading to increased demand for diagnostic services, vaccination drives, and health check-up packages.

 

Ayurveda and Traditional Medicine: In Tier 2 and Tier 3 cities, traditional and alternative forms of medicine like Ayurveda, Yoga, and Naturopathy are also quite popular. Integrating these with modern medicine can be a smart business approach.

 

Rise of Digital Health: With improved internet penetration, there is an increased willingness to explore telemedicine, online consultation, and e-pharmacy services. Offering digital healthcare solutions can cater to this growing trend.

 

Understand the existing systems, healthcare operators, and key players in the market. 

Understanding the present landscape gives you an idea about the gaps in the system that are the potential scope of business. Collaborating with established healthcare providers can help reduce the initial operational expenses and build traction whilst building confidence in the community. It is the first step to networking.

Working with a healthcare consultant can help you with field research, analysis, and identifying market key players who can be potential collaborators. 

 

Government-run hospitals and clinics dominate the healthcare scene in these regions but are often underfunded, and overcrowded, and face issues like equipment shortages and lack of qualified staff.

 

Small private clinics, individual practitioners, and diagnostic centers exist but are fragmented and barely regulated. Many patients prefer private care due to perceived better quality, despite higher costs, but are unsure about honest opinions and safe treatments. 

 

Tertiary care and specialized services like oncology, cardiology, and advanced surgeries are often lacking in Tier 2 and Tier 3 cities. Patients often travel to larger cities for such services, representing a significant business opportunity.

 

Study, analyze, and engage in consumer needs and behavior: How the people of Indian Tier 2 and 3 cities leverage healthcare and their problems.

The healthcare systems of Tier 2 and 3 cities have three telltale characteristics:

 

Affordability: Most people in these cities prioritize affordability over premium healthcare services. Healthcare financing remains limited, and many depend on out-of-pocket expenditures. Offering budget-friendly or subscription-based healthcare models could resonate well.

 

Health Literacy and Awareness Gaps: Low health literacy is a major roadblock. There is zero awareness of preventive healthcare, the importance of regular check-ups, or lifestyle management, leading to late-stage diagnoses of diseases.

 

Preference for Established, Age-old, and Trusted Providers: There’s a strong sense of community trust in local doctors and clinics. New businesses need to overcome skepticism, which can be achieved through word-of-mouth marketing, health camps, collaborative approaches, and community engagement.

 

• Identify the rules, regulations, and governmental facilities.

Needless to say, regulatory compliance is critical when starting a healthcare business. This includes licensing and accreditation, drug and pharmacy regulations, and telemedicine guidelines. As discussed there are several government schemes aimed at promoting affordable healthcare in Tier 2 and 3 cities. Leveraging these can reduce costs and offer patients better access.

 

• Studying the other infrastructural facilities in the city

To attract talent to tier 2 and 3 cities, it's not enough to study hospital's infrastructure but also the city's broader ecosystem. This includes quality educational institutions for their children, their orientation to primary healthcare, job opportunities for those non-medical fields, good air and road connectivity to major cities, and a stable and safe political environment.

 

ANASTOMOS—Contributes to the Cause

Building a healthcare practice in Tier 2 & 3 cities is a Herculean task, no doubt, but it also offers scope for the expansion of healthcare as a service. 

 

Anastomos is a comprehensive career resource for healthcare professionals. As India’s first exclusive healthcare providers’ network, the platform is designed by healthcare experts who are seasoned clinicians with business expertise and offers services for all professionals in the healthcare industry. 

 

We understand the A-Z of all the questions you have in mind when heading out to research the start business in Tier 2 & 3 cities, invest in the healthcare sector, and build an expansive healthcare profile. 

 

The Anastomos Marketplace has a cohort of professionals who assist in every aspect of the business. This includes healthcare business consultants, recruitment professionals, statutory compliance services, legal help, and healthcare architects who can help set up the business right from scratch. 

 

If you also need an expert mentor to help you understand your business scope, the Anastomos Learning & Development section can help.

 

Feel free to reach out; we are a ‘Sign-up’ away!