Background
South Asia is generally considered to include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Over the past 20 years, the region has experienced robust economic growth, averaging 6 percent per year. As a result, poverty rates have declined, with the percentage of South Asians living on less than US$1.25 per day decreasing from 61 percent to 36 percent between 1981 and 2008. While the region is still home to approximately 44 percent of the developing world's poor, growth and development in South Asia are expected to continue.
The largest and most influential country in the region is India. With approximately 1.3 billion people, India is the fourth largest global economy by purchasing power parity (PPP). India's gross domestic product (GDP) reached nearly US$2 trillion in 2012, and it is expected to continue increasing at a healthy rate as the country further integrates into the global economy. Growth will also be driven by increased domestic demand as India's burgeoning middle class expands from roughly 50 million in 2007 to almost 600 million people between by 2025.
India's healthcare system is plagued by low spending levels. Healthcare expenditure per capita was only US$59 in 2011. The country's private and public sector combined spent only about 4 percent of GDP on healthcare in 2011, although the government is planning to increase its share from 1.4 percent to 2.5 percent of GDP over the next five years. In the past half-century, India's public sector has steadily given up market share to the private sector in providing healthcare. Accordingly to one study, the private sector accounted for over 90 percent of all hospitals, 85 percent of doctors, 80 percent of outpatient care, and almost 60 percent of inpatient care.
Fortunately, India's private sector has been responsible for some remarkable innovations in healthcare delivery. Several major hospital systems in the country are able to deliver high-quality outcomes at a fraction of the cost of care in developed country settings. For instance, one cardiac care center offers open-heart
surgery for less than US$2,000 per patient, with outcomes similar to those at US-based centers where the price tag can exceed US$100,000.