2024

C A T A LY Z I N G D I G I T A L
H E A LT H I N I N D I ACritical pathways for user
adoption & driving the next
wave of transformationaluse cases

CONTENT
FOREWORD

3

E XECUTIVE SUMMARY

41.

T H E S TAT E O F D I G I TA L H E A LT H I N I N D I A

82.

CHALLENGES IDENTIFIED:H O S P I TA L S & D I A G N O S T I C C E N T E R S

12C O N C L U S I O N : K E Y I M P E R AT I V E S

18ACKNOWLEDGMENTS20

VIK AS KHARBANDAPRATIKSHYA SAHOO

Partner, Healthcare & Life Sciences PracticeDubai

Consultant, Healthcare & Life Sciences Practice
New Delhi

PATRICK LINNENBANKPOOJA MAHAJAN

Partner, Healthcare & Life Sciences Practice
RiyadhBusiness Analyst
New Delhi

BRAJESH SINGH

MAYANK SETHIA

Associate Director, Growth Practice
New Delhi

Business Analyst
New Delhi

General disclaimer
This report was commissioned by NATHEALTH, the Healthcare Federation of India, on terms
specifically limiting the liability of Arthur D. Little. Arthur D. Little conclusions are the results of theexercise of its best professional judgement, based in part upon materials and information provided
to Arthur D. Little by NATHEALTH, secondary research, and expert interviews conducted by Arthur D.
Little. Use of this Report by any third party for whatever purpose should not, and does not, absolve
such third party from using due diligence in verifying the Report’s contents. Any use that a third
party makes of this document, or any reliance on it, or decisions to be made based on it, are theresponsibility of such third party. Neither ADL nor NATHEALTH accepts any duty of care or liability of
any kind whatsoever to any third party, and/or any responsibility for damages, if any, suffered by any
third party as a result of decisions made, or not made, or actions taken, or not taken, based on thisdocument.

2

ARTHUR D. LITTLEFOREWORD
Digital health solutions are shaping the future of healthcare worldwide,
driving numerous innovations and trends, including online pharmacies,
telemonitoring, personalized medicine, and chronic disease management.
The adoption of digital technologies presents opportunities for providers
to expand their businesses, enhance profitability, and improve theaccessibility and affordability of healthcare services.
The government’s ambitious Ayushman Bharat Digital Mission (ABDM)
is leading the charge in India, aiming to digitize the entire healthcare
ecosystem, from patient records to service delivery. Digitalization and
ABDM offer several benefits to providers, including improved monetaryand operational efficiency, access to larger patient populations, acompetitive edge through enhanced patient experiences, future resilience,data-driven decision-making, and better preventive healthcare.
Despite robust demand and a comprehensive rollout plan, healthcare
providers, especially private sector, lag in ABDM adoption. This Report
deep dives into two key verticals of healthcare providers, hospitals anddiagnostics, and seeks to understand the key challenges impeding ABDM
adoption in those segments. The Report also provides imperatives andsolutions for policy makers, healthcare providers, technology platform
providers, and patients. Our findings are based on insights from extensive
interviews and a survey. More than 12 in-depth interviews were conductedwith relevant industry leaders including founders, medical doctors, CEOs,
and CIOs across reputed private hospitals and diagnostics. The survey
collected data related to digital health adoption from private and publichealthcare providers.
The insights emerging from the interviews and survey can be particularly
useful for the entire ecosystem to gain a systemic view of the status ofdigital adoption and its evolution. The four imperatives identified in thisReport will create the impetus for digital health adoption and ABDM
integration for private sector hospitals and diagnostics in India.

Brajesh Singh 		Siddhartha Bhattacharya

Associate Director		

Secretary General

Arthur D. Little		

NATHEALTH

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R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

EXECUTIVE SUMMARY
The healthcare landscape in India is undergoing a rapid transformation,
fueled by technological advancements and evolving patient
expectations. Within this dynamic context, the digitization ofhealthcare has emerged as a pivotal force with the potential tosignificantly revolutionize healthcare delivery and enhance patient
outcomes. The government’s ambitious ABDM is at the forefront of
this transformative effort, aiming to digitize the entire healthcare
ecosystem and encompassing patient records and service delivery.
A key facet of the digital health mission includes creating the
Ayushman Bharat Health Account (ABHA) for individuals andestablishing a unique identity (ABHA ID) across healthcare providers.
This enables seamless access to unified benefits from public healthprograms and insurance schemes. Implementing personal healthrecords (PHR) simplifies medical data sharing, reducing patientinconvenience and ensuring continuity of care across different
specialists and service providers.
In our earlier exploration of digital health adoption, Arthur D.
Little (ADL) revealed additional insights into the current state ofdigitalization, highlighting its crucial stage.1,2 To assess the extent ofdigitization, we introduced the Digital Health Adoption Index, assigningscores from 0 to 10 to providers based on their digital maturity. The
results closely mirrored those obtained in the previous year’s survey.
Notably, small private diagnostic laboratories and unorganized senior
care and home care providers exhibited limited digital adoption.
Conversely, among the participants, large private hospitals showcased
the highest degree of digital adoption.
Digitization and ABDM in digital health offer several advantages to theproviders, such as improvisation in monetary and operational efficiency,
access to larger patient groups, competitive edge through better
patient experience, enhanced robustness for the future, data-driven
decision-making, and better preventive healthcare.
124“Pathways to Scale Adoption of Digital Health in India.” NATHEALTH/Arthur D. Little, March 2023.
“India’s Fast-Evolving Healthcare Industry on the Cusp of a Digital Revolution Driven by the Indian Consumer.”
NATHEALTH/Arthur D. Little, March 2022.

ARTHUR D. LITTLE

Despite robust demand and a comprehensive rollout plan, healthcare
providers, especially in the private sector, lag in adopting digitaltechnologies. Currently, 70% of the Health Facility Registry (HFR)
and 83% of the Health Professional Registry (HPR) are populated
by information from the public sector. Therefore, this Report deep
dives into two key verticals of healthcare providers: hospitals anddiagnostics. Through consultations with industry experts, we haveidentified four key challenges impeding widespread adoption of these
critical, enabling digitalization efforts across these verticals, especiallyin the private sector:
1. Lack of clear guidelines. A significant challenge lies in the lackof clear government guidelines under ABDM. Key issues surrounduncertainties regarding the responsibilities associated with data
storage, retention, and transfer. Moreover, the current engagementwith private players is inadequate, and the guidelines shared are
not in-depth or clear. Additionally, there remains confusion among
private players over the proper steps for ABDM adoption.
2. Investment required. Adopting the ABDM and making thenecessary digital enablement for linking to the NHS requires
significant investments in developing technology infrastructure,especially for private players. The business case and rationale forthis technology investment are not as simple as was anticipated.
3. Data security concerns. There are very clear apprehensions
regarding data security issues. The various stakeholders lack aclear understanding and aligned view of the measures required
to guarantee robust data security protocols.
4. Subdued pull from individuals. Since its launch in 2021, only a
40% penetration of ABHA IDs has been observed in India. Individuals
are not aware of the benefits provided through health tracking
provided by ABDM. Also, currently, there are limited options for
ABHA ID usage for people who have already created ABHA; hence,
there is a lack of push for individuals to use ABHA.
ADL believes the inevitability of digital healthcare underscores theimportance of proactive adaptation over reactive compliance. As India
embraces the digital landscape, the shift toward digital health not only
mandates adjustment but also presents an expansive opportunity forthe private sector. The push for deeper penetration of ABDM will requirea collective effort on the part of the government, private healthcare
providers, technology platform providers, and patients. This Report
proposes four imperatives to drive ABDM penetration in the Indian
healthcare industry:5

R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

1. Ensure effective engagement through two-way participation.
The responsibility for ABDM adoption should not rest solely
on healthcare providers. Collaboration among policy makers,
healthcare providers (including hospitals and diagnostic centers),
and technology platform providers is crucial.

- Policy makers <-> provider segment (hospitals and diagnostic
centers):- Provide tangible incentives to motivate private sector players
to adopt ABDM.

- Require clear and comprehensive guidelines to ensure a

precise understanding of the compliance requirements for
ABDM.

- Highlight the benefits, including easier access to data,

efficient operations, and so on, over the cost of digitization,
especially for smaller players.

- Support small and medium-sized players to ensure easiersystem integration.

- Policy makers <-> technology platform providers:- Require clear guidelines on the architecture to ensure easy
data integration, data interoperability, and storage.

- Optimize the process of the sandbox and faster provisioning oftechnical approvals to expedite the process of ABDM adoption.

- Technology platform providers <-> provider segment(hospitals and diagnostic centers):- Provide technical support, especially to medium and small-

sized healthcare providers, which are at the initial stages ofdigitization.

- Collaborate with providers to ensure a user-friendly andefficient platform that guarantees data interoperability.

2. Address issues regarding data security. The government needs toplay a proactive role in addressing the data security concerns in thefollowing ways:- Increase awareness about lower data security issues in HIS
and NIS, as they are closed systems.

- Establish clear government regulations to specify permissible
data usage.

- Provide guidance on encryption and decryption for easier
implementation.

6

ARTHUR D. LITTLE- Educate individuals on authorization, consent management,
and data flow to address security concerns.

- Create awareness and rigorous enforcement of the Digital
Personal Data Protection (DPDP) Act 2023.

3. Create pull for ABHA adoption by patients. ABDM adoption willtake a significant jump if demand is created from individuals acrossIndia. Hence, government and providers need to play an active rolein creating the pull.

- Conduct awareness programs (e.g., advertisements) tohighlight the benefits of ABDM for individuals:- Electronic health records can be used for easy access to healthinformation, reduction of duplication of tests, and reduction indelays of treatment.

- Health tracking via ABHA ID aids in preventive care,early disease detection, and alleviates the burden of
noncommunicable diseases (NCDs), while also enhancing
maternal health monitoring and reducing infant and maternalmortality rates.

- At the population level, health tracking can be used to avoid
the spread of epidemics and ensure better governance andmanagement of resources like oxygen cylinders.

- Provide incentives to encourage patients to create anduse ABHA ID, such as accelerated CGHS (Central Government
Health Scheme)/PMJAY (Pradhan Mantri Jan Arogya Yojana)reimbursements and simplified hospital registration processes.

4. Create a soft push for ABHA adoption. Government intervention
is needed to create the push from healthcare providers and payers
to increase the adoption of ABHA. Mandatory implementation of
ABHA ID in specific instances, akin to Aadhaar’s mandatory usage
for “know your customer” (KYC) purposes, could be considered.

- Push from providers. This could include mandating use of ABHA

ID for certain healthcare services, such as registration processes.

- Push from payers. ABHA could be required for issuing andrenewal of insurance policies, thereby incentivizing individuals
to obtain and utilize their ABHA ID.

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R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

1 . T H E S TAT E O F D I G I TA L H E A LT H
IN INDIAC U RR EN T D I G I TAL & ABDM
A DO PT I O N LAN D S CAP E

T H E A D O P T I O N R AT E O F
A B D M A M O N G P R I VAT E
H E A LT H C A R E P R O V I D E R S
REMAINS CONSTRAINED

India has witnessed rapid digitalization acrossall sectors, including the healthcare industry.
The government’s ambitious ABDM is at theforefront of this transformative effort, aiming
to digitize the entire healthcare ecosystemand encompassing patient records andservice delivery. Based on our discussion withstakeholders in the provider ecosystem andsecondary research, we uncovered criticalinsights into the present state of digitalization,emphasizing its pivotal role in the healthcare

This statistic suggests resistance among private
healthcare providers regarding the adoptionof ABDM and self-registration. Furthermore,out of the 35 crore reports linked through theregistered HFR as of February 2024, a mere
2% (~7 lakh) are shared by private healthcare

sector.

providers. These figures underscore the limited

While there are compelling arguments forhealthcare ecosystem and show that, despite athe digital transformation and adoption ofcomprehensive rollout plan, the adoption rate

ABDM, private healthcare providers encounteramong private healthcare providers remains

obstacles that impede their transition. An

notably constrained.

participation of private providers in the digital

examination of the registered health facilities
in India, which total 2,32,091 at the time ofthis writing, reveals that only 30% of them

Figure 1. ABDM
adoptioninIndia
are privately
owned (seeFigure1).
3

Figure 1. ABDM adoption in India
ADOPTIONUTILIZATIONPUBLIC SECTOR

40%

penetration of ABHA IDs
with more than 56.2 crore
ABHA created35

crore health records
linked to ABHA70%

of HFR registrations
are from public sector

2.33

2.33 lakh HFR registrations~43,000

tokens generated dailyfor “scan and share”

83%of HPR registrations
are from public sector

2.8

2.8 lakh HPR registrations~65,000

facilities use ABDMenabled software~97%

of records linked to ABHA
are from public sector

GOVERNMENT INITIATIVES TO PROMOTE ABDM INTEGRATION
Multi-platform
ABHA creation

Including on
CoWIN, PMJAY,
BIS

DHIS

Offers monetary
incentives forlinking records

HCX platform

Note: HFR = Health Facility Registry; HPR = Health Professional Registry
Source: Arthur D. Little; National Health Authority, ABDM dashboard, as of 21 February 2024
3

8

“ABDM Dashboard.” India National Health Authority, accessed 21 February 2024.

Note: HFR = Health Facility Registry; HPR = Health Professional Registry
Source: Arthur D. Little; National Health Authority, ABDM dashboard, as of 21 February 2024

Single window
for all insurance
claims processing

ARTHUR D. LITTLE

A B DM : W H AT ’S I N I T FOR
HE A LT H C A RE PROV I D ER S ?

DIGITAL H E ALTHADOP TION INDEX

ABDM’s primary objective is to establish the

To assess the extent of digitization, we

foundational framework required to sustain

introduced the Digital Health Adoption Index,

the integrated digital health infrastructure

assigning scores from 0 to 10 to providers

in India. ABDM endeavors to eliminate thebased on their digital maturity. Providers

current disparities among various stakeholders

with no digital adoption received a score of 0.

in the healthcare ecosystem by establishing

The score increased based on the degree ofdigital highways that will enable safer, faster

digital utilization, ranging from basic billing

connectivity for all.

systems to basic enterprise resource planning(ERP) incorporating health and laboratory

The healthcare ecosystem must embrace digital

information management systems (HIMS/LIMS)

practices to streamline the collection, storage,

and extending to the incorporation of artificial

and retrieval of patient data, thereby enhancing

intelligence (AI) and analytics with ERP, HIMS/

transparency in the system. This transition

LIMS, and electronic medical records (EMRs)

can improve operational efficiency, resulting— see Figure 2.

in cost optimizations. These benefits can inturn be extended to patients through increased

Based on interviews and a survey, we utilized theaffordability.

Digital Health Adoption Index to score different
provider segments. The results closely mirrored

The HFR serves as a comprehensive databasethose obtained in the previous year’s survey.4

connecting health facilities to India’s digital

Notably, small private diagnostic laboratories

health ecosystem. Despite the government’s

and unorganized senior care and home careefforts to promote ABDM adoption, only 30%

providers exhibited limited digital adoption.

of total HFR registrations have come from theConversely, among the participants, large

private sector, despite holding a 70% market

private hospitals displayed the highest degree

share. Public health facilities lead to ABDM

of digital adoption, as shown in Figure 3.

adoption, revealing a significant gap between
the public and private sectors.

Notably, large hospitals and diagnostic
laboratory chains, despite achieving higher

Current ABDM adoption numbers for healthcare

scores on the Digital Health Adoption Index,

providers demonstrate an increasing trend,

expressed significant concerns related to data

but the disparity between public and private

security and the internal sharing of digital

contributions is evident. Addressing thissystems. This underscores the critical need forrequires an understanding of the reasons

a comprehensive strategy that goes beyond

behind low adoption, particularly among privatemere adoption figures. Addressing theseconcerns and barriers is essential to ensure
Figure 2. Digital Health Adoption Index
healthcare providers, including concerns related
to data security and the sharing of internal

the seamless and effective integration ofdigital systems.

digital technologies into the healthcare sector,
allowing for a more robust and secure digital
health ecosystem.

Figure 2. Digital Health Adoption Index

Digital solutions
used only forbilling

Digitalization ofbilling system &rudimentary
HIMS/LIMS

Digitalization ofbilling systems& presence of
rudimentary ERP
with HIMS/LIMS

0

2

4

1

3

5

Adoption of
fully functional
ERP &HIMS/LIMS

6

Usage of ERP,
HIMS/LIMS
& EMR

7

8

No digital
adoption

Usage of AI &analytics with
ERP, HIMS/LIMS
& EMR

9

10

End-to-end
digitalization
Level of digital health adoption among healthcare providers

HIMS = health information management system; LIMS = laboratory information management system; ERP = enterprise resource planning; EMR = electronic medical record
Source: Arthur D. Little

4“Pathways to Scale Adoption of Digital Health in India.” NATHEALTH/Arthur D. Little, March 2023.

9
HIMS = health information management system; LIMS = laboratory information management system; ERP = enterprise resource planning;

R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

Figure 3. Digital maturity in provider ecosystem
Figure 3. Digital maturity in provider ecosystem
Unorganizedsenior care &home careproviders

Small private
diagnostic
laboratories

0

1

2

Small
privatehospitals

3

Organized
senior care &home careproviders4

Publicprimary
healthnetwork5

Large public
hospitals

67

No digital
adoption

Large private
diagnostic
laboratory
chains89Large
privatehospitals

10

End-to-end
digitalization
Level of digital health adoption among healthcare providers
Size of bubble represents population of provider segment

Source: Arthur D. Little

G OVER N M EN T I N I T I ATIVE S
FO R ABD M AD O PT I O N

Source: Arthur D. Little

India’s government has designed andimplemented several initiatives to pushdigitalization through ABDM. These incentives
focus on increasing ABHA ID creation,

D H I S R E G I S T R AT I O N S
H AV E N O T L E D T O A
N O TA B L E I M P R O V E M E N T
I N P R I VAT E H E A LT H C A R E
PROVIDERS’ ADOP TION

incentivizing ABDM utilization, and driving
payer-side adoption. ABHA ID creation has been
made platform-agnostic to enable a multitudeof platforms to create ABHA, reducing technicalfailures and enabling a large population ofgrassroots workers, such as accredited social
health activists (ASHAs), to create ABHA IDs.
Simultaneously, the Digital Health Incentives
Scheme (DHIS) aims to reward users of ABDM
through financial incentives for crossing certain
established thresholds of health record linking
with ABHA. The scheme started recently and is
expected to be scaled to bring more providers
into the benefit pool.

incentives to hospitals and diagnostic centersregistered on the HFR and to digital solution
companies registered on the ABDM Sandbox toimprove ABDM adoption. Benefits include:- Emphasizes ABDM integration as a lucrative
way to kick-start digital adoption by

partially offsetting associated costs.

- Promotes ABDM utilization by incentivizing
linking of health records to ABHA IDs.

Despite the program’s potential, creating

Government initiatives include:awareness poses a significant challenge,- Multi-platform ABHA creation. Multiple

a robust communication strategy to fully

platforms such as CoWIN (Covid Vaccine

Intelligence Network), PMJAY, and Beneficiary
Identification System (BIS) support thecreation of ABHA ID. Benefits include:- Increases ABHA registrations through the
involvement of state and central healthresources.

- Multiple platforms reduce the probabilityof technical failure of ABHA registrations.

- Improves community adoption in rural
areas by engaging ASHA workers.

10- DHIS. This scheme aims to use financial

emphasizing the crucial requirement forrealize its impact (see Figure 4). DHIS
registrations have not led to a notable
improvement in private healthcare providers’adoption, primarily due to the perceived
inadequacy of financial benefits provided
by regulatory authorities to address theoperational and capital expenditures(OPEX/CAPEX) required.

ARTHUR D. LITTLE

Figure 4. DHIS registrations
Figure 4. DHIS registrations
HFR

HOSPITALSDIAGNOSTIC/LABS

2,092

Total facilities
registered for DHIS

1,707

Hospitals registeredfor DHIS

1,227

Government

1,226

Government

865

Private481

Private

385

1

384

Diagnostic/labs
registered for DHIS

Government

PrivateSource: Arthur D. Little; DHIS, as of 21 February 2024

THE GOAL IS TO
I ND.TLittle;
E GDHIS,
R AT
VA R
IOUS
Source: Arthur
as of E
21 February2024
H E A LT H FA C I L I T I E S
UNDER ABDM

- 100 Microsites project. This project aims toaddress ABDM adoption challenges for small

and medium-scale private healthcare facilities
nationwide. Its goal is to integrate various
health facilities under ABDM, expanding its
reach and fostering adoption among private
healthcare providers. The state mission- Health Claims Exchange (HCX) platform.
This platform is envisioned as a common
platform for facilitating all exchangesof claims-related information between
all relevant actors (payers, providers,
beneficiaries, regulators, and observers) andprocessing all health claims. Proposed benefits
include:- Will drive payer-side digitalization, which,in turn, is expected to increase providerside digital health and ABDM adoption.

- Will improve the efficiency and reduce thecosts of claims processing through a single
platform.

directors will spearhead implementation,
supported by the National Health Authority.
States/union territories may engage aninterfacing agency for Microsite setup,
receiving incentives tied to ABDM adoption
milestones. Proposed benefits include:- Targeted outreach efforts within a

Microsite can increase awareness about
ABDM and highlight the benefits of ABDM
for both patients and providers.

- Will help increase ABDM adoption by private
healthcare providers across the country.

However, a development partner, aiding
Microsite implementation, will not receive
financial benefits.

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R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

2. CHALLENGES IDENTIFIED:H O S P I TA L S & D I A G N O S T I C C E N T E R S

In this chapter, we delve deeper into two pivotal

information, family history records, clinicalverticals within the healthcare value chain:data, and lifestyle-based information. Each of

hospitals and diagnostic centers. Throughthese data types introduces unique challenges,

comprehensive analysis and stakeholder

further complicating the seamless adoption of

consultations, we have identified key challenges

ABDM within hospital settings.

impeding ABDM adoption in these two verticals.

2. Lack of awareness about digitization and
ABDM. Small players exhibit a resistance

HO SPI TALS
Private hospitals dominate the healthcare
sector, commanding a substantial 70% market
share. Notably, larger private hospitals haveembraced digitization, reflected in theircommendable Digital Health Adoption Indexscore of approximately 9. However, the adoptionof digital technologies remains notably lacking
in smaller and mid-sized hospitals, as shownin Figure 3. This discrepancy is evident in the
Digital Health Adoption Index, where these
hospitals typically score around 3, highlighting
the need for increased digital integration acrossall healthcare facilities, regardless of size.

to digitalization, even when resources areavailable. This resistance is rooted in a desire
to avoid heightened regulatory scrutiny
resulting from increased transparency brought
about by digitalization. Moreover, there isa noticeable lack of awareness regarding
the correlation between ABDM adoption
and the benefits for smaller hospitals. The
advantages, such as increased accessibility
for a broader patient base, are not adequately
communicated. This awareness gap createsa significant barrier for smaller healthcare
facilities, preventing them from realizing thepotential advantages and opportunities that
ABDM adoption could bring.
3. Technological barriers. Large hospitals

Key challenges facing

private sector hospitals
We have identified five critical challenges thathave hindered the adoption of ABDM amonghospitals, impacting not only small private

their existing internal systems with common
platforms, underscoring the importanceof ensuring data interoperability andstandardization. Despite a growing numberof technology players entering the market,

facilities but also large hospital chains:the industry lacks sufficient software and1. Ambiguities in guidelines from thehealth. This scarcity of available technology

government. The implementation of ABDM

ERP systems tailored specifically for digital
partners further complicates the adoption

in hospitals encounters notable challenges

process. Furthermore, in the rural areas where

stemming from unclear government

approximately 65% of the country’s population

guidelines. Key issues surround uncertainties

resides, there is a notable absence of a robust

regarding the responsibilities associateddigital infrastructure despite government

with data storage, retention, and transfer,initiatives to enhance connectivity. This

presenting significant hurdles. The complexity

hinders the adoption of digital health inintensifies due to the diverse nature ofrural areas.

the data involved, which includes genetic

12

encounter challenges when integrating

ARTHUR D. LITTLE

THERE IS THE NEEDF O R I N C R E A S E D D I G I TA LI N T E G R AT I O N A C R O S S
A L L H E A LT H C A R E
FA C I L I T I E S , R E G A R D L E S S
OF SIZE

1. Concern regarding loss of competitive
advantage. Large laboratories, whichhave already embraced digitization, voice
apprehension regarding the implementationof standardized platforms, unification oftest codes, and the potential diminishmentof brand recognition. The preservation ofdifferentiation is deemed crucial, and the shift
toward a standardized system is perceived as
potentially challenging. Specifically, concerns

4. Low penetration of electronic healthrecords. EMRs are the backbone of ABDM.

revolve around the risk of losing a distinctive
brand identity within the ABDM platform andthe perceived difficulty in standing out on

Currently, most large-scale hospitals maintaina standardized framework, posing notableelectronic health records. However, some ofchallenges for large diagnostic centers.

them have EMRs as scanned PDFs, which might
not be compatible with ABDM systems. Most
medium and small-scale hospitals do maintain
EMRs.
5. Additional CAPEX/OPEX. Smaller hospitals
face a significant challenge because theyneed to invest a lot in digital infrastructure
for ABDM, both in terms of CAPEX and ongoing
OPEX. Creating the necessary technology
setup is a big challenge, especially for smaller
players. It is also unclear how much they will
gain from this investment and what tangible
benefits they can expect.

DI AG N O ST I C CEN T ER S
The diagnostic service sector is comprised
predominantly of unorganized standalonelabs, accounting for 83% of the sector, whileorganized labs make up only 17%. Notably, there
exists a significant disparity in digital adoption
between large and small diagnostic service
providers. Despite their smaller representation,
larger labs exhibit a noticeable trend toward
gradual digitization. Large private diagnostic
players scored an impressive 8 on the Digital
Health Adoption Index, indicating a high levelof digital adoption, whereas smaller labs scoreda 2, reflecting a low level of digitization. During
discussions with senior leaders from leading
diagnostic labs in India, we uncovered several
challenges hindering the adoption of ABDM.

2. Hesitation with data sharing. Unspoken
concerns hover around the sharing of dataon shared platforms. There is a need for clear
guidance on protocols and standards for data
sharing within the industry.
3. Resistance from small and midsized centers.
Smaller and midsized diagnostic centers arein the initial stages of transitioning to digital
operations. They encounter various challenges,
including the considerable cost associated withdigitization, which may exceed their financial
capacity. Additionally, these centers lacksufficient technical expertise and awarenessregarding the advantages of digitalization.

PATIENT-SIDE ISSUE S
In addition to the challenges hospitals anddiagnostic centers face in ABDM adoption,
challenges arise from patients themselves,
including:
1. Limited awareness of the benefits of ABHA.
Patients often perceive digitization througha narrow lens, primarily associating it withthe utilization of applications. However, they
may not fully grasp the broader implications
and advantages offered by the maintenanceof longitudinal digital medical records, as
facilitated by ABDM. These advantages span
beyond simple app usage and encompass aspectrum of benefits, ranging from better
accessibility to healthcare services to

Key challenges facing diagnostic centerspersonalized health-monitoring capabilities.

Large diagnostic players show less resistancelong-term benefits, especially in managing

to ABDM adoption primarily due to existing
digitization, but there are still other concernsthat must be addressed:

Particularly significant is the potential forchronic diseases, where such digital records
can facilitate more effective disease
management strategies and contribute to
overall improved health outcomes.

13

R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

TH E BENE FITS OF
DIGITIZ ATION & ADBMADOP TION FOR P ROVIDERSPAT I E N T S E X P R E S SCONCERNS ABOUTSHARING THEIRCONFIDENTIALH E A LT H I N F O R M AT I O N

The digitization of healthcare is essential for
providers, offering numerous benefits, including(see Figure 5):
1. Access to larger patient groups. Digitization
opens doors to a significantly larger patient

2. Limited opportunities to use ABHA ID.

population. Through digital health records

Patients who possess an ABHA ID are notand online services, healthcare providers

utilizing it adequately, largely due to thecan extend their reach beyond geographicallimited adoption of ABDM by healthcare

constraints. This is particularly crucial in aproviders. This lack of adoption restricts

country as diverse and expansive as India,

the utility of ABHA IDs, thereby diminishingwhere remote and underserved areas canpatient engagement. Without utilizing thebenefit greatly from improved healthcare

ABHA ID multiple times, patients may notaccess, while the providers would benefit

fully comprehend the system’s mechanics,

from access to patients across extended

including data security through consent

regions.

management and the potential benefitsof health data tracking. Therefore, without
proactive efforts from healthcare providers to
implement and encourage the use of ABHA IDs
on a larger scale, patient willingness to utilize
the system will remain low.

2. Competitive edge and enhanced patient
experience. Embracing digital healthtechnologies provides a competitive edge inthe healthcare market. Patients increasingly
seek healthcare providers that offer advanced
and convenient digital services. Digitization

3. Concerns regarding data safety. Patientsenhances the overall patient experience,

express concerns about sharing their

allowing patients to access their healthconfidential health information due torecords online, book appointments digitally,

apprehension regarding potential data

and receive timely reminders for follow-up

breaches and misuse. Their apprehension
stems from a lack of understanding about the
secure methods involved in data collection,
storage, and access, as well as the significanceof consent management. This knowledge
gap leads to reluctance to share health data,care. Telemedicine and remote-monitoring
solutions enable convenient consultations,which is especially beneficial for patientsin rural or remote areas. A positive patient
experience contributes to patient satisfaction

Figure 5. Adopting
a growth mindset in healthcare
and loyalty and helps increase the top line.
thereby impacting ABDM adoption.
Figure 5. Adopting a growth mindset in healthcare

WHY DIGITIZATION IS NECESSARYPROVIDERS

Top line

Bottom line

Customer experience

Process transformation

Holistic digital experience

Access to larger
patient groups

Competitive edge & enhanced
patient experience

01

02

Enhanced robustness
for future

Monetary &operational efficiency

0304

Data-driven
decision-making

Innovation& research

05

06

Preventive healthcare

07
Source: Arthur D. Little

14

Source: Arthur D. Little

ARTHUR D. LITTLE

WITH E VERY INDUSTRYM OV I N G TOWA R D
D I G I T I Z AT I O N ,H E A LT H C A R E W I L L
NO LONGER BE AN
E XCEP TION

4. Monetary and operational efficiency.
Digitization leads to improved operational
efficiency, reducing the burden of paperwork
and manual processes. Electronic healthrecords and other digital tools streamline
administrative tasks, enabling healthcare
providers to focus more on patient care.
The cost savings associated with reduced
paperwork, improved efficiency, and optimized
resource utilization contribute to the financial
sustainability of healthcare organizations.

3. Enhanced robustness for the future.

In our previous Report, we demonstrated the

The healthcare landscape is evolving, withcost-benefit analysis for private healthcare

emerging technologies such as telemedicine,providers and showed that using cloud-based

AI, and data analytics becoming integral tosolutions could add 3%-6% to the provider’shealthcare delivery. Providers that adapt

bottom line with a payback period of less than

to these changes and invest in digital

18-36 months.5 ABDM-integrated solutions

governance will be better positioned to thrive

make digitalization feasible even for players

in the evolving healthcare landscape. With

with a Digital Health Adoption Index score ofevery industry moving toward digitization,

3 or less. ABDM solutions reduce CAPEX by uphealthcare will no longer be an exception.

to 60% as compared to on-premise systems

Sooner or later, regulatory compliance willand decrease OPEX by 20%-40% during therequire each provider to be on the digital

initial years in comparison to non-ABDM (cloud)platform. Providers that join the digitalsolutions (see Figure 6). Large providers using

ecosystem from the start will benefit from

ABDM-compliant systems from the outset

their early response. Additionally, becauseof digitalization can capture more than 80%

the healthcare industry is subject to numerousof the benefits of digitalization with a 60%

regulations and compliance requirements,

reduction in CAPEX as compared to an

digitization enables providers to adhere to

on-premise solution.

these regulations more efficiently. Digital
health records make it easier to maintainand retrieve patient data, ensuring compliancewith privacy and security standards.

Figure 6. Cost-benefit analysis of digitalization and ABDM
adoption
Figure 6. Cost-benefit analysis of digitalization and ABDM adoption
7%

Large private hospitals

6%

Small private
diagnostic
laboratories% increase inbottom line

5%

Organized home care & senior care

4%
Small private
hospitals

3%

Large private diagnostic laboratory chains

2%
Unorganized home care & senior care
1%

0%

1%

2%

3%

4%

5%

CAPEX (as % of revenue)
Digitalization using non-ABDM
on-premises solutions

Digitalization using non-ABDM
cloud-based solutions

Digitalization using ABDM
solutions (cloud-based)

Source: Arthur D. Little
5“Pathways to Scale Adoption of Digital Health in India.” NATHEALTH/Arthur D. Little, March 2023.

Source: Arthur D. Little

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R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

D I G I T I Z AT I O N I S
N O T M E R E LY A
TECHNOLOGICALUPGRADE; IT IS AF U N D A M E N TA L S H I F T
I N H O W H E A LT H C A R E
IS DELIVERED,E XPERIENCED,AND MANAGED

SUGGE STE D ABDM USE
CASES FOR H OSP ITAL &DIAGNOSTIC P ROVIDE RS
ABDM can be used for various use cases
encompassing key areas, including:
1. Integration of ABDM for digital governanceof ultrasound devices. Ultrasound technology

emerges as a transformative force, offeringreal-time, high-resolution diagnostics andtherapeutic applications. However, its adoption
in India faces several hurdles, including
limited awareness, regulatory complexities,

5. Data-driven decision-making. Digital healthsolutions provide valuable data insightsthat empower healthcare providers to makeinformed decisions. From patient outcomesto operational efficiency, data analytics canhighlight areas for improvement and support
evidence-based decision-making. This datadriven approach not only enhances the qualityof healthcare services but also contributes tocontinuous improvement and innovation.
6. Preventive healthcare and population

health management. Digital tools support
preventive healthcare by enabling proactive
interventions based on individual health data.
Population health management becomes more
effective as providers can identify trends, risk
factors, and potential outbreaks, allowing fortargeted public health initiatives. Preventive
care reduces the burden on the healthcare

and inadequate infrastructure. The existing
regulations, while well-intentioned, lackproper implementation, resulting in prolonged
approval processes and apprehension among
healthcare practitioners. A digital governancesystem for ultrasound devices — a solutionaligned with ABDM — has been proposed bya joint collaboration of NATHEALTH and ADL.
This digital transformation aims to streamline
ultrasound compliance, addressing regulatory
inefficiencies and improving transparency.
The proposed system functions on a rulebased model comprising four interconnected
modules: healthcare providers, equipment
suppliers, provider operations, and device
registries. A central registry for all ultrasounddevices in the country is recommended tomonitor their lifecycle status, each linked
to a unique device ID. ABDM is pivotal inmaintaining this registry and integrating

system and improves overall community

data from the modules.

well-being.

Furthermore, at diagnostic provider centers,

Digitization is not merely a technologicalupgrade; it is a fundamental shift in howhealthcare is delivered, experienced, andmanaged. Healthcare providers embracing
digital transformation position themselvesto provide higher-quality, more accessible,
and patient-centric care in an ever-evolving
healthcare landscape.

patients can be directly linked to their ABHA
ID, seamlessly connecting them to the digital
health ecosystem. This streamlines recordkeeping and minimizes clerical errors. As
an example, pregnancy scan results canbe uploaded to an online portal, forminga centralized registry of patient records
accessible in real time to authorities. All
patient data, including medical history,scans, reports, and interventions, willremain protected under data privacy laws,with access restricted to ABDM.

16

ARTHUR D. LITTLE

The envisioned digital governance systemaims to revolutionize healthcare accessibility,
surmount regulatory hurdles, alleviate theburden of NCDs, enhance maternal and childhealthcare, and position India as a frontrunnerin health tech innovation.

TELEMEDICINEP L AT F O R M S W I L L
P L AY A P I V O TA L R O L E
I N A D VA N C I N G T H E
ADOPTION OF ABDM

2. Use of ABDM in organ donation andtransplantation process. Organ donationand transplantation are crucial for saving lives,
especially given the rise in lifestyle-related
health issues today. India recognizes thisimportance, as evidenced by the prime minister
discussing it on “Mann Ki Baat.” With thegovernment’s focus on improving healthcare
quality, affordability, and accessibility throughdigitization, organ donation has become apriority. The establishment of the National
Organ and Tissue Transplant Organizationin 2014 reflects this commitment. Despite
these efforts, India lags behind the global
average in organ donation rates, mainly due
to manual processes, lack of public awareness,and inefficiencies in governance. A digitaltransformation is necessary to streamline
processes, increase transparency, and improveaccess to organ donation. This can optimizeorgan allocation, reduce wastage, and address
unethical practices. Leveraging ABHA ID canhelp check donor pledges and medical fitness,making the organ donation system more
efficient and transparent under ABDM.

3. Telehealth. ABDM heralds a new era inhealthcare accessibility through telemedicine
services. This paradigm shift is not justbeneficial; it is crucial for individuals dwellingin remote or rural areas, where access to
traditional healthcare facilities is severely
limited. Patients with chronic diseases suchas diabetes, hypertension, and arthritis are
increasingly reliant on telemedicine for
ongoing monitoring and management of their

In India, a plethora of telemedicine platforms
seamlessly connect patients with hospitals
and doctors, transcending geographicalbarriers and revolutionizing healthcaredelivery. These platforms empower patientsto schedule appointments with specialists
across diverse medical fields and engage inremote consultations via video calls or chatfunctionalities. Moreover, the integration oftelemedicine platforms with large healthcare
facilities signifies a profound commitment
to expanding reach and bolstering patientcare. Notably, eSanjeevani, the Governmentof India’s national telemedicine platform, hasserved over 10 crore patients with more than
2.3 lakhs healthcare providers enlisted, whichsignifies the robust demand and positive
reception toward telemedicine solutions.
Telemedicine platforms will play a pivotal
role in advancing the adoption of ABDM
by fostering greater interconnectedness
among healthcare provider players.
Telemedicine platforms can integrate with
ABHA to streamline patient identification
and access to health records during
virtual consultations. By leveraging ABHA,
telemedicine platforms can ensure asecure and seamless exchange of patient
information across the healthcare
ecosystem, enhancing care coordinationand continuity.

health. Even beyond the difficult times of the
COVID-19 pandemic, the telehealth market
continues to surge with an impressive CAGR
of 24%. This statistic speaks volumes about theundeniable impact and sustained demand fortelemedicine services across the nation.

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R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I A

C O N C L U S I O N : K E Y I M P E R AT I V E S

Our patient-centric framework underlines four
key imperatives for all stakeholders to accelerate
digital health adoption in the private sector:- Policy makers <-> technology
platform providers:- Require clear guidelines on thearchitecture to ensure easy data

1. Ensure effective engagement ensuring

integration, data interoperability,

two-way participation (see Figure 7). The

and storage. These guidelines can act

responsibility for ABDM adoption should

as a roadmap, providing step-by-step

not rest solely on healthcare providers.

directions for creating a digital system

Collaboration between policy makers andthat can smoothly handle different

healthcare providers (including hospitals

types of information while keeping it

and diagnostic centers) is crucial:safe and organized.

- Policy makers <-> provider segment:- Provide tangible incentives to motivate- Optimize the process of the sandbox
and faster provisioning of technicalprivate sector players to adopt ABDM.

approvals to expedite the process of
ABDM adoption.

- Require clear and comprehensive- Technology platform providers <->guidelines to ensure a precise

understanding of the complianceprovider segment:

requirements for ABDM.

- Highlight the benefits, such as easier- Provide technical support, especiallyto medium and small-sized healthcare

access to data, efficient operations,providers, which are at the initial stages

and such, over the cost of digitization,
especially for smaller players.

- Support small and medium-sized playersof digitization.

- Collaborate with providers to ensure auser-friendly and efficient platform that

Figure 7. Stakeholder
engagementin ABDM adoption
to ensure easiersystem integration.
guarantees data can be easily operated.
Figure 7. Stakeholder engagement in ABDM adoption
Patient-centric framework

KEY IMPERATIVES

01

Ensure effective engagement ensuring
two-way participation

02

Address issues regarding data security

03

Create pull for ABHA adoption by
patients

04

Create a soft push for ABHA adoption

Policy makers

Patient

Provider segment(hospitals/diagnostic
centers)

Source: Arthur D. Little

18

Technology
platform providers

ARTHUR D. LITTLE

C O L L A B O R AT I O N
BET WEEN POLICY
MAKERS AND
H E A LT H C A R E
PROVIDERSIS CRUCIAL

3. Create pull for ABHA adoption by patients.
Government and healthcare providers needto play an active role in creating the pull frompatients:- Conduct awareness programs (e.g.,

advertisements) to highlight the benefitsof ABDM for individuals, including:- Electronic health records can be used
for easy access to health information,
reduction of duplication of tests, and

2. Address issues regarding data security.
The government needs to play an active role inaddressing data security issues. The following
measures can be helpful:- Create awareness that data security
issues happen in open systems. HIS

and NIS are closed systems. Hence, data
security concerns should be lower.

- Provide rules and regulations on how

to use the data. It is crucial to precisely
delineate the types of information
permissible for storage, ensuringtransparency in the process.

- Provide guidance on data encryption

and decryption at all stages for easier
understanding and implementation.

- Provide education on authorizationand data flow. Patients should be awareof consent management, data collection,
storage, and retrieval to address theirhesitation regarding data security.

- Increase awareness and rigorous

enforcement of the DPDP Act, which
can play a pivotal role in addressing
concerns related to data security. By
adhering to the stipulations outlined inthis legislation, healthcare entities canbolster their commitment to safeguarding
patient information, fostering trust andaccountability in the management ofsensitive data.

reduction in delays of treatment.

- Health tracking through ABHA ID

leads to better preventive care, earlytracking of diseases, and reduces theburden of NCDs. Moreover, ABHA canbe useful in monitoring maternal healthand improving infant and maternalmortality rates.

- At the population level, health tracking
can be used to avoid the spread of

epidemics and ensure better governanceand management of resources.

- Provide incentives to increase patient
willingness to create and use ABHA ID.

Examples can be an acceleration of CGHS/
PMJAY reimbursements, easier registration
at hospitals, and so on.
4. Create a soft push for ABHA adoption.
Government intervention is needed to create
the push from healthcare providers and payers
to increase the adoption of ABHA. Mandatory
implementation of ABHA ID in specificinstances, akin to Aadhaar’s mandatory usage
for KYC purposes, could be considered:- Push from providers. This could include

mandating the use of ABHA ID for certain
healthcare services, such as registration
processes.

- Push from payers. ABHA could be requiredfor issuing and renewal of insurance

policies, thereby incentivizing individuals
to obtain and utilize their ABHA ID.

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R E P O R T : C A T A LY Z I N G D I G I T A L H E A L T H I N I N D I AACKNOWLEDGMENTS

We are thankful to the sector leaders and members of MedTech, diagnostics, hospitals, provider
forums, and NATHEALTH Secretariat and survey respondents who actively contributed to thedevelopment of this Report, including:
Ms. Ameera Shah, Metropolis Healthcare
Mr. Alexander Kuruvilla, CSO, Practo
Ms. Anwesha Pandey, Senior Deputy Director, NATHEALTH Secretariat
Mr. Gautam Khanna, CEO, Hinduja Hospital
Mr. Hans-Erhard Reiter, President & CEO, Linkedcare
Mr. Hari Thalapalli, CEO, CallHealthDr. Harsh Mahajan, Mahajan Imaging
Dr. Om Manchanda, MD, Dr Lal PathLabs
Mr. Munender Soperna, CIO, Dr Lal PathLabs
Mr. Ravinder Dang, President, Providers & Diagnostics Business, Asia-Pacific, THB
Ms. Ruma Banerjee, VP, Neotia Healthcare
Dr. Ratna Devi, CEO, DakshamA HealthMr. Siddhartha Bhattacharya, Secretary General, NATHEALTH Secretariat
Mr. Vishnu Bhat, Cofounder & MD, Blueneem Medical Devices Pvt. Ltd.
Ms. Vrinda Chaturvedi, National Lead, NATHEALTH Secretariat
Mr. Yash Mutha, Joint MD, Krsnaa Diagnostics Ltd.

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ARTHUR D. LITTLE

NOTES

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22

ARTHUR D. LITTLE

23

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