Market Research Report : Hospital market in india 2013


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Indian hospital market faces a critical crunch in the number of hospital beds in comparison to the demand it faces. The hospital market in India has strong growth potential that is characterized by continual possibility of growth. Persistent growth in population necessitates the growth in both public as well as private hospital facilities to cater to population of varied economic standards residing in the country.
A gradual trend is being observed in terms of demand for quality healthcare service within the hospital market. This is not only because of changing nature of Indian patient population but also due to the booming medical tourism that India is currently catering to. As a result of these, the sector is attracting good amount of foreign investments or foreign hospital chains establishing business in the country. The Indian government is also undertaking numerous initiatives including tax incentives and budget allocations that would aid in investment inflow and betterment of the market.
Indian entrepreneurs are bringing in innovation within the hospital business by revolutionizing the approach towards healthcare delivery. Initiatives are being taken to penetrate smaller cities and towns where the private sector was hesitant to penetrate even a few years back. Primary and secondary care is being offered through specialty clinics or smaller hospitals specializing in few key areas to reduce their cost of operation yet increase revenue by carrying out more number of the selected few procedures. On the other hand, mobile hospitals and telemedicine is being popularized to reach patient population in rural and urban slum areas for delivering immediate healthcare services.

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Market Research Report : Hospital market in india 2013

  1. 1. Hospital Market in IndiaHospital Market in India July 2013
  2. 2. Executive Summary Market  Overview  The hospital market in India was valued at INR x2 tn in 20‐‐ and is expected to reach INR x5 tn by  20‐‐  The sector is divided primarily into public and private along with NGO operated hospitals  Constantly rising population results in perennial shortage of hospital beds Drivers & Drivers: Shortage in Number of Hospital Beds Increasing Lifestyle Diseases Challenges:  Shortage of Medical Professionals Lack of Investment in IT Infrastructure Drivers &  Challenges Surge in Medical Tourism  Government Initiatives Propelling  Investment Growing Target Hospitalization Population  Group Shortage of FDI Inflow in Indian  Hospitals Group Growing Health Insurance Market  Rising Disposable Income  Specialty Clinics  Glocal Healthcare Systems  Hospital Mobile Applications  Hospital Information Centre  Luxury Offerings  Diversified Business ApproachKey Trends Competitive   Glocal Healthcare Systems  Hospital Information Centre    Diversified Business Approach Key Players Apollo Hospitals Enterprise Ltd.  Fortis Healthcare (India) Ltd.  Care Hospitals Pvt. Ltd.  y 2HOSPITAL MARKET IN INDIA 2013.PPT Landscape Columbia Asia Hospital Pvt.  Ltd.  Manipal Health Enterprises Pvt.  Ltd.  Max Healthcare Institute  Ltd. 
  3. 3. •Economic Indicators •Indian Healthcare Scenario  •Introduction•Introduction •Market Overview •Drivers & Challenges •IT Adoption •Role of Government  •Key Trends•Key Trends •Key Initiatives •Competitive Landscape •Trade Fairs & Events •Recent Transactions •Strategic Insights 3 Strategic Insights •Appendix HOSPITAL MARKET IN INDIA 2013.PPT
  4. 4. SAMPLE Economic Indicators (1/3) INR tn 15 d4 c4d3 3 Gross Domestic Product At Factor Cost (At Constant Prices): Quarterly 14 13 12 11 b4 a4 c3 b3 a3 d2 c2 b2 a2 d1 c1 b1 a1 10 Q4Q3Q2Q1 20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐ Inflation Rate: Monthly N.B.: New Series Base : 2004‐05 y 0 8 1.0 % ECB 0.2 0.4 0.6 0.8 DA 4 0.0 Mar 20‐‐ ‐ Apr 20‐‐Feb 20‐‐ ‐ Mar 20‐‐Jan 20‐‐ ‐ Feb 20‐‐Dec 20‐‐ ‐ Jan 20‐‐Nov 20‐‐ ‐ Dec 20‐‐ HOSPITAL MARKET IN INDIA 2013.PPT
  5. 5. Healthcare system in India requires a larger public outlay  due to huge population base   Healthcare Industry Overview • According to “World Health Statistics 2011 Report, India”,  healthcare comprised of r% of India’s GDP in 20‐‐  Public and private expenditure on health as percentage of GDP Healthcare Sector – Market Size & Growth 8 000 10,000 INR bn A% f e d Public and private expenditure on health as percentage of GDP  was r1% and r2% respectively  • Favorable demographics, increase in awareness levels  and better medical care are some factors that are driving  healthcare sector in India 0 2,000 4,000 6,000 8,000 d c b a healthcare sector in India • Hospital forms the largest segment of overall healthcare  market followed by pharmaceutical, medical devices,  health insurance and diagnostics  G d l t ti f h lth i i t i 0 2017e2016e2015e2014e2013e2012 Healthcare Market Segmentation – 20‐‐ ‐ ‐‐ • Gradual penetration of health insurance is stepping up  affordability of health services through increased demand  for preventive and curative healthcare services • Superior quality healthcare coupled with low treatment  a%d% e% f% c% cost in comparison to other countries is benefiting Indian  medical tourism, thereby steering forth Indian healthcare  market  Treatment for major surgeries in India costs approximately m%  b% c% A EC 5 of that in developed countries B FD HOSPITAL MARKET IN INDIA 2013.PPT
  6. 6. SAMPLE FDI Inflow in Indian Healthcare Segments Several healthcare segments in India have earned good volume of FDI over a 12  years’ span between 20‐‐ to 20‐‐ INR m bnHospital and diagnostic centers INR m1 bnHospital and diagnostic centers INR m2 bnMedical and surgical appliances INR m3 bnDrugs and pharmaceuticals sector 6HOSPITAL MARKET IN INDIA 2013.PPT
  7. 7. Hospitals can be classified on grounds of ownership and  clinical operation Classification of Hospitals Ownership Basis Clinical Basis Public  Hospitals Run by Central Government, State Government and local bodies General  Hospitals Hospitals staffed by at least two medical  officers that provides in‐patient  accommodation and medical care for more  than one category of medical discipline Private Hospitals Run by Central Government, State Government and local bodies Specialized  Hospitals Provides medical attention  for one discipline  and is administratively attached  to a general  hospital Isolation H it l Hospitals for the care of persons suffering from  i f ti di Corporate  Hospitals Public limited companies formed under  Companies Act run commercially and is likely  t t h i f h it l Hospitals infectious diseases Tertiary  Hospitals State and Central government hospitals  established in their state capitals  p to operate  chain of hospitals Voluntary Functions with public or private funds on a Teaching Hospitals A hospital to which a college is attached  for medical/dental education Rural  Located in rural areas permanently staffed by  at least one physician that provides in‐patient  7 Voluntary  Hospitals Functions with public or private funds on a  non‐commercial basis Hospitals accommodation and medical care for more  than one category of medical discipline HOSPITAL MARKET IN INDIA 2013.PPT
  8. 8. Hospitals is the most crucial aspect of Indian healthcare  sector, constantly developing to provide world class service • Hospitals are a major component of the Indian  Healthcare industry forming more than a% of the total  healthcare sector’s revenue Market Overview (1/2) Market Size and Growth – Private Hospitals INR tn 6 x7healthcare sector s revenue • Hospital sector is divided into public and private   There are ~p private hospitals and ~q public hospitals across  the country   • Potential growth prospect of Indian healthcare is  attracting many foreign companies who are willing to 5 4 3 +X% x6 x5 x4 x3 x2attracting many foreign companies who are willing to  invest or establish base in India  There is a growing trend to tap the high potential tier II and  tier III cities  A trend of growth in specialty and multi specialty hospitals  in the country is also observed 2 1 0 20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e20‐‐ x2 20‐‐ x1 in the country is also observed 20 e20 e20 e20 e20 e2020 • Primary Healthcare facilities acts as the backbone of public healthcare system established and  operated primarily by government institutions with low involvement of private • Based on approach of universality, comprehensiveness and equity in health, the country lags  behind in terms of standardization of processes, quality and service Key Healthcare  Delivery Formats • Secondary Care Hospitals that may or may not specialize in treatment of a specific ailment but  offers most essential services • In most cases it caters to 85% to 90% of medical requirements • The segment consists of district and all other privately run general private hospitals • Tertiary Care Hospitals are specialized which offer specific facilities and employ highly  8 specialized practitioners who also offer specialized consultative care • Service is provided by private, regional or central level institutions such as multi specialty and  single specialty hospitals HOSPITAL MARKET IN INDIA 2013.PPT
  9. 9. Drivers & Challenges – Summary Drivers Shortage in Number of Hospital BedsShortage in Number of Hospital Beds Increasing Lifestyle Diseases Challenges Surge in Medical Tourism  Government Initiatives Propelling  Investment G i T H i li i Shortage of Medical Professionals Lack of Investment in IT Infrastructure Growing Target Hospitalization  Population Group Growing Health Insurance Market  Shortage of FDI Inflow in Indian  Hospitals Rising Disposable Income 9HOSPITAL MARKET IN INDIA 2013.PPT
  10. 10. Huge demand‐supply gap for hospital beds is the potent  driving element of the hospital market • India faces an acute shortage in number of hospital beds in comparison to population level of  the country Shortage in Number of Hospital Beds Impact  According to World Health Statistics, India is positioned among the lowest countries on a global  perspective with which is far below the global average of s beds per t population   According to National Health Profile 20‐‐, India has a public sector availability of one bed per f population  in g government hospitals which is only h beds per i population • Public sector as well as private sector needs to pull up the number of hospitals and other p p p p healthcare institutions as population growth will raise demand for more hospital beds   By 20‐‐, population size will be d mn that will necessitate e mn beds to achieve High Level Expert Group  (HLEG) target of i beds per j population Hospital Beds Per 1,000 Population – 2010  UK o USA n Japan m Rural Urban Hospital Bed Ratio Comparison s Rural India Public  Hospital Bed Ratio Rural India is  characterized by public  hospitals while Urban  India by private hospitals Brazil s China r Sri Lanka q Russia p UK o u c Private  Hospital  Bed Ratio India by private hospitals 10HOSPITAL MARKET IN INDIA 2013.PPT India u Thailand t Developed Nations Emerging Nations Urban IndiaSouthern IndiaCentral India
  11. 11. Lack of foreign investments acts as an impediment to the  hospital market of the country ImpactShortage of FDI Inflow in Indian Hospitals • Indian hospitals is lagging behind in acquiring sufficient share of FDI   FDI equity inflow in hospital sector is far low even when compared to drugs and pharmaceutical sector in  India  FDI investment in hospital & diagnostic centers ranks ard in terms of amount of FDI equity inflows in period  between Apr 20‐‐ to Jan 20‐‐ • There are both internal and external issues that decelerate foreign investments in our country Hospital & Diagnostic Centers INR n bn ~ b% Internal Issues High cost involvement in hospital  establishment Depreciation of medical equipments Imbalance in FDI Investment Within Healthcare Sector Drugs & Pharmaceuticals INR m bn ~ a% INR n bn   b% Depreciation of medical equipments  Feasibility issue in upgrading healthcare  equipments External IssuesINR m bn   a% Indian private hospitals unable to establish  hospitals overseas Requirement of in‐depth localized  knowledge of host country 11HOSPITAL MARKET IN INDIA 2013.PPT g y Indian government fails to provide a clarity  in policies on overall healthcare sector
  12. 12. SAMPLE  IT Adoption in Hospital is progressing slow with only high  end corporate hospitals… 35 40 INR bn 18.3% u t IT Spending on Healthcare 10 15 20 25 30 p 18.3% t s r q 0 5 10 20‐‐ 20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e m% •Business streamlining and patient administration  systems is the prime motive for IT adoption in  hospitals  H it l id b tt d t n% •Hospitals can provide better care and manage costs  better internally and patients can look for lower  healthcare costs  •IT leveraging and sharing data on cloud helps in saving  i f t t d t t t t 12 IT Adoption in Hospitals IT Adoption in Other Healthcare Segments infrastructure and manpower to a great extent HOSPITAL MARKET IN INDIA 2013.PPT
  13. 13. SAMPLE Role of Government: Summary   SAMPLE  Budgetary Allocation Role  of  Government  Financial Incentives Public Private  PartnershipsFinancial Incentives  Partnerships  (PPPs) 13HOSPITAL MARKET IN INDIA 2013.PPT
  14. 14. SAMPLEKey Trends SAMPLE  Specialty  Diversified Business Clinics Glocal HealthcareDiversified Business  Approach Glocal Healthcare  Systems Key Trends Luxury  Offerings Hospital Mobile  Applications Trends Hospital  Information Centre   14HOSPITAL MARKET IN INDIA 2013.PPT
  15. 15. SAMPLE Key Initiatives – Summary   Health Cities Key Initiatives Telemedicine Mobile HospitalsTelemedicine Mobile Hospitals 15HOSPITAL MARKET IN INDIA 2013.PPT
  16. 16. ‘Health Cities’ are gradually being popularized to cater  mostly to medical tourists •Health Cities primarily include super specialty hospital attached to a medical college, residential  area with in‐house high end diagnostic centers, commercial zones and other common  infrastructure  H l h Ci i •Health Cities cater to larger populations by offering additional facilities such as hotels, recreational  facilities such as spa, gym and even golf courses •They are also expected to lay a greater emphasis on education and R&D Health Cities Narayana Hrudayalaya • As on May 20‐‐, the group aims to build s bed health  cities that will offer medical care facilities in heart Odisha State Government • As on Jul 20‐‐, the state government is planning to  set up an integrated health city on the outskirts of  Bhubaneshwarcities that will offer medical care facilities in heart,  kidney and cancer • One city each is planned in Jaipur and West Bengal,  while two shall come up on the outskirts of Kolkata • As on Dec 20‐‐, the group is in plans to initiate a Bhubaneshwar • Concept note of the project has been prepared by  Industrial Infrastructure Development Corporation of  Odisha • Project is aimed at making the state a complete  health destination and promote medical tourismAs on Dec 20 , the group is in plans to initiate a  centre in Lucknow, UP with a bed capacity of m‐n  beds health destination and promote medical tourism • The government would promote the project on  public private partnership with one or two mega  healthcare promoters as anchors of the proposed city • QRG Enterprises announced its plan of penetrating healthcare segment with hospital chain in NCR along with Ludhiana, Agra and Jaipur as  16HOSPITAL MARKET IN INDIA 2013.PPT Q G te p ses a ou ced ts p a o pe et at g ea t ca e seg e t t osp ta c a C a o g t ud a a, g a a d Ja pu as on Jun 20‐‐ • The group plans to set up  a p‐bedded super‐specialty facility in Faridabad that is expected to be commissioned in Sep 20‐‐ with an  investment of INR d bn that would be named ‘QRG Health City’
  17. 17. Competitive Benchmarking (2/5) Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (1/3) 40 % Net MarginOperating MarginGross Margin 10 20 30 40 c3 b3 c2 b2 a2 c1 b1 a1 0 CB c2 A • A recorded gross margin of a1%, higher than B which recorded gross margin of a2% • A recorded an operating margin of b1%, higher than both B and C that recorded an operating margin of b2% and b3%  respectively • A recorded a net margin of c1, higher than both B and C that recorded net margin of c2 and c3 respectively 17HOSPITAL MARKET IN INDIA 2013.PPT
  18. 18. Major Public Companies ‐ Summary  500,000,000 Net Profit (INR mn) 100 000 000 200,000,000 300,000,000 400,000,000 Size of bubble represents  Market Capitalization in INR mn ‐200,000,000 ‐100,000,000 0 100,000,000 ba ‐500,000,000 ‐400,000,000 ‐300,000,000 ‐700,000,000 ‐600,000,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 Revenue (INR mn) 18 BA HOSPITAL MARKET IN INDIA 2013.PPT
  19. 19. Private: Domestic Company – Player A (1/5) Company Information Offices and Centres – India  Corporate Address xx Tel No. xx Website xx Year of Incorporation xx Delhi Head OfficeProducts and Services Category Products/Services Key People N D i ti Category Products/Services Sports Goods xx Fitness Equipment xx Name Designation Equipment Supplier xx Others xx 19HOSPITAL MARKET IN INDIA 2013.PPT
  20. 20. Private: Domestic Company – Player A (2/5) Shareholders of the Company as on xx/xx/20‐‐ Ownership Structure Name  No. of Shares held  100 0%100 0%100 0% Directors or relatives of directors 100.0%100.0%100.0% Total 20‐‐20‐‐20‐‐ 20HOSPITAL MARKET IN INDIA 2013.PPT Ownership structure corresponds to Date of AGM:  xx/xx/20‐‐,  xx/xx/20‐‐ and xx/xx/20‐‐
  21. 21. i i l S h K i Private: Domestic Company – Player A (3/5) Financial Snapshot Key Ratios Particulars  y‐o‐y change  (20‐‐ ‐ ‐‐) 20‐‐ 20‐‐ 20‐‐ 20‐‐ Profitability Ratios Operating Margin N.A. N.A. N.A. N.A. N.A. Net Profit/LossTotal Income INR mnINR mn n Net Margin N.A. N.A. N.A. N.A. N.A. Profit Before Tax Margin N.A. N.A. N.A. N.A. N.A. Return on Equity 1.47 5.36% 3.89% 0.00% 0.00% Return on Capital Employed 0.00 0.00% 0.00% 0.00% 0.00% Return on Working Capital 0.00 0.00% 0.00% 0.00% 0.00% Return on Assets 0.00 0.00% 0.00% 0.00% 0.00% m Financial Summary  Return on Fixed Assets 0.00 0.00% 0.00% 0.00% 0.00% Cost Ratios Operating costs (% of Sales) N.A. N.A. N.A. N.A. N.A. Administration costs (% of  Sales) N.A. N.A. N.A. N.A. N.A. Interest costs (% of Sales) N A N A N A N A N A 0 20‐‐20‐‐ • Company earned a net profit of INR m units in FY 20‐‐, as  compared to net profit of INR n units in FY 20‐‐ • It reported total income of  INR p units in FY 20‐‐,  registering an increase of t per cent from FY 20‐‐ Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A. Liquidity Ratios Current Ratio ‐10.83% 1.76 1.97 1.71 2.07 Cash Ratio ‐35.86% 0.16 0.24 0.20 0.32 Leverage Ratios Debt to Equity Ratio 14.21% 1.16 1.02 0.50 0.50 • The company reported a debt to equity ratio of x  percentage points in FY 20‐‐, an increase of y per cent over  FY 20‐‐ Debt to Capital Ratio 6.57% 0.54 0.50 0.33 0.34 Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A. Efficiency Ratios Fixed Asset Turnover N.A. 0.00 0.00 0.00 0.00 Asset Turnover N.A. 0.00 0.00 0.00 0.00 Current Asset Turnover N.A. 0.00 0.00 0.00 0.00 21 Improved Decline Current Asset Turnover N.A. 0.00 0.00 0.00 0.00 Working Capital Turnover N.A. 0.00 0.00 0.00 0.00 Capital Employed Turnover N.A. 0.00 0.00 0.00 0.00 HOSPITAL MARKET IN INDIA 2013.PPT
  22. 22. Private: Domestic Company – Player A (4/5) Business Highlights Description  News Overview • xx Facilities • xx 22HOSPITAL MARKET IN INDIA 2013.PPT
  23. 23. Public: Domestic Company – SWOT Analysis – Player A (5/5) XX • XX • XX O WS TO • XX• XX 23HOSPITAL MARKET IN INDIA 2013.PPT
  24. 24. Thank you for the attention Hospital Market – India report is part of Research on India’s Healthcare Industry Series. For any queries or customized research requirements, contact us at: Ph 91 22 4098 7600 Follow us on: Phone: +91 22 4098 7600 E‐Mail: About Netscribes, Inc. Netscribes, Inc. is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of , g g f g p y p p f investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its  core lies a true value proposition that draws upon a vast knowledge base. Netscribes, Inc. is a one‐stop shop designed to fulfil clients’  profitability and growth objectives. Disclaimer: This report is published for general information only Although high standards have been used in the preparation “Netscribes” is 24 Disclaimer: This report is published for general information only. Although high standards have been used in the preparation,  Netscribes  is  not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior  permission is required for guidelines on reproduction. HOSPITAL MARKET IN INDIA 2013.PPT