A new report from PwC’s Health Research Institute predicts that insurance companies will be spending more to pay for prescription drugs starting next year, from around 3% to almost 6% by 2027. Here’s more forecasts on medical spending from the report:
•Generics: Almost half of the estimated sales from the top 100 brand-name drugs won’t be affected by generic competition for another three years.
•Specialty drugs: Spending on specialty drugs — such as biologics or rare disease treatments — has already been growing over the past five years, but by 2020 these drugs may make up more than half of all U.S. drug spending.
•Chronic disease: 85% of all employer-provided insurance spending is on chronic conditions, and obesity and diabetes will be the two top conditions that will account for spending in 2020.
The 2013 Healthcare Benefits Trends Benchmark Study report provides insights into the adoption of new healthcare benefits, health exchanges, wellness, and related topics. The survey polled more than 300 human resources (HR) executives, benefit specialists, and other benefit decision-makers across the country to explore the current state of employee healthcare benefits, as well as the expected healthcare benefits outlook in response to sweeping healthcare reform legislation, also known as the Affordable Care Act (ACA). This includes the shift to defined contribution health plans, the launch of insurance exchanges, and the implementation of wellness plans.
This survey found that most organizations expect health care costs to increase in 2014 due to the Affordable Care Act. Specifically, 84% of organizations expect costs to rise, with over half anticipating a 1-10% increase. Most organizations plan to pass these increased costs onto employees. The survey also found that more organizations will offer coverage to part-time employees and reduce the minimum work hours to qualify for coverage in 2014. Finally, effective communication strategies will be important to explain 2014 benefit changes to newly eligible employees.
Behavioral Health Industry Insights - 2016Duff & Phelps
Over the last 50 years, the number of inpatient psychiatric facilities in the US, mostly state-run hospitals, has sharply declined due to deinstitutionalization and Medicaid policies like the IMD Exclusion. Deinstitutionalization reduced state-run psychiatric beds by over 90% from 1955 to 2012. The IMD Exclusion further curtailed Medicaid reimbursement for large facilities, shifting treatment to community-based outpatient care. However, this has left many areas without adequate inpatient beds. Recent policy changes now allow Medicaid reimbursement for some short-term inpatient mental health and addiction services for adults aged 21-64 which could help address gaps.
The document summarizes key findings from a SHRM poll on health care reform conducted in December 2010. The main points are:
- Half of organizations decided not to drop health care coverage for employees after reform.
- Many organizations are waiting on further regulatory guidance before making decisions.
- Implementation barriers vary depending on specific reform provisions and when they take effect.
- More HR professionals feel comfortable with their knowledge of reform compared to earlier in 2010.
The healthcare sector in India was valued at US$79 billion in 2012 and is expected to reach US$160 billion by 2017, growing at 15% annually. It accounts for 71% of total healthcare revenues and is one of India's largest employment sectors. Key drivers of growth include a growing middle class with rising incomes, increased lifestyle diseases, greater health awareness and insurance penetration. However, challenges remain around increasing access to insurance, controlling costs, and addressing shortages of qualified medical professionals concentrated in urban areas. The government is taking steps to encourage private sector investment and increase rural healthcare infrastructure to help overcome these challenges and further develop this important and growing sector.
The document discusses key trends for employee benefits in 2015, including the convergence of insurance and technology, blurring lines between healthcare insurers, providers, and advisers, and increasing compliance requirements under the Affordable Care Act. It also summarizes that employers will continue shifting more costs to employees through higher deductibles and contributions, while employees take on more responsibility. Insurers face pressures from healthcare cost increases and changing regulations, though larger carriers may benefit from scale and diversification.
The insights driving superior healthcare
outcomes in Asia Pacific.
Asia-Pacific Insight Magazine brings together IMS Health experts from across the region to engage in conversations about the forces that are shaping healthcare in Asia - and the strategies necessary to surge ahead of the competition
A new report from PwC’s Health Research Institute predicts that insurance companies will be spending more to pay for prescription drugs starting next year, from around 3% to almost 6% by 2027. Here’s more forecasts on medical spending from the report:
•Generics: Almost half of the estimated sales from the top 100 brand-name drugs won’t be affected by generic competition for another three years.
•Specialty drugs: Spending on specialty drugs — such as biologics or rare disease treatments — has already been growing over the past five years, but by 2020 these drugs may make up more than half of all U.S. drug spending.
•Chronic disease: 85% of all employer-provided insurance spending is on chronic conditions, and obesity and diabetes will be the two top conditions that will account for spending in 2020.
The 2013 Healthcare Benefits Trends Benchmark Study report provides insights into the adoption of new healthcare benefits, health exchanges, wellness, and related topics. The survey polled more than 300 human resources (HR) executives, benefit specialists, and other benefit decision-makers across the country to explore the current state of employee healthcare benefits, as well as the expected healthcare benefits outlook in response to sweeping healthcare reform legislation, also known as the Affordable Care Act (ACA). This includes the shift to defined contribution health plans, the launch of insurance exchanges, and the implementation of wellness plans.
This survey found that most organizations expect health care costs to increase in 2014 due to the Affordable Care Act. Specifically, 84% of organizations expect costs to rise, with over half anticipating a 1-10% increase. Most organizations plan to pass these increased costs onto employees. The survey also found that more organizations will offer coverage to part-time employees and reduce the minimum work hours to qualify for coverage in 2014. Finally, effective communication strategies will be important to explain 2014 benefit changes to newly eligible employees.
Behavioral Health Industry Insights - 2016Duff & Phelps
Over the last 50 years, the number of inpatient psychiatric facilities in the US, mostly state-run hospitals, has sharply declined due to deinstitutionalization and Medicaid policies like the IMD Exclusion. Deinstitutionalization reduced state-run psychiatric beds by over 90% from 1955 to 2012. The IMD Exclusion further curtailed Medicaid reimbursement for large facilities, shifting treatment to community-based outpatient care. However, this has left many areas without adequate inpatient beds. Recent policy changes now allow Medicaid reimbursement for some short-term inpatient mental health and addiction services for adults aged 21-64 which could help address gaps.
The document summarizes key findings from a SHRM poll on health care reform conducted in December 2010. The main points are:
- Half of organizations decided not to drop health care coverage for employees after reform.
- Many organizations are waiting on further regulatory guidance before making decisions.
- Implementation barriers vary depending on specific reform provisions and when they take effect.
- More HR professionals feel comfortable with their knowledge of reform compared to earlier in 2010.
The healthcare sector in India was valued at US$79 billion in 2012 and is expected to reach US$160 billion by 2017, growing at 15% annually. It accounts for 71% of total healthcare revenues and is one of India's largest employment sectors. Key drivers of growth include a growing middle class with rising incomes, increased lifestyle diseases, greater health awareness and insurance penetration. However, challenges remain around increasing access to insurance, controlling costs, and addressing shortages of qualified medical professionals concentrated in urban areas. The government is taking steps to encourage private sector investment and increase rural healthcare infrastructure to help overcome these challenges and further develop this important and growing sector.
The document discusses key trends for employee benefits in 2015, including the convergence of insurance and technology, blurring lines between healthcare insurers, providers, and advisers, and increasing compliance requirements under the Affordable Care Act. It also summarizes that employers will continue shifting more costs to employees through higher deductibles and contributions, while employees take on more responsibility. Insurers face pressures from healthcare cost increases and changing regulations, though larger carriers may benefit from scale and diversification.
The insights driving superior healthcare
outcomes in Asia Pacific.
Asia-Pacific Insight Magazine brings together IMS Health experts from across the region to engage in conversations about the forces that are shaping healthcare in Asia - and the strategies necessary to surge ahead of the competition
The healthcare sector in India is poised for strong growth driven by rising incomes, an aging population, growing health awareness, and policy support. Key factors fueling growth include a growing demand for healthcare services as incomes rise and diseases patterns change. The sector is also attracting significant private sector investments through mergers and acquisitions as well as from foreign players setting up R&D centers and hospitals in India. The government is also encouraging growth in the sector through favorable policies for foreign investment and the private sector as well as programs to expand health insurance coverage and healthcare infrastructure across the country. The sector is expected to reach $372 billion by 2022 from $110 billion in 2016, growing at a 22% CAGR.
The healthcare sector in India is poised for strong growth over the coming years. Key points:
- The Indian healthcare market is expected to reach US$ 372 billion by 2022, growing at a CAGR of over 16%. Rising incomes, greater health awareness, and lifestyle diseases are driving demand.
- Infrastructure is also expanding rapidly with the number of doctors increasing to over 841,000 in 2017 and medical colleges reaching 476 in 2018.
- The government has also introduced favorable policies like tax benefits and increased funding to encourage private sector growth and increase healthcare access across the country through programs like Ayushman Bharat.
- Emerging trends include a shift to non-communicable diseases
The document summarizes key information about India's healthcare sector:
- The Indian healthcare sector is growing rapidly, expected to reach USD280 billion by 2020 at a CAGR of 22.87%, fueled by rising incomes, aging population, growing health awareness and changing attitudes towards preventive healthcare.
- Private sector players have a strong presence in India's healthcare sector, accounting for around 74% of total healthcare expenditure. Major private hospital chains include Apollo Hospitals, Aravind Eye Hospitals, and CARE Hospitals.
- Per capita healthcare spending has risen significantly in recent years and is estimated at USD68.6 in 2015, reflecting greater affordability and penetration of health insurance.
The document provides an overview of the Indian healthcare sector. It discusses the following key points in 3 or fewer sentences:
- The Indian healthcare sector is growing rapidly, expected to reach USD280 billion by 2020 at a CAGR of 22.87%. There is significant room for growth given low penetration of healthcare services currently.
- Private sector accounts for around 74% of healthcare spending in India and owns around 74% of hospitals and 40% of hospital beds. Growth is driven by rising incomes, health awareness, and insurance penetration.
- Notable trends include a shift from communicable to lifestyle diseases, expansion of major players to tier-2 and -3 cities, increased use of telemedicine, growth of
Integrated Healthcare for Better Patient Outcomes is an investor presentation by Apollo Medical Holdings, Inc. summarizing the company's integrated population healthcare management model. Apollo provides medical management, care coordination, and physician care for over 100,000 patients. It has experienced nearly 200% year-over-year revenue growth to $33 million in FY2015, primarily through organic expansion. Apollo aims to scale its network of physicians and patients both within California and in new geographies to continue driving improved outcomes and lower costs through an integrated care model.
Indian healthcare sector is expected to grow threefold to reach $372 billion by 2022. Rising incomes, growing health awareness, and increasing access to insurance are driving growth of the sector. The sector employs over 319,000 people and is expected to generate 40 million jobs by 2020. Telemedicine is emerging as a key trend, with major hospitals adopting telemedicine services to bridge rural-urban healthcare divides. The sector is also expanding to tier 2 and 3 cities. Lifestyle diseases have replaced traditional health problems as the major cause of healthcare spending in India.
- The Indian healthcare sector is expected to grow at a CAGR of 22.87% until 2020 to reach $280 billion. Rising incomes, increasing health awareness, and changing attitudes towards preventive healthcare are driving demand.
- Private sector participation is significant, accounting for around 74% of total healthcare expenditure. Large private sector investments are contributing to the development of hospitals.
- Per capita healthcare expenditure has risen at a CAGR of 5% between 2008-2015 driven by economic growth, insurance penetration, and improved access and quality of facilities. However, India still lags global standards on healthcare access and spending.
Analysis of state-level trends in employer-sponsored health insurance from 2011 to 2015 using the Medical Expenditure Panel Survey - Insurance Component (MEPS-IC)
STUDY OF HEALCARE FACILITIES AND ACCESS TO HEALTHCARE IN BADSHAHIBAGH AND NEA...Md Kashif Alam
The document discusses a study on healthcare facilities and access to healthcare in Badshahibagh and nearby villages in India. It provides an overview of the growing Indian healthcare industry, including key statistics on market size, government initiatives, and investments in the sector. The study aims to understand the opportunities and challenges for investors looking to establish healthcare facilities in rural areas and will analyze collected survey data to make recommendations.
Health Services Tax Conference May 18-19, 2015, Presentations included: Mega Trends and the Impact on Healthcare, The Healthcare Industry: A View from Washington and The New Health Economy.
The document provides an overview of the healthcare sector in India. Some key points:
- The Indian healthcare sector is expected to grow at a CAGR of 22% until 2022 to reach $372 billion.
- Rising incomes, growing health awareness, lifestyle diseases, and insurance coverage are driving growth in the sector.
- The government aims to increase public health spending to 2.5% of GDP by 2025 and launch programs like Ayushman Bharat to expand coverage.
- Private investment and emerging areas like telemedicine, home healthcare, and medical technology offer opportunities in the growing Indian healthcare industry.
Medical Costs 2021- Analyst Insights from PwC Health Research InsittuteLevi Shapiro
Presentation for mHealth Israel covering medical cost trends in the midst of the COVID-19 pandemic. Presenters are Ben Isgur, Health Research Institute Leader, and Ingrid Stiver, Senior Manager, Health Research Institute. Medical cost trends could range from 4% to 10% in 2021. Employer healthcare spending could fall in calendar year 2020 compared with 2019, and then rebound in 2021. Individuals with complex chronic conditions on employer-sponsored insurance were more likely to have delayed care. As a trusted source, providers have an opportunity to better communicate with their patients during the pandemic. During the Great Recession, unemployment increased by 8 million and employer-sponsored health insurance dropped by over 11 million. Breakdown of Inflators and Deflators affecting 2021 medical cost trends. COVID-19 boosts mental health utilization. Individuals with complex chronic disease and mental illness cost employers 12x more than healthy ones. Most medications in the pipeline are specialty drugs. Expanding indications for approved specialty drugs increase spending. Telehealth goes mainstream. Most commercial insurers are temporarily waiving cost sharing on telehealth visits during the COVID-19 pandemic. Networks narrow out of necessity. 35% of individuals with employer-sponsored insurance would choose a narrow network to avoid a premium increase. Includes LOW, MEDIUM and HIGH cost growth trend scenarios.
The document discusses challenges facing healthcare systems and the need for transformation. It outlines four potential scenarios for 2015 based on how systems address drivers of change and inhibitors. The "lose-lose" scenario involves growing access/quality issues, blunt cost cuts, and loss of public support for universal healthcare. To achieve a "win-win" scenario, systems must focus on value, develop better consumers, and create better care options.
The healthcare sector in India is poised for strong growth driven by rising incomes, greater health awareness, lifestyle diseases, and increasing access to insurance. The sector is expected to reach US$ 372 billion by 2022 from US$ 110 billion in 2016. Private sector investment and M&A activity has increased as the government encourages private sector participation and foreign investment through supportive policies. Growing demand, policy support, focus on technology and R&D, and consolidation in the industry through mergers and acquisitions will be the key growth drivers for the Indian healthcare sector.
Personal care physicians series b preferred investment presentationPersonalCare
The concierge medicine industry in the US is estimated at $5 billion and growing 34% annually. PersonalCare helps doctors, health systems, and companies provide optimal healthcare solutions to high-income customers. With over 1,800 paying members across 3 locations, PersonalCare generates over $8 million in annual recurring revenue and is trending towards positive EBITDA in Q4 2015. The company is seeking $1 million in funding to expand into new markets through physician partnerships and management agreements.
South East Asia Pharmaceutical Markets Jamie Davies October 2014jamiedavies12345
The document discusses trends in the pharmaceutical market in Southeast Asia. It forecasts strong growth in the region but identifies risks like protectionism, intellectual property issues, and pricing and reimbursement challenges. The economy is expected to outperform globally and universal healthcare is becoming more politically important. Companies need region-specific strategies given the diversity across Southeast Asian markets that are undergoing economic and regulatory integration.
The Latest Healthcare Financial Trends: What You Need to KnowHealth Catalyst
As 2017 comes to an end, two of our most experienced and capable people are assessing this year’s most prominent healthcare financial trends and using those clues to better read the tea leaves to predict which trends will impact 2018. Tasked with delivering ground breaking financial software products, Dorian DiNardo, Senior Vice President, Analytics, daily has her finger to the wind to sense how shifting trends are impacting market needs. She will join Bobbi Brown, Senior Vice President, Professional Services, who will lead the webinar conversation. Bobbi has several impressive decades of experience in financial leadership for some of the most storied organizations including Intermountain, Sutter Health and Kaiser Permanente. Among other trends that popup in the next few weeks, she will examine three of 2017’s most significant healthcare trends:
Transitions in payment models
Healthcare market disruptions from well-known companies as well as some not-so-familiar newcomers
Emerging importance of technical data skillsets
The document provides an overview of the healthcare sector in India. Some key points:
1) The Indian healthcare sector is one of the fastest growing industries and is expected to reach US$ 372 billion by 2022, growing at a CAGR of 22% from 2016-2022.
2) Rising incomes, greater health awareness, lifestyle diseases, and increasing insurance coverage are driving growth in healthcare spending and demand for services.
3) Private sector participation is strong, accounting for around 74% of total healthcare expenditure in India. The government is also taking steps to boost investment and develop India as a global healthcare hub.
Nobilis Health Corp. presented at the 2017 Cantor Fitzgerald Global Healthcare Conference. The presentation discussed Nobilis' unique patient acquisition model and growth strategy. Some key points:
1) Nobilis utilizes multiple marketing channels and a proprietary technology platform to directly target and acquire patients, driving organic volume growth. This is unlike traditional referral models.
2) Nobilis' growth strategy focuses on continued marketing expertise to generate organic growth, pursuing acquisition opportunities in the fragmented market, and optimizing its case mix to maximize higher-paying procedures.
3) Nobilis operates 4 surgical hospitals, 10 ASCs, and 13 clinics across 5 states, with plans to expand nationwide. The company generated $321 million in revenue
Mercer Capital's Value Focus: Medtech & Device Industry | Q3 2019 | Article: ...Mercer Capital
This document provides an overview and market analysis of the medical device industry. It discusses key trends influencing demand, including an aging global population driving higher healthcare spending. Regulatory and reimbursement landscapes play a large role in device adoption and pricing. The transition to value-based care may lead to lower procedure volumes and reimbursement rates. Medical device companies face competitive pressures to continuously innovate and obtain necessary regulatory clearances for new products.
The document provides a technical analysis of various commodities including gold, silver, copper, crude oil, and natural gas. For gold, the analysis indicates prices are expected to move lower towards 28500 levels. For silver, prices are expected to move higher towards 39250 levels. For copper, prices are expected to move higher towards 322.50 levels. For crude oil, prices are expected to move higher towards 3430 levels.
The Reserve Bank of India kept key policy rates unchanged at 7.75% in line with market expectations. While inflation has eased, the RBI is awaiting more information on the fiscal outlook and evidence that disinflation is sustainable. The RBI reduced the statutory liquidity ratio for banks to improve liquidity and provide more credit availability. India's GDP grew by 6.9% in FY14 according to revised estimates, and is projected to grow 7.4% in FY15. Industrial production growth slowed to 1.7% in December 2014, indicating weaker demand despite recent GDP growth figures.
The healthcare sector in India is poised for strong growth driven by rising incomes, an aging population, growing health awareness, and policy support. Key factors fueling growth include a growing demand for healthcare services as incomes rise and diseases patterns change. The sector is also attracting significant private sector investments through mergers and acquisitions as well as from foreign players setting up R&D centers and hospitals in India. The government is also encouraging growth in the sector through favorable policies for foreign investment and the private sector as well as programs to expand health insurance coverage and healthcare infrastructure across the country. The sector is expected to reach $372 billion by 2022 from $110 billion in 2016, growing at a 22% CAGR.
The healthcare sector in India is poised for strong growth over the coming years. Key points:
- The Indian healthcare market is expected to reach US$ 372 billion by 2022, growing at a CAGR of over 16%. Rising incomes, greater health awareness, and lifestyle diseases are driving demand.
- Infrastructure is also expanding rapidly with the number of doctors increasing to over 841,000 in 2017 and medical colleges reaching 476 in 2018.
- The government has also introduced favorable policies like tax benefits and increased funding to encourage private sector growth and increase healthcare access across the country through programs like Ayushman Bharat.
- Emerging trends include a shift to non-communicable diseases
The document summarizes key information about India's healthcare sector:
- The Indian healthcare sector is growing rapidly, expected to reach USD280 billion by 2020 at a CAGR of 22.87%, fueled by rising incomes, aging population, growing health awareness and changing attitudes towards preventive healthcare.
- Private sector players have a strong presence in India's healthcare sector, accounting for around 74% of total healthcare expenditure. Major private hospital chains include Apollo Hospitals, Aravind Eye Hospitals, and CARE Hospitals.
- Per capita healthcare spending has risen significantly in recent years and is estimated at USD68.6 in 2015, reflecting greater affordability and penetration of health insurance.
The document provides an overview of the Indian healthcare sector. It discusses the following key points in 3 or fewer sentences:
- The Indian healthcare sector is growing rapidly, expected to reach USD280 billion by 2020 at a CAGR of 22.87%. There is significant room for growth given low penetration of healthcare services currently.
- Private sector accounts for around 74% of healthcare spending in India and owns around 74% of hospitals and 40% of hospital beds. Growth is driven by rising incomes, health awareness, and insurance penetration.
- Notable trends include a shift from communicable to lifestyle diseases, expansion of major players to tier-2 and -3 cities, increased use of telemedicine, growth of
Integrated Healthcare for Better Patient Outcomes is an investor presentation by Apollo Medical Holdings, Inc. summarizing the company's integrated population healthcare management model. Apollo provides medical management, care coordination, and physician care for over 100,000 patients. It has experienced nearly 200% year-over-year revenue growth to $33 million in FY2015, primarily through organic expansion. Apollo aims to scale its network of physicians and patients both within California and in new geographies to continue driving improved outcomes and lower costs through an integrated care model.
Indian healthcare sector is expected to grow threefold to reach $372 billion by 2022. Rising incomes, growing health awareness, and increasing access to insurance are driving growth of the sector. The sector employs over 319,000 people and is expected to generate 40 million jobs by 2020. Telemedicine is emerging as a key trend, with major hospitals adopting telemedicine services to bridge rural-urban healthcare divides. The sector is also expanding to tier 2 and 3 cities. Lifestyle diseases have replaced traditional health problems as the major cause of healthcare spending in India.
- The Indian healthcare sector is expected to grow at a CAGR of 22.87% until 2020 to reach $280 billion. Rising incomes, increasing health awareness, and changing attitudes towards preventive healthcare are driving demand.
- Private sector participation is significant, accounting for around 74% of total healthcare expenditure. Large private sector investments are contributing to the development of hospitals.
- Per capita healthcare expenditure has risen at a CAGR of 5% between 2008-2015 driven by economic growth, insurance penetration, and improved access and quality of facilities. However, India still lags global standards on healthcare access and spending.
Analysis of state-level trends in employer-sponsored health insurance from 2011 to 2015 using the Medical Expenditure Panel Survey - Insurance Component (MEPS-IC)
STUDY OF HEALCARE FACILITIES AND ACCESS TO HEALTHCARE IN BADSHAHIBAGH AND NEA...Md Kashif Alam
The document discusses a study on healthcare facilities and access to healthcare in Badshahibagh and nearby villages in India. It provides an overview of the growing Indian healthcare industry, including key statistics on market size, government initiatives, and investments in the sector. The study aims to understand the opportunities and challenges for investors looking to establish healthcare facilities in rural areas and will analyze collected survey data to make recommendations.
Health Services Tax Conference May 18-19, 2015, Presentations included: Mega Trends and the Impact on Healthcare, The Healthcare Industry: A View from Washington and The New Health Economy.
The document provides an overview of the healthcare sector in India. Some key points:
- The Indian healthcare sector is expected to grow at a CAGR of 22% until 2022 to reach $372 billion.
- Rising incomes, growing health awareness, lifestyle diseases, and insurance coverage are driving growth in the sector.
- The government aims to increase public health spending to 2.5% of GDP by 2025 and launch programs like Ayushman Bharat to expand coverage.
- Private investment and emerging areas like telemedicine, home healthcare, and medical technology offer opportunities in the growing Indian healthcare industry.
Medical Costs 2021- Analyst Insights from PwC Health Research InsittuteLevi Shapiro
Presentation for mHealth Israel covering medical cost trends in the midst of the COVID-19 pandemic. Presenters are Ben Isgur, Health Research Institute Leader, and Ingrid Stiver, Senior Manager, Health Research Institute. Medical cost trends could range from 4% to 10% in 2021. Employer healthcare spending could fall in calendar year 2020 compared with 2019, and then rebound in 2021. Individuals with complex chronic conditions on employer-sponsored insurance were more likely to have delayed care. As a trusted source, providers have an opportunity to better communicate with their patients during the pandemic. During the Great Recession, unemployment increased by 8 million and employer-sponsored health insurance dropped by over 11 million. Breakdown of Inflators and Deflators affecting 2021 medical cost trends. COVID-19 boosts mental health utilization. Individuals with complex chronic disease and mental illness cost employers 12x more than healthy ones. Most medications in the pipeline are specialty drugs. Expanding indications for approved specialty drugs increase spending. Telehealth goes mainstream. Most commercial insurers are temporarily waiving cost sharing on telehealth visits during the COVID-19 pandemic. Networks narrow out of necessity. 35% of individuals with employer-sponsored insurance would choose a narrow network to avoid a premium increase. Includes LOW, MEDIUM and HIGH cost growth trend scenarios.
The document discusses challenges facing healthcare systems and the need for transformation. It outlines four potential scenarios for 2015 based on how systems address drivers of change and inhibitors. The "lose-lose" scenario involves growing access/quality issues, blunt cost cuts, and loss of public support for universal healthcare. To achieve a "win-win" scenario, systems must focus on value, develop better consumers, and create better care options.
The healthcare sector in India is poised for strong growth driven by rising incomes, greater health awareness, lifestyle diseases, and increasing access to insurance. The sector is expected to reach US$ 372 billion by 2022 from US$ 110 billion in 2016. Private sector investment and M&A activity has increased as the government encourages private sector participation and foreign investment through supportive policies. Growing demand, policy support, focus on technology and R&D, and consolidation in the industry through mergers and acquisitions will be the key growth drivers for the Indian healthcare sector.
Personal care physicians series b preferred investment presentationPersonalCare
The concierge medicine industry in the US is estimated at $5 billion and growing 34% annually. PersonalCare helps doctors, health systems, and companies provide optimal healthcare solutions to high-income customers. With over 1,800 paying members across 3 locations, PersonalCare generates over $8 million in annual recurring revenue and is trending towards positive EBITDA in Q4 2015. The company is seeking $1 million in funding to expand into new markets through physician partnerships and management agreements.
South East Asia Pharmaceutical Markets Jamie Davies October 2014jamiedavies12345
The document discusses trends in the pharmaceutical market in Southeast Asia. It forecasts strong growth in the region but identifies risks like protectionism, intellectual property issues, and pricing and reimbursement challenges. The economy is expected to outperform globally and universal healthcare is becoming more politically important. Companies need region-specific strategies given the diversity across Southeast Asian markets that are undergoing economic and regulatory integration.
The Latest Healthcare Financial Trends: What You Need to KnowHealth Catalyst
As 2017 comes to an end, two of our most experienced and capable people are assessing this year’s most prominent healthcare financial trends and using those clues to better read the tea leaves to predict which trends will impact 2018. Tasked with delivering ground breaking financial software products, Dorian DiNardo, Senior Vice President, Analytics, daily has her finger to the wind to sense how shifting trends are impacting market needs. She will join Bobbi Brown, Senior Vice President, Professional Services, who will lead the webinar conversation. Bobbi has several impressive decades of experience in financial leadership for some of the most storied organizations including Intermountain, Sutter Health and Kaiser Permanente. Among other trends that popup in the next few weeks, she will examine three of 2017’s most significant healthcare trends:
Transitions in payment models
Healthcare market disruptions from well-known companies as well as some not-so-familiar newcomers
Emerging importance of technical data skillsets
The document provides an overview of the healthcare sector in India. Some key points:
1) The Indian healthcare sector is one of the fastest growing industries and is expected to reach US$ 372 billion by 2022, growing at a CAGR of 22% from 2016-2022.
2) Rising incomes, greater health awareness, lifestyle diseases, and increasing insurance coverage are driving growth in healthcare spending and demand for services.
3) Private sector participation is strong, accounting for around 74% of total healthcare expenditure in India. The government is also taking steps to boost investment and develop India as a global healthcare hub.
Nobilis Health Corp. presented at the 2017 Cantor Fitzgerald Global Healthcare Conference. The presentation discussed Nobilis' unique patient acquisition model and growth strategy. Some key points:
1) Nobilis utilizes multiple marketing channels and a proprietary technology platform to directly target and acquire patients, driving organic volume growth. This is unlike traditional referral models.
2) Nobilis' growth strategy focuses on continued marketing expertise to generate organic growth, pursuing acquisition opportunities in the fragmented market, and optimizing its case mix to maximize higher-paying procedures.
3) Nobilis operates 4 surgical hospitals, 10 ASCs, and 13 clinics across 5 states, with plans to expand nationwide. The company generated $321 million in revenue
Mercer Capital's Value Focus: Medtech & Device Industry | Q3 2019 | Article: ...Mercer Capital
This document provides an overview and market analysis of the medical device industry. It discusses key trends influencing demand, including an aging global population driving higher healthcare spending. Regulatory and reimbursement landscapes play a large role in device adoption and pricing. The transition to value-based care may lead to lower procedure volumes and reimbursement rates. Medical device companies face competitive pressures to continuously innovate and obtain necessary regulatory clearances for new products.
The document provides a technical analysis of various commodities including gold, silver, copper, crude oil, and natural gas. For gold, the analysis indicates prices are expected to move lower towards 28500 levels. For silver, prices are expected to move higher towards 39250 levels. For copper, prices are expected to move higher towards 322.50 levels. For crude oil, prices are expected to move higher towards 3430 levels.
The Reserve Bank of India kept key policy rates unchanged at 7.75% in line with market expectations. While inflation has eased, the RBI is awaiting more information on the fiscal outlook and evidence that disinflation is sustainable. The RBI reduced the statutory liquidity ratio for banks to improve liquidity and provide more credit availability. India's GDP grew by 6.9% in FY14 according to revised estimates, and is projected to grow 7.4% in FY15. Industrial production growth slowed to 1.7% in December 2014, indicating weaker demand despite recent GDP growth figures.
The document provides stock recommendations and analysis for three Indian companies - Dr. Reddy's Laboratories Ltd., Ambuja Cements Ltd., and ICICI Bank Ltd. It summarizes recent price movements and trading patterns, and identifies support levels based on technical indicators. Positive factors like breakouts, moving average crossovers, and diverging momentum signals suggest further upside potential. The analyst recommends buying the stocks with provided target prices and stop losses.
- Canara Bank reported a 15.6% decline in net profit for the second quarter due to higher provisions and weak asset quality. Net profit fell to Rs. 5.28 billion from Rs. 6.26 billion a year ago.
- Net interest income rose but provisions jumped 49% while other income dropped 18.5%. Gross bad loans rose to 4.27% from 3.98% in the previous quarter.
- Petronet LNG shares rose after RBI allowed increased foreign ownership in the company to 30% under a portfolio investment scheme.
The Indian rupee dropped for the second day in a row against the US dollar, ending at 67.26. Sentiment in the domestic market was negative, keeping pressure on the currency. China's manufacturing PMI was unchanged at 50.1 in May. The US dollar index gained 0.4% due to increased risk aversion boosting demand for the low-yielding currency, though economic data from the US was mixed. Eurozone CPI fell 0.1% in May while unemployment remained at 10.2%.
Aurobindo Pharma received approval from the US FDA to manufacture and market Tramadol Hydrochloride Extended-release Tablets, which are used to treat moderate-to-severe pain. The approved product has an estimated $56 million market size. Aurobindo now has a total of 217 ANDA approvals from the US FDA. Technically, the stock has broken out of a pennant pattern and is trading above moving averages, suggesting an upward trend. Analyst recommends buying the stock in the range of 824-828 with a target price of 845. RBI has allowed FIIs/RFPIs to invest up to 74% of Shriram Transport Finance's capital. Analyst
Choicebroking Currency Report: Indian Rupee rose marginally by 2 paise in Tuesday’s trading session. US IBD/ TIPP Economic Optimism rose by 2.4 points to 48.7-mark in May.
This document summarizes the commodity call trades made in January 2016. It lists the date of each trade, commodity traded, transaction details like quantity, price targets, stop losses, and profit/loss. A total profit of Rs. 104050 was achieved over the month from trades in various commodities like lead, aluminum, zinc, nickel, crude oil, natural gas, copper, gold and silver. The highest profits came from trades in lead, silver, gold and natural gas. Some trades resulted in losses or were stopped out due to targets/stop losses being hit.
Sun Pharmaceutical Industries is seeking shareholder approval to raise up to Rs 12,000 crore through convertible debentures or a QIP placement to fund expansion and acquisitions. Following its merger with Ranbaxy, the company has been restructuring its business. KEC International has secured new orders worth Rs 668 crore for transmission, distribution, cables and renewable projects in India and other countries. Asian stocks traded mostly higher following gains on Wall Street, with Chinese markets leading after reopening from a weeklong holiday.
This document provides an analysis on Mahindra & Mahindra (M&M) from a research analyst. It recommends buying M&M shares. Key points include:
- The Indian economy and automobile industry are improving after slowdowns, which will benefit M&M.
- M&M plans new vehicle launches and expects to regain some lost market share in utility vehicles.
- Tractor demand is expected to revive in the coming fiscal years due to various factors.
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Healthcare global enterprises ltd. ipo update
1. IPO Update
IPO UPDATE
Long Term Play
Salient features of the IPO:
• Healthcare Global Enterprises Ltd. (HCG) operating under the “HCG”
brand, is one of the leading private specialty healthcare service
providers in India focusing on cancer and fertility.
• As of 31st Dec. 2015, HCG’s hospital network consisted of 14
comprehensive cancer centers, including our center of excellence in
Bengaluru, three freestanding diagnostic centers and one day care
chemotherapy center across India.
• Majority of the net proceeds from the issue will be utilized to pre-
pay the debt. Rest will be used for the purchase of medical
equipment and upgradation of the hospital information system.
Key competitive strengths:
• Largest provider of cancer care in India with a proven track record
• High quality cancer care provided at a competitive price
• Entry into high potential fertility business
• Leveraging the business model and partnership arrangements
• Strong management team with successful track record
Risk and concerns:
• Longer stability period of centers to affect the profitability
• Higher contribution of business from third party payer agreements
• Higher future capex to nullify the benefits arising from debt
prepayment
Valuation & recommendation:
Based on TTM earnings, at the lower price band of Rs. 205 per share,
HCG’s shares are available at a P/E multiple of 12.8x, while at higher
price band, it is available at a P/E multiple of 13.6x, which are at
significant discount to its peers average of 78.2x.
• Out of the net proceeds, around 67% (i.e. Rs. 1,470.5mn) will be
used to retire high cost debts. Consequently, the debt equity ratio
will decline from current 1.2x to 0.4x post pre-payment of the debt,
which will be in line with its peers.
• As HCG is in expansion phase, it has planned a massive capex over
the next few years in the tune of Rs. 2,600mn. Assuming a
sustainable operating cash flow generation of around Rs. 500-
600mn, we feel that the company will be able to comfortably meet
its future capex requirement with minimal additional funds.
• In H1 FY16, on a stable EBITDA margin, the company has reported a
net loss of Rs. 7.5mn on a consolidated basis. Extrapolating this for a
full year FY16, net loss is expected to be at around Rs. 15mn as
against a net profit of Rs. 5.5mn in FY15. However, after the debt
repayment, HCG is likely to report a profitability (before minority
interest) of around Rs. 100mn in FY17E.
Hence, given the strong fundamentals of the company in the highly
lucrative healthcare industry, we feel that the premium EV/EBITDA
valuation is justified. Considering a long term view, we recommend a
“SUBSCRIBE” rating for the public issue.
1
Mar. 15, 2016
Recommendation SUBSCRIBE
Price Band Rs. 205 - Rs. 218
No of OFS Shares (mn) 18.2
Fresh Issue Shares (mn) 11.6
OFS Issue Size Rs. 3,731 – 3,967.6mn
Fresh Issue Size Rs. 2,378 – 2,528.8mn
Total Issue Size Rs. 6,109 – 6,496.4mn
Bidding Date 16th Mar. – 18th Mar. 2016
Book Running Lead
Manager
Kotak Mahindra Capital Co.
Ltd., Edelweiss Financial
Services Ltd., Goldman
Sachs (India) Securities Pvt
Ltd., IDFC Securities Ltd.,
IIFL Holdings Ltd. and Yes
Bank Ltd.
Registrar
Karvy Computershare Pvt.
Ltd.
Sector/Industry Miscellaneous
Promoters
Dr. BS Ajai Kumar, Dr.
Ganesh Nayak, Dr. BS
Ramesh, Dr. KS Gopinath
and Dr. M Gopichand
Pre - Issue Shareholding Pattern
Promoters and Promoter Group 28.7%
Public 71.3%
Total 100%
Retail Application Money at Higher Cut-Off Price
per Lot
Number of Shares per Lot 65
Application Money Rs. 14,170
Analyst
Rajnath Yadav
Research Analyst (022 - 6707 9999; Ext: 912)
Email: rajnath.yadav@choiceindia.com
Healthcare Global Enterprises Ltd.
* Represents per share calculation based on number of shares o/s post issue; Source: Choice Broking Research, Company DRHP
Particulars (Rs. mn) FY11 FY12 FY13 FY14 FY15 H1 FY15 H1 FY16 8M Ended Nov. 2015
Revenue from Operations 2,148.2 2,665.8 3,383.1 4,513.3 5,193.8 2,554.5 2,854.3 3,788.9
EBITDA 378.7 412.3 462.3 382.4 762.4 372.8 418.5 557.4
Reported PAT 63.0 (33.3) (105.1) (355.5) 5.5 (11.2) (7.5) (37.1)
EBIDTA Margin 17.6% 15.5% 13.7% 8.5% 14.7% 14.6% 14.7% 14.7%
Reported PAT Margin 2.9% -1.2% -3.1% -7.9% 0.1% -0.4% -0.3% -1.0%
RoE (%) 3.6% -1.5% -3.6% -12.6% 0.2% -0.4% -0.2% -1.2%
RoCE (%) 6.8% 4.1% 2.8% 0.4% 5.9% 3.1% 2.9% 3.8%
2. IPO Update
IPO UPDATE 2
About the Issue:
• HCG is coming up with an initial public offering (IPO) with total around 29.8mn shares (including 18.2mn OFS shares and
11.6mn fresh issue shares) in offering. Total IPO size is estimated at around Rs. 6,109 – 6,496.4mn.
• The issue will open on 16th Mar. 2016 and close on 18th Mar. 2016.
• Not more than 75% of the issue will be allocated to qualified institutional buyers. Further, at most 15% of the issue will be
available for non-institutional bidders and the remaining 10% for retail investors.
• Majority of the net proceeds from the issue will be utilized to pre-pay the debt (Rs. 1,470.5mn). Rest will be used for the
purchase of medical equipment (Rs. 422.1mn) and upgradation of the hospital information system (Rs. 301.9mn).
• Pre issue promoter group stake in HCG stands at 28.7%, while public stake is 71.3%. Post IPO, promoter group stake will
decline to 24.6%.
Source: Choice Broking Research, Company DRHP
Pre and Post Issue Shareholding Pattern (%)
Pre Issue Post Issue
Promoter & Promoter Group (%) 28.7% 24.6%
Public 71.3% 75.4%
Healthcare Global Enterprises Ltd.
Mar. 15, 2016
3. IPO Update
IPO UPDATE 3
Healthcare delivery industry overview:
India is the world's tenth largest economy in terms of nominal gross domestic product (GDP) which stands at USD 1.9tn and
accounts for approximately 20% of the world’s population with 1.2 billion inhabitants (Source: CRISIL). The population is
expected to reach 1.4bn by 2026, of which over 50% would be aged 30 years or older, compared to 40% currently. According
to World Health Organization (WHO), in 2012 around 9.8mn deaths occurred in India, of which 60% were on account of non-
communicable diseases and rest were caused due to cardiovascular diseases. While progress has been made in the past
decade in improving the quality of healthcare services in India, the overall standard of healthcare infrastructure falls below
global benchmarks.
As per the Global Health Expenditure database compiled by the WHO, in 2013 India’s total expenditure on healthcare stands
at 4% of its GDP. India not only trails behind developed countries in terms of healthcare spending as portion of GDP, but also
developing countries such as Brazil, Russia, China and Thailand. This is primarily due to under-penetration of healthcare
services and lower consumer spending on healthcare. The government’s expenditure on healthcare also ranks lower than
other developing countries in terms of general government expenditure on health as a percentage of total expenditure.
Source: Choice Broking Research, Company DRHP
Healthcare Global Enterprises Ltd.
Total healthcare expenditure as a % of GDP in 2013 Government spending on healthcare as a % of
total healthcare spending in 2013
17.1%
9.7% 9.1%
6.5% 6.0% 5.6%
4.6% 4.0% 4.0%
3.1%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18% 83.5%
80.1%
55.8%
54.8%
48.2%
48.1%
47.1%
41.9%
39.0%
32.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Source: Choice Broking Research, Company DRHP
The Indian healthcare industry comprises of five segments: (i) hospitals, (ii) pharmaceuticals, (iii) medical insurance, (iv)
medical equipment and supplies, and (v) diagnostics. As per 2012 estimates, the hospital segment represented around 70%
of the total healthcare revenue in India. (Source: Company RHP).
Healthcare delivery in India has two components: public and private. The public, i.e., the government healthcare system,
focuses on addressing primary healthcare needs across India and particularly so in the rural areas. The government also
manages secondary and tertiary care hospitals across India. The private sector comprises primarily secondary and tertiary
care hospitals predominantly located in metropolitan, tier I and tier II cities. The private sector accounts for almost 72% of
India's total healthcare expenditure. (Source: Company RHP).
Mar. 15, 2016
4. IPO Update
IPO UPDATE 4
Healthcare delivery industry overview (Contd…):
The Indian healthcare industry is expected to grow at a CAGR of 17% between 2008 to 2020; and is expected to stand at USD
280bn by 2020. (Source: Company RHP).
Growth in the Indian healthcare industry will be primarily driven by:
• Socio-economic changes such as growing health awareness, increasing per-capita income, increasing penetration of
health insurance, increasing instances of lifestyle diseases and an aging population.
• Technological advancements such as continuing development of mobile technology which will enhance the delivery of
healthcare through telemedicine.
• Affordability of healthcare in India, which will attract more patients. For example, treatment for major surgeries in India
costs approximately 20% less than the cost in a developed country; and
• Government policies in India that support growth in the healthcare industry such as tax reliefs on hospitals in tier II and
tier III cities, which will attract healthcare investment in these areas
Cancer Prevalence and Incidence in India:
The prevalence of cancer in India is estimated to be at 3.9mn people in 2015, with 1.1mn new reported cancer cases during
the year. As per the company RHP, the real incidence of cancer in India could be significantly higher than the reported figure.
Data from large randomized screening trials undertaken in India suggest that the real incidence of cancer could be 1.5 to 2
times higher than the reported incidence, or an estimated 1.6 to 2.2mn new cancer cases during 2015. (Source: Company
RHP).
Key factors driving the increase in cancer incidences:
The prevalence of cancer in India is expected to increase from an estimated 3.9mn in 2015 to an estimated 7.1mn people by
2020. The reported cancer incidences in India are expected to increase from an estimated 1.1mn in 2015 to 2.1mn by 2020.
(Source: Company RHP). The increase in cancer incidences is primarily driven by the following factors:
• Demographic changes (such as ageing population).
• Exposure to risk factors such as consumption of tobacco & alcohol, increasing use of processed food and meat, reduced
fiber content in the diet and rising incidence of obesity. Additionally, increasing levels of air pollution in urban India are
also anticipated to result in an increased risk of cancer.
• Narrowing diagnosis gap: Growing cancer awareness, a greater public emphasis on screening and improvements in
diagnosis of cancer, are expected to result in earlier and increased diagnosis of cancer.
Healthcare Global Enterprises Ltd.
Mar. 15, 2016
5. IPO Update
IPO UPDATE 5
Healthcare delivery industry overview (Contd…):
Cost of Cancer Treatment in India:
As of 2015, the annual expenditure in India for the diagnosis and treatment of cancer is estimated to be between USD 1.7-
2.bn. Even at for-profit hospitals in India, the cost of cancer care, including treatment with advanced technologies represents
only a fraction of the cost of treatment in the US even after adjusting for purchasing power parity. (Source: Company RHP).
The table below sets out the cost of cancer treatment in India and the US by service offerings, during 2014 and 2012,
respectively:
Healthcare Global Enterprises Ltd.
Source: Choice Broking Research, Company DRHP
Cost Comparison of Cancer Treatment in India and the US (mn Rs.)
Even though the cost of cancer treatment in India is significantly lower than in the US, high quality cancer care is still
unaffordable and inaccessible to a large proportion of the Indian population due to low population coverage of public and
private insurance programs and low average household income levels. (Source: Company RHP).
Infertility Incidences in India:
An estimated 220mn women in India are of reproductive age (between 20 and 44 years of age) and about 27.5mn couples in
this group are estimated to be suffering from infertility. The number of infertile couples in India is expected to increase from
27.5mn in 2015 to between 29-32mn by 2020. (Source: Company RHP).
The total fertility rate (defined as the average number of children that would be born to a woman if she experiences the
current fertility pattern throughout her reproductive span (15 to 49 years)) in India has witnessed a rapid decline over the
last few decades. The total fertility rate in India has decreased from 3.9 in 1990 to 2.3 in 2013.
Below are the key factors responsible for the increase in infertility incidences in India:
• Demographic changes: The number of women of reproductive age in India is forecast to increase by 14% between 2010
and 2020.
• Lifestyle changes: Changes in lifestyle such as increasing marital age, increasing number of working women, rising alcohol
and tobacco consumption are among the factors responsible for growing infertility incidences in India.
• Clinical factors such as hormone imbalance in women, genital tuberculosis, obesity etc.
Type of Treatment India US US (purchasing power parity adjusted)
Chemotherapy 0.15 - 0.24 1.3 - 1.8 0.51 - 0.72
Surgery 0.06 - 0.1 1.5 - 1.8 0.6 - 0.72
Radiation Therapy 0.06 - 0.1 1.1 - 1.4 0.43 - 0.54
Mar. 15, 2016
6. IPO Update
IPO UPDATE 6
Company Introduction (Contd…):
HealthCare Global Enterprises Ltd. (HCG) operating under the “HCG” brand, is one of the leading private specialty
healthcare service providers in India focusing on cancer and fertility. As on 31st May 2015, the company had the largest
cancer care network in India (in terms of the total number of private cancer treatment centers licensed by the Atomic
Energy Regulatory Board).
As of 31st Dec. 2015, HCG’s hospital network consisted of 14 comprehensive cancer centers, including its center of
excellence in Bengaluru, three freestanding diagnostic centers and one day care chemotherapy center across India. Each of
its comprehensive cancer centers offers at a single location provides a cancer diagnosis and treatment services (including
radiation, medical oncology and surgical treatments). Freestanding diagnostic centers and day care chemotherapy center
offers diagnosis and medical oncology services, respectively.
In 2013, HCG acquired a 50.1% equity interest in BACC Healthcare, which operated the fertility centers under the “Milann”
brand in India. Pursuant to this acquisition, the company now operates four Milann fertility centers in Bengaluru.
Healthcare Global Enterprises Ltd.
Revenue Breakup in FY15 Business breakup of medical services segment in FY15
Source: Choice Broking Research, Company DRHPSource: Choice Broking Research, Company DRHP
65.4%
33.9%
0.7%
Income from Medical Services Income from Pharmacy
Other Operating Income
91%
9%
Oncology Business Fertility Business
Financial Performance over FY11-15 Operating Performance over FY11-15
Source: Choice Broking Research, Company DRHPSource: Choice Broking Research, Company DRHP
Primarily on the back of a 26.7% CAGR increase in the income from the medical services during FY11-15, HCG reported a
24.7% CAGR growth in top-line to Rs. 5,193.8mn in FY15. During the same period, total operating expenditure increased at a
relatively higher pace of 25.8% CAGR as compared the top-line growth, thereby leading to a 19.1% CAGR rise in EBITDA to
Rs. 762.4mn in FY15. EBITDA margins stood in the range of 8-18% during FY11-15. Depreciation and finance charge increased
by 22.6% and 25.9%, respectively, during the period and were mainly responsible for the volatility in the earning profile of
the HCG.
(500)
500
1,500
2,500
3,500
4,500
5,500
FY11 FY12 FY13 FY14 FY15 H1
FY15
H1
FY16
8M
Ended
Nov.
2015Revenue from Operations (Rs. mn)
EBITDA (Rs. mn)
Reported PAT (Rs. mn)
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
FY11 FY12 FY13 FY14 FY15 H1
FY15
H1
FY16
8M
Ended
Nov.
2015
EBITDA Margin (%) PAT Margin (%)
RoE (%) RoCE (%)
Mar. 15, 2016
7. IPO Update
IPO UPDATE 7
Company Strengths:
• Largest provider of cancer care in India with a proven track record: As of 31st May 2015, HCG was the largest provider of
cancer care in India in terms of the total number of private cancer treatment centers licensed by the AERB. Beginning its
expansion in 2006, the company has since added 11 comprehensive cancer centers, three freestanding diagnostic centers
and one day care chemotherapy center, spread across 13 cities and towns in eight states in India. With this extensive
network of HCG cancer centers, the company is able to extend the provision of cancer care beyond the metropolitan
cities to patients across India. At the same time, HCG has built a strong reputation within the medical community in India,
mainly due to the advanced technologies used, successful clinical outcomes and the extensive clinical experience of its
specialist physicians. The company believes that its market leading position, successful track record and strong reputation
in India provides it with a significant advantage over its competitors. Given below are the key operating data of the HCG’s
cancer centers:
Healthcare Global Enterprises Ltd.
Key Operating Data of the HCG’s Cancer Centers
Particulars FY13 FY14 FY15 H1 FY16
Comprehensive Cancer Centres in Operation 14 15 15 14
New Patient Registrations 28,546 34,344 37,458 18,079
Patients Treated with Radiation Therapy 10,225 11,181 12,647 6,163
PET-CT Procedures 17,750 21,040 23,988 12,253
Chemotherapy Administrations 40,052 43,988 48,360 25,453
Surgeries 7,333 8,454 8,707 4,630
Number of Available Operational Beds 746 829 875 912
Average Occupancy Rate per Operational Bed 57.6% 54.2% 53.5% 51.6%
Average Length of Stay per Admitted Patient 3.4 3.2 3.0 2.9
Average Revenue per Occupied Bed per Day 19,034 21,850 24,647 26,685
Source: Choice Broking Research, Company DRHP
• High quality cancer care provided at a competitive price: HCG adopts an integrated multidisciplinary and technology
focused approach to provide comprehensive cancer care to its patients through its network. The company has a close
collaboration and sharing of information among specialist physicians, with medical technology vendors, pharmaceutical
and biotechnology companies, which enables it to offer a high standard of care to its patients and introduce and adopt
the latest advances in technology relatively early in India. HCG seeks to maximize the utilization of the equipment and
technologies used across its network through optimal scheduling of patients undergoing treatment, in particular,
radiation therapy. The company has also implemented a centralized drug and medical consumables formulary, allowing it
to maximize the utilization of generic drugs, thereby lowering the overall cost of drugs and medical consumables.
Additionally, with its scale of operations and the relationship it enjoys with equipment vendors give it a competitive
advantage in terms of favorable economic terms of purchase and financing of medical equipment.
• Entry into high potential fertility business: Fertility treatment is an emerging segment of the Indian healthcare industry,
which is currently relatively underdeveloped and fragmented. There are an estimated 27.5mn couples suffering from
infertility in India, which could increase to between 29-32mn by 2020 due to demographic, lifestyle and the presence of
various clinical risk factors among the Indian population. Of the estimated 27.5mn infertile couples in India, less than
0.3mn are currently seeking fertility treatment. This is mainly due to the lack of awareness of and access to fertility
treatment, as well as a high cost of treatment. Nonetheless, the number of IVF cycles performed in India has increased
from 7,000 in 2001 to 100,000 in 2015 and is anticipated to increase to 260,000 by 2020. With the acquisition of the
majority equity interest in the BACC Healthcare, the company currently operates four Milann fertility centers in
Bengaluru.
Mar. 15, 2016
8. IPO Update
IPO UPDATE 8
Company Strengths (Contd…):
• Leveraging the business model and partnership arrangements: HCG network operates on a “hub and spoke” model,
wherein its HCG center of excellence in Bengaluru serves as a “hub” to its other cancer centers. Through its center of
excellence, the company provides its other centers access to centralized quality control & assurance services, establishes
treatment protocols, centralized treatment planning & tele-radiology services, access to advanced technologies and
conducts weekly central board meetings to review complex cases. HCG believes that this model allows it to effectively
leverage the expertise and capabilities of its center of excellence to deliver quality cancer care in a seamless manner.
• Strong management team with successful track record: The company’s senior management team has an extensive
experience in the management of healthcare businesses. HCG believes that the experience, depth & diversity of its
management team, complemented by the clinical expertise and relationship base of its physician promoters, is a distinct
competitive advantage in the complex and rapidly evolving healthcare industry in which it operates.
Business Strategies:
• Expansion of the cancer care network in India: HCG plans to expand its HCG network in India by establishing new cancer
centers across India and by expanding the capacity and service offering of the existing HCG cancer centers. As of 31st
Dec. 2015, the company is in the process of establishing 12 new comprehensive cancer centers in India and which will be
operational between FY16 to FY18. HCG is also expanding its existing HCG comprehensive cancer centers at Cuttack and
Ahmedabad and is further planning to expand these centers by adding either new cancer care services or new equipment
to cater to increasing demand. In the future too, the company is planning to continue with its expansion drive through
green field projects, partnership arrangements and acquisitions.
• Further strengthening of HCG brand: Along with the cancer care network expansion, HCG plans to invest in building and
enhancing its brand image and visibility. The company intends to strengthen its patient support groups comprising of
cancer survivors to further spread awareness of cancer screening and to educate patients regarding cancer treatment
options and their relative outcomes and benefits. HCG also intends to continue to grow its base of referring physicians
through ongoing community outreach programs and continuing medical education programs targeting such physicians.
• Cancer care network expansion in Africa: In the past, the company has experienced an increase in the number of
patients travelling from Africa and other regions to its center of excellence in Bengaluru, as well as to other
comprehensive cancer centers in India for cancer treatment. During H1 FY16, FY15, FY14 and FY13, HCG derived 17.8%,
15.6%, 12.6% and 7.9%, respectively, of its total revenue at its center of excellence from such international patients. Thus
this growing demand presents it with an opportunity to establish a network of specialty cancer centers in Africa.
Currently, HCG is planning to establish a network of specialty cancer centers in Africa through partnership arrangements
and acquisitions. The company has entered into a definitive agreement with CDC, pursuant to which CDC will invest in
HCG’s subsidiary, HCG Africa, to establish a network of comprehensive cancer centers in Africa. In the first phase of the
development, the company plans to establish comprehensive cancer centers in Kenya, Tanzania and Uganda.
• Upgradation and strengthening of information technology infrastructure: HCG is in the process of significantly
upgrading its information technology infrastructure in order to enhance the quality of care delivered to patients and to
further enhance its clinical best practices and research capabilities. The company has planned an information technology
infrastructure based on a private cloud-computing system and will encompass a centralized EMR system seamlessly
integrated with various other centralized systems including HIS and ERP system. Adoption of a cloud-based centralized
information technology infrastructure will enable it to transition from the current paper-based and de-centralized
medical records system to a centrally managed and administered electronic medical records system. Adoption of these
systems will allow the company to efficiently manage its operations, including optimal utilization of equipment and
human resources, billing and receivables management, inventory management, central purchasing, formulary
management and financial controls.
Healthcare Global Enterprises Ltd.
Mar. 15, 2016
9. IPO Update
IPO UPDATE 9
Business Strategies (Contd…):
• Expansion of Milann fertility centers across India: The IVF market in India is under-penetrated relative to its potential
demand. The potential demand for IVF cycles could be nine to 12 times higher than the current actual number of patients
availing treatment in Delhi, Mumbai and Bengaluru. The number of infertile couples coming forward for fertility
treatment in India is estimated to increase from the current 270,000 to around 650,000 to 700,000 by 2020. (Source:
Company RHP). In order to address the growing demand for fertility treatment in India, HCG is planning to expand its
Milann network by setting up green field centers and also by entering into partnership arrangements and undertaking
selective acquisitions. As of 31st Dec. 2015, the company is in the process of establishing three fertility centers in India.
Risk and concerns:
• Longer stability period of centers to affect the profitability: Historically, the company’s business growth has been
primarily driven by the establishment of new centers and HCG expects this to continue to be the future key drivers for
growth. The company is in the process of adding 12 new comprehensive cancer centers to its network and is also
expanding two of its existing HCG comprehensive cancer centers to add more services and equipment. Normally during
the initial ramp up period, operational expenses exceed the revenue, resulting to an operational loss. HCG has longer
stability period of 2-3 years for each centers. Currently of the 14 operational centers, only five centers are operating at an
EBITDA margin of around 25%. Thus a longer stability period will be negative for the company as it will take time to
realize the potential of the economics of scale.
• Higher contribution of business from third party payer agreements: HCG’s patients include patients who pay for their
medical expenses themselves and patients who are beneficiaries of third party payer agreements. In the case of patients
who are beneficiaries of third party payer agreements, all or part of the medical bill is payable by the third party payer as
per the terms of the relevant payer agreement. To be eligible for reimbursement by a third party payer, the company’s
centers and hospitals need to be empanelled by the payer, and pursuant to such empanelment, HCG enter into an
agreement with the payer. Each third party payer agreement typically specifies the services covered, as well as any
exclusion, the approved tariffs for each of the services covered and the terms of payment. Consequently, HCG’s revenue
and profitability depend on the applicable third-party tariffs, the extent of third-party coverage or limits, the payment
terms or the reimbursement policies related to these third-party arrangements. Any favorable change in the third-party
tariffs and other elements of arrangement is likely to increase the revenue and profitability of the company and vice a
versa. Historically, HCG generated around 32-35% of the total revenue from third party agreements. Any non-payment by
such third party payers will impact the company’s revenue and profitability. In the past, there have been delays and
nonpayment by third party payers. As of 30 Nov. 2015, HCG had an outstanding gross receivables amounting to Rs.
900.1mn from third party payers, which also included provisions for disallowances and doubtful trade receivables.
Provisions for disallowances reduce the revenue from operations and provisions for doubtful trade receivables increase
its expenses and thus reduce its profitability.
• Higher future capex to nullify the benefits arising from debt prepayment: Out of the net proceeds, around 67% (i.e. Rs.
1,470.5mn) will be used to retire debt. As of 31st Dec. 2015, HCG has a debt of Rs. 3.697.5mn under various loan
agreements. With the retirement of debt, the company is aiming to reduce average cost of debt to 8-9% from the current
10%. As HCG has planned a massive capex over the next two years, we feel it will need additional funds for its capex, thus
we are not anticipating any significant savings in the finance cost on the retirement of the debt.
Healthcare Global Enterprises Ltd.
Mar. 15, 2016
10. IPO Update
IPO UPDATE 10
Peer comparison and our recommendation:
Source: Choice Broking Research, Company DRHP
Source: Choice Broking Research, Company DRHP
At the lower band of Rs. 205 per share, HCG’s share are available at a P/E multiple of 12.8x, which is at a significant discount
to the average P/E multiple of 78.2x of peers such as Apollo Hospitals Enterprise Ltd., Fortis Healthcare Ltd., Indraprastha
Medical Corporation Ltd., Fortis Malar Hospitals Ltd., Narayana Hrudayalaya Ltd. and Kovai Medical Center and Hospital Ltd..
At a higher price band of Rs. 218, the company’s share is available at P/E multiple of 13.6x. However, on P/BVPS and
EV/EBITDA front, HCG is priced at a premium as compared to its peers average of 78.2x.
At the higher price of the band, HCG is expecting a valuation of Rs. 20.6mn per bed as against the capital cost of Rs. 6.7mn
per bed. Moreover, the valuation per bed demanded by the company is also higher as compared to a valuation range of Rs.
10-16mn set by its competitors in recent acquisitions.
Out of the net proceeds, around 67% (i.e. Rs. 1,470.5mn) will be used to retire high cost debts. As of 31st Dec. 2015, HCG
has a debt of Rs. 3.697.5mn under various loan agreements. With the retirement of debt, the company is aiming to reduce
average cost of debt to 8-9% from the current 10%. Consequently, the debt equity ratio will decline from current 1.2x to 0.4x
post pre-payment of the debt, which will be in line with its peers. As HCG is in expansion phase, it has planned a massive
capex over the next few years in the tune of Rs. 2,600mn. Assuming a sustainable operating cash flow generation of around
Rs. 500-600mn, we feel that the company will be able to comfortably meet its future capex requirement with minimal
additional funds.
During FY11-15, HCG’s EBITDA margin declined from 17.6% in FY11 to 14.7% in FY15. Additionally, it reported a net loss for
majority of the period, primarily due to higher financial charge. In H1 FY16, on a stable EBITDA margin, the company has
reported a net loss of Rs. 7.5mn on a consolidated basis. Extrapolating this for a full year FY16, net loss is expected to be at
around Rs. 15mn as against a net profit of Rs. 5.5mn in FY15. However, after the debt repayment, HCG is likely to report a
profitability (before minority interest) of around Rs. 100mn in FY17E.
Hence, given the strong fundamentals of the company in the highly lucrative healthcare industry, we feel that the premium
EV/EBITDA valuation is justified. Considering a long term view, we recommend a “SUBSCRIBE” rating for the public issue.
Healthcare Global Enterprises Ltd.
Company Name
EPS
(Rs.)
BVPS
(Rs.)
DPS
(Rs.)
Debt Equity
Ratio
RoE (%)
RoCE
(%)
P / E
(x)
P / B
(x)
EV / Sales
(x)
EV / EBITDA
(x)
MCAP / Sales
(x)
Healthcare Global Enterprises Ltd. 16.0 37.8 0.0 1.2 0.3% 5.6% 13.6 5.8 4.0 27.2 3.4
Apollo Hospitals Enterprise Ltd. 26.7 240.5 5.8 0.6 11.1% 11.3% 52.6 5.8 4.0 28.8 3.7
Fortis Healthcare Ltd. 1.0 106.8 0.0 0.2 1.0% -0.2% 161.8 1.6 1.9 38.1 1.9
Indraprastha Medical Corporation Ltd. 3.3 23.2 1.8 0.2 14.2% 23.6% 15.3 2.2 0.7 5.9 0.6
Fortis Malar Hospitals Ltd. 3.9 50.6 0.5 0.0 7.7% 4.6% 14.0 1.1 0.6 10.8 0.8
Narayana Hrudayalaya Ltd. 1.4 38.7 0.0 0.3 3.7% 6.5% 207.0 7.6 4.8 47.0 4.6
Kovai Medical Center and Hospital Ltd. 35.4 144.3 1.5 0.7 24.6% 25.0% 18.6 4.6 1.7 8.7 1.6
Average 12.0 100.7 1.6 0.3 10.4% 11.8% 78.2 3.8 2.3 23.2 2.2
Company Name
Face Value
(Rs.)
CMP (Rs.)
MCAP (Rs.
mn)
TTM Total Operating
Revenue (Rs. mn)
TTM EBITDA
Margin (%)
TTM PAT
Margin (%)
Healthcare Global Enterprises Ltd. 10 218 18,547 5,494 14.7% 0.2%
Apollo Hospitals Enterprise Ltd. 5 1,403 195,220 52,165 14.0% 7.1%
Fortis Healthcare Ltd. 10 169 78,445 42,003 5.0% 1.2%
Indraprastha Medical Corporation Ltd. 10 51 4,639 7,236 11.2% 4.2%
Fortis Malar Hospitals Ltd. 10 54 1,007 1,269 5.9% 5.7%
Narayana Hrudayalaya Ltd. 10 293 59,878 13,076 10.1% 2.2%
Kovai Medical Center and Hospital Ltd. 10 660 7,222 4,501 19.9% 8.6%
Average 11.0% 4.8%
Mar. 15, 2016
13. IPO Update
IPO UPDATE
es
13
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POTENTIAL CONFLICT OF INTEREST DISCLOSURE (as on date of report) Disclosure of interest statement – • Analyst interest of the stock /Instrument(s): - No. •
Firm interest of the stock / Instrument (s): - No.
Choice’s Rating Rationale
The price target for a large cap stock represents the value the analyst expects the stock to reach over next 12 months. For a
stock to be classified as Outperform, the expected return must exceed the local risk free return by at least 5% over the next
12 months. For a stock to be classified as Underperform, the stock return must be below the local risk free return by at least
5% over the next 12 months. Stocks between these bands are classified as Neutral.
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IPO UPDATE
Institutional Equity Team
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