Corporate hospital sector witnesses healthy growth

The corporate hospital sector of the country is all set to take away a significant share of the tertiary healthcare service business from individual private healthcare providers by 2010.

All major players, doing brisk business, have lined up plans for green field projects and acquisitions capable of at least doubling their capacities within two years.

Existing corporate like Apollo, Fortis, Wockhardt and Max have all announced plans for setting up new healthcare facilities. Corporate groups like Apollo Tyres and Paras are among the new entrants in the healthcare business.

The move is triggered by the growth in the GDP, emergence of health insurance and expected growth in the medical tourism.

Says Vishal Bali, CEO, Wockhardt Hospitals "The corporate healthcare segment is to replicate the success of Indian IT sector. Healthcare space is getting more and more organised. Ten years from now, 30 - 40% of tertiary healthcare delivery could come from corporate sector."

Wockhardt which had a bed strength of 650 two years ago, currently has 10 hospitals with 1500 beds across five states. Two 250 bedded hospitals are coming up in Calcutta and Delhi. The company intends to reach out to second tier cities too in future.

Meanwhile, Max Healthcare Institute Limited, a major player in the National Capital Region of Delhi saw its revenue from all six hospitals grow 195 per cent during 2005-06.

The company, that will complete its first phase of expansion with the completion of its 100 bedded hospital in Gurgaon next year is planning to go beyond NCR as its next growth phase. We are also very much interested in being part of the "global healthcare option space", Mukesh Shivbasani, CEO, Max Healthcare told Business Standard.

The consolidated turnover of Apollo Hospitals Group, leading healthcare chain of the country also showed a steady growth during the last few years. Apollo turnover for H1 2006 was Rs 498.3 crore as against the annual turnover of Rs 779.1 crore for the previous year. Apollo also added 255 beds to its combined bed strength during H1 2006.

Paras Healthcare, the new entrant into the hospital business, plans to invest about Rs 650 crore in next two years to set up five specialty hospitals in NCR region. The first project of the group, a 250 bedded speciality hospital focusing on neuro-surgery, trauma, orthopedics, and mother & child, is already completed.

"The second phase of our expansion involves the setting up of three green field hospitals and two acquisitions in NCR within two years. Our green field projects will have a bed size of 250 each and the acquisitions will be of small facilities with 60 - 70 bed strength", Dr Dharmender Nagar, Managing Director, Paras Hospitals said.

The report of the National Commission on Macroeconomics and Health had estimated the size of private healthcare sector in India to be worth Rs 69,000 crore and projected that size to double to Rs 156,000 crore by 2012,besides an additional Rs 39,000 crore if health insurance picks up. With the current pace, the corporate segment in the private medical service sector is likely to absorb a good share of this business.