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Hospital Market in India Hospital Market in India July 2013


Executive Summary Market  Overview

Drivers &  Drivers & Challenges

Key Trends y

 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:

Challenges:

 Shortage in Number of Hospital Beds  Increasing Lifestyle Diseases  Surge in Medical Tourism   Government Initiatives Propelling  Investment  Growing Target Hospitalization Population  Group  Growing Health Insurance Market   Rising Disposable Income

 Shortage of Medical Professionals  Lack of Investment in IT Infrastructure  Shortage of FDI Inflow in Indian  Hospitals

 Specialty Clinics  Glocal Healthcare Systems Glocal Healthcare Systems

 Hospital Mobile Applications  Hospital Information Centre   Hospital Information Centre

 Luxury Offerings  Diversified Business Approach Diversified Business Approach

Key Players

Competitive Landscape

Apollo Hospitals Enterprise Ltd.  Fortis Healthcare (India) Ltd. 

Care Hospitals Pvt. Ltd. 

Columbia Asia Hospital Pvt.  Ltd. 

Max Healthcare Institute  Ltd. 

Manipal Health Enterprises Pvt.  Ltd. 

HOSPITAL MARKET IN INDIA 2013.PPT

2


•Economic Indicators •Indian Healthcare Scenario  •Introduction •Market Overview •Drivers & Challenges •IT Adoption •Role of Government  •Key Trends •Key Trends •Key Initiatives •Competitive Landscape •Trade Fairs & Events •Recent Transactions •Strategic Strategic Insights Insights •Appendix HOSPITAL MARKET IN INDIA 2013.PPT

3


SAMPLE

Economic Indicators (1/3)

Gross Domestic Product At Factor Cost (At Constant Prices): Quarterly INR tn 15 14

d1 c1 b1

13 12

d2 c2 b2 a2

a1

11

d4 c4 b4

d3 c3 3 b3

a4

a3

10 Q1

Q2 20‐‐ ‐ ‐‐

20‐‐ ‐ ‐‐

20‐‐ ‐ ‐‐

Q3 20‐‐ ‐ ‐‐

Q4 N.B.: New Series Base : 2004‐05

Inflation Rate: Monthlyy % B

1.0

C

E

08 0.8 0.6

A

D

0.4 0.2 0.0

Nov 20‐‐ ‐ Dec 20‐‐

Dec 20‐‐ ‐ Jan 20‐‐

Jan 20‐‐ ‐ Feb 20‐‐

HOSPITAL MARKET IN INDIA 2013.PPT

Feb 20‐‐ ‐ Mar 20‐‐

Mar 20‐‐ ‐ Apr 20‐‐ 4


Healthcare system in India requires a larger public outlay  due to huge population base   Healthcare Industry Overview

Healthcare Sector – Market Size & Growth

INR bn • According to “World Health Statistics 2011 Report, India”,  10,000 healthcare comprised of r% of India’s GDP in 20‐‐  Public and private expenditure on health as percentage of GDP  Public and private expenditure on health as percentage of GDP was r1% and r2% respectively 

8 000 8,000 6,000

f

A% a

d

c

b

e

• Favorable demographics, increase in awareness levels  4,000 and better medical care are some factors that are driving  2,000 0 healthcare sector in India healthcare sector in India 2012 2013e 2014e 2015e 2016e 2017e • Hospital forms the largest segment of overall healthcare  market followed by pharmaceutical, medical devices,  Healthcare Market Segmentation – 20‐‐ ‐ ‐‐ health insurance and diagnostics  • Gradual penetration of health insurance is stepping up  G d l t ti f h lth i i t i f% affordability of health services through increased demand  for preventive and curative healthcare services d% e% a% • Superior quality healthcare coupled with low treatment  c% cost in comparison to other countries is benefiting Indian  medical tourism, thereby steering forth Indian healthcare  b% market  Treatment for major surgeries in India costs approximately m%  of that in developed countries

HOSPITAL MARKET IN INDIA 2013.PPT

A

C

E

B

D

F

5


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‐‐

Hospital and diagnostic centers Hospital and diagnostic centers

INR m1 bn INR m

Medical and surgical appliances

INR m2 bn

Drugs and pharmaceuticals sector

INR m3 bn

HOSPITAL MARKET IN INDIA 2013.PPT

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Hospitals can be classified on grounds of ownership and  clinical operation Classification of Hospitals Ownership Basis

Public Hospitals

Clinical Basis

Run by Central Government, State Government and local bodies

Private Hospitals

Run by Central Government, State Government and local bodies

Corporate Hospitals p

Public limited companies formed under  Companies Act run commercially and is likely  t to operate  chain of hospitals t h i f h it l

Voluntary Voluntary Hospitals

Functions with public or private funds on a  Functions with public or private funds on a non‐commercial basis

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

Specialized Hospitals

Provides medical attention  for one discipline  and is administratively attached  to a general  hospital

Isolation H it l Hospitals

Hospitals for the care of persons suffering from  i f ti infectious diseases di

Tertiary Hospitals

State and Central government hospitals  established in their state capitals 

Teaching Hospitals

A hospital to which a college is attached  for medical/dental education

Rural Hospitals

Located in rural areas permanently staffed by  at least one physician that provides in‐patient  accommodation and medical care for more  than one category of medical discipline

HOSPITAL MARKET IN INDIA 2013.PPT

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Hospitals is the most crucial aspect of Indian healthcare  sector, constantly developing to provide world class service Market Overview (1/2)

Market Size and Growth – Private Hospitals

• Hospitals are a major component of the Indian  Healthcare industry forming more than a% of the total  healthcare sector’ss revenue healthcare sector revenue • Hospital sector is divided into public and private   There are ~p private hospitals and ~q public hospitals across  the country  

INR tn 6

x7

5

x6

+X% 4

• Potential growth prospect of Indian healthcare is  attracting many foreign companies who are willing to attracting many foreign companies who are willing to  invest or establish base in India

3

 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 in the country is also observed

1

2

x5 x4 x1

x2

x3

0 20‐‐ 20

20‐‐ 20

20‐‐ee 20

20‐‐ee 20

20‐‐ee 20

20‐‐ee 20

20‐‐ee 20

• 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  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

8


Drivers & Challenges – Summary Drivers Shortage in Number of Hospital Beds Shortage in Number of Hospital Beds Increasing Lifestyle Diseases

Challenges

Surge in Medical Tourism 

Shortage of Medical Professionals

Government Initiatives Propelling  Investment

Lack of Investment in IT Infrastructure

Growing Target Hospitalization  G i T H i li i Population Group

Shortage of FDI Inflow in Indian  Hospitals

Growing Health Insurance Market  Rising Disposable Income

HOSPITAL MARKET IN INDIA 2013.PPT

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Huge demand‐supply gap for hospital beds is the potent  driving element of the hospital market Shortage in Number of Hospital Beds

Impact

• India faces an acute shortage in number of hospital beds in comparison to population level of  the country  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

Rural Urban Hospital Bed Ratio Comparison

Hospital Beds Per 1,000 Population – 2010  Japan USA UK Russia Sri Lanka China Brazil Thailand India

Rural India Public  Hospital Bed Ratio

m n

s o p

q r s t u

Rural India is  characterized by public  hospitals while Urban  India by private hospitals India by private hospitals Private  Hospital  Bed Ratio

c

u Developed Nations Emerging Nations

Central India

HOSPITAL MARKET IN INDIA 2013.PPT

Southern India

Urban India

10


Lack of foreign investments acts as an impediment to the  hospital market of the country Shortage of FDI Inflow in Indian Hospitals

Impact

• 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

Imbalance in FDI Investment Within Healthcare Sector Hospital & Diagnostic Centers INR n bn ~ b% INR n bn  b%

Internal Issues High cost involvement in hospital  establishment Depreciation of medical equipments Depreciation of medical equipments  Feasibility issue in upgrading healthcare  equipments

Drugs & Pharmaceuticals INR m bn ~ a% INR m bn  a%

External Issues Indian private hospitals unable to establish  hospitals overseas Requirement of in‐depth localized  knowledge of host country g y Indian government fails to provide a clarity  in policies on overall healthcare sector HOSPITAL MARKET IN INDIA 2013.PPT

11


IT Adoption in Hospital is progressing slow with only high  end corporate hospitals…

SAMPLE

INR bn

IT Spending on Healthcare

40

u

35 30 25 20 15 10

18.3%

t s

p

r

q

5 0

20‐‐

20‐‐e

20‐‐e

m%

20‐‐e

20‐‐e

20‐‐e

• Business streamlining and patient administration  systems is the prime motive for IT adoption in  hospitals  • Hospitals can provide better care and manage costs  H it l id b tt d t better internally and patients can look for lower  healthcare costs  • IT leveraging and sharing data on cloud helps in saving  i f t t infrastructure and manpower to a great extent d t t t t

n% IT Adoption in Hospitals IT Adoption in Other Healthcare Segments

HOSPITAL MARKET IN INDIA 2013.PPT

12


Role of Government: Summary  

SAMPLE SAMPLE Budgetary Allocation

Role of  Government  Public Private  Partnerships Partnerships  (PPPs)

Financial Incentives Financial Incentives 

HOSPITAL MARKET IN INDIA 2013.PPT

13


Key Trends

SAMPLE SAMPLE Specialty  Clinics

Diversified Business  Diversified Business Approach

Glocal Healthcare  Glocal Healthcare Systems

Key Trends Luxury Offerings

Hospital Mobile  Applications Hospital  Information Centre  

HOSPITAL MARKET IN INDIA 2013.PPT

14


SAMPLE

Key Initiatives – Summary  

Health Cities

Key Initiatives Telemedicine

Mobile Hospitals Mobile Hospitals

HOSPITAL MARKET IN INDIA 2013.PPT

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‘Health Cities’ are gradually being popularized to cater  mostly to medical tourists

H l h Ci i Health Cities

• 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  • 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 Narayana Hrudayalaya

Odisha State Government

• As on May 20‐‐, the group aims to build s bed health  cities that will offer medical care facilities in heart cities 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 As on Dec 20‐‐,, the group is in plans to initiate a  the group is in plans to initiate a centre in Lucknow, UP with a bed capacity of m‐n  beds

• As on Jul 20‐‐, the state government is planning to  set up an integrated health city on the outskirts of  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 tourism 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

•Q QRG Enterprises announced its plan of penetrating healthcare segment with hospital chain in NCR along with Ludhiana, Agra and 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 Jaipur as  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’ HOSPITAL MARKET IN INDIA 2013.PPT

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Competitive Benchmarking (2/5) Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (1/3) Gross Margin

% 40

a1

Net Margin

a2

30 20

Operating Margin

b1 c1

10

b2

b3 c2

c3

0

A

B

C

• 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

HOSPITAL MARKET IN INDIA 2013.PPT

17


Major Public Companies ‐ Summary  Net Profit (INR mn) 500,000,000

Size of bubble represents  Market Capitalization in INR mn

400,000,000 300,000,000 200,000,000 100 000 000 100,000,000

a

0

b

‐100,000,000 ‐200,000,000 ‐300,000,000 ‐400,000,000 ‐500,000,000 ‐600,000,000 ‐700,000,000 15,000

20,000

25,000

30,000

35,000

40,000

A

45,000

50,000

55,000

60,000

65,000

70,000

Revenue (INR mn)

B

HOSPITAL MARKET IN INDIA 2013.PPT

18


Private: Domestic Company – Player A (1/5) Company Information Corporate Address

xx

Tel No.

xx

Website

xx

Year of Incorporation

xx

Offices and Centres – India 

Delhi

Products and Services Category

Products/Services

Sports Goods

xx

Fitness Equipment

xx

Head Office

Key People N Name

Equipment Supplier

xx

Others

xx

HOSPITAL MARKET IN INDIA 2013.PPT

D i ti Designation

19


Private: Domestic Company – Player A (2/5) Shareholders of the Company as on xx/xx/20‐‐ Name 

Ownership Structure Directors or relatives of directors

No. of Shares held 

100 0% 100.0%

100 0% 100.0%

100 0% 100.0%

20‐‐

20‐‐

20‐‐

Total

Ownership structure corresponds to Date of AGM:  xx/xx/20‐‐,  xx/xx/20‐‐ and xx/xx/20‐‐ HOSPITAL MARKET IN INDIA 2013.PPT

20


Private: Domestic Company – Player A (3/5) Financial Snapshot i i lS h Total Income INR mn

K Key Ratios i Particulars 

Net Profit/Loss INR mn

n

0 20‐‐

20‐‐

20‐‐

20‐‐

20‐‐

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

m

y‐o‐y change  (20‐‐ ‐ ‐‐)

N.A.

N.A.

N.A.

N.A.

N.A.

1.47

5.36%

3.89%

0.00%

0.00%

0.00

0.00%

0.00%

0.00%

0.00%

0.00

0.00%

0.00%

0.00%

0.00%

0.00

0.00%

0.00%

0.00%

0.00%

0.00

0.00%

0.00%

0.00%

0.00%

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

NA N.A.

NA N.A.

NA N.A.

NA N.A.

NA N.A.

‐10.83%

1.76

1.97

1.71

2.07

‐35.86%

0.16

0.24

0.20

0.32

Cost Ratios

20‐‐

Operating costs (% of Sales) Administration costs (% of  Sales) Interest costs (% of Sales) Interest costs (% of Sales)

Financial Summary  • Company earned a net profit of INR m units in FY 20‐‐, as  compared to net profit of INR n units in FY 20‐‐

Liquidity Ratios

• It reported total income of  INR p units in FY 20‐‐,  registering an increase of t per cent from FY 20‐‐

Leverage Ratios

• The company reported a debt to equity ratio of x  percentage points in FY 20‐‐, an increase of y per cent over  FY 20‐‐

Current Ratio Cash Ratio Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio

14.21%

1.16

1.02

0.50

0.50

6.57%

0.54

0.50

0.33

0.34

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

0.00

0.00

0.00

0.00

N.A.

0.00

0.00

0.00

0.00

N.A.

0.00

0.00

0.00

0.00

N.A.

0.00

0.00

0.00

0.00

N.A.

0.00

0.00

0.00

0.00

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

Improved

HOSPITAL MARKET IN INDIA 2013.PPT

Decline

21


Private: Domestic Company – Player A (4/5) Business Highlights Description 

News

Overview

• xx

Facilities

• xx

HOSPITAL MARKET IN INDIA 2013.PPT

22


Public: Domestic Company – SWOT Analysis – Player A (5/5)

• XX • XX

S

W

O

T

• XX

• XX

HOSPITAL MARKET IN INDIA 2013.PPT

23


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: Phone: Ph E‐Mail:

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Market Research Report : Hospital market in india 2013  

For the complete report, get in touch with us at : info@netscribes.com Indian hospital market faces a critical crunch in the number of hos...

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