Market Research Report : Hospital market in india 2013

Hospital Market in IndiaHospital Market in India
July 2013

Executive Summary
Market
Overview
 The hospital market in India was valued at INR x2 tn in 20‐‐ and is expected to reach INR x5 tn by
20‐‐
 The sector is divided primarily into public and private along with NGO operated hospitals
 Constantly rising population results in perennial shortage of hospital beds
Drivers &
Drivers:
Shortage in Number of Hospital Beds
Increasing Lifestyle Diseases
Challenges:
Shortage of Medical Professionals
Lack of Investment in IT Infrastructure
Drivers &
Challenges
Surge in Medical Tourism
Government Initiatives Propelling
Investment
Growing Target Hospitalization Population
Group
Shortage of FDI Inflow in Indian
Hospitals
Group
Growing Health Insurance Market
Rising Disposable Income
 Specialty Clinics
 Glocal Healthcare Systems
 Hospital Mobile Applications
 Hospital Information Centre
 Luxury Offerings
 Diversified Business ApproachKey Trends
Competitive
 Glocal Healthcare Systems  Hospital Information Centre  Diversified Business Approach
Key Players
Apollo Hospitals Enterprise Ltd. Fortis Healthcare (India) Ltd. Care Hospitals Pvt. Ltd.
y
2HOSPITAL MARKET IN INDIA 2013.PPT
Landscape Columbia Asia Hospital Pvt.
Ltd.
Manipal Health Enterprises Pvt.
Ltd.
Max Healthcare Institute
Ltd.

•Economic Indicators
•Indian Healthcare Scenario
•Introduction•Introduction
•Market Overview
•Drivers & Challenges
•IT Adoption
•Role of Government
•Key Trends•Key Trends
•Key Initiatives
•Competitive Landscape
•Trade Fairs & Events
•Recent Transactions
•Strategic Insights
3
Strategic Insights
•Appendix
HOSPITAL MARKET IN INDIA 2013.PPT

SAMPLE Economic Indicators (1/3)
INR tn
15
d4
c4d3
3
Gross Domestic Product At Factor Cost (At Constant Prices): Quarterly
14
13
12
11
b4
a4
c3
b3
a3
d2
c2
b2
a2
d1
c1
b1
a1
10
Q4Q3Q2Q1
20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐20‐‐ ‐ ‐‐
Inflation Rate: Monthly
N.B.: New Series Base : 2004‐05
y
0 8
1.0
%
ECB
0.2
0.4
0.6
0.8
DA
4
0.0
Mar 20‐‐ ‐ Apr 20‐‐Feb 20‐‐ ‐ Mar 20‐‐Jan 20‐‐ ‐ Feb 20‐‐Dec 20‐‐ ‐ Jan 20‐‐Nov 20‐‐ ‐ Dec 20‐‐

Healthcare system in India requires a larger public outlay
due to huge population base
Healthcare Industry Overview
• According to “World Health Statistics 2011 Report, India”,
healthcare comprised of r% of India’s GDP in 20‐‐
 Public and private expenditure on health as percentage of GDP
Healthcare Sector – Market Size & Growth
8 000
10,000
INR bn
A%
f
e
d Public and private expenditure on health as percentage of GDP
was r1% and r2% respectively
• Favorable demographics, increase in awareness levels
and better medical care are some factors that are driving
healthcare sector in India 0
2,000
4,000
6,000
8,000 d
c
b
a
healthcare sector in India
• Hospital forms the largest segment of overall healthcare
market followed by pharmaceutical, medical devices,
health insurance and diagnostics
G d l t ti f h lth i i t i
0
2017e2016e2015e2014e2013e2012
Healthcare Market Segmentation – 20‐‐ ‐ ‐‐
• Gradual penetration of health insurance is stepping up
affordability of health services through increased demand
for preventive and curative healthcare services
• Superior quality healthcare coupled with low treatment a%d% e%
f%
c%
cost in comparison to other countries is benefiting Indian
medical tourism, thereby steering forth Indian healthcare
market
 Treatment for major surgeries in India costs approximately m%
b%
c%
A EC
5
of that in developed countries B FD

SAMPLE FDI Inflow in Indian Healthcare Segments
Several healthcare segments in India have earned good volume of FDI over a 12
years’ span between 20‐‐ to 20‐‐
INR m bnHospital and diagnostic centers INR m1 bnHospital and diagnostic centers
INR m2 bnMedical and surgical appliances
INR m3 bnDrugs and pharmaceuticals sector

Hospitals can be classified on grounds of ownership and
clinical operation
Classification of Hospitals
Ownership Basis Clinical Basis
Public
Hospitals
Run by Central Government,
State Government and local bodies
General
Hospitals
Hospitals staffed by at least two medical
officers that provides in‐patient
accommodation and medical care for more
than one category of medical discipline
Private
Hospitals
Run by Central Government,
State Government and local bodies
Specialized
Hospitals
Provides medical attention  for one discipline
and is administratively attached  to a general
hospital
Isolation
H it l
Hospitals for the care of persons suffering from
i f ti di
Corporate
Hospitals
Public limited companies formed under
Companies Act run commercially and is likely
t t h i f h it l
Hospitals infectious diseases
Tertiary
Hospitals
State and Central government hospitals
established in their state capitals
p
to operate  chain of hospitals
Voluntary Functions with public or private funds on a
Teaching
Hospitals
A hospital to which a college is attached
for medical/dental education
Rural
Located in rural areas permanently staffed by
at least one physician that provides in‐patient
7
Voluntary
Hospitals
Functions with public or private funds on a
non‐commercial basis Hospitals accommodation and medical care for more
than one category of medical discipline

Hospitals is the most crucial aspect of Indian healthcare
sector, constantly developing to provide world class service
• Hospitals are a major component of the Indian
Healthcare industry forming more than a% of the total
healthcare sector’s revenue
Market Overview (1/2) Market Size and Growth – Private Hospitals
INR tn
6
x7healthcare sector s revenue
• Hospital sector is divided into public and private
 There are ~p private hospitals and ~q public hospitals across
the country
• Potential growth prospect of Indian healthcare is
attracting many foreign companies who are willing to
5
4
3
+X% x6
x5
x4
x3
x2attracting many foreign companies who are willing to
invest or establish base in India
 There is a growing trend to tap the high potential tier II and
tier III cities
 A trend of growth in specialty and multi specialty hospitals
in the country is also observed
2
1
0
20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e20‐‐
x2
20‐‐
x1
in the country is also observed 20 e20 e20 e20 e20 e2020
• Primary Healthcare facilities acts as the backbone of public healthcare system established and
operated primarily by government institutions with low involvement of private
• Based on approach of universality, comprehensiveness and equity in health, the country lags
behind in terms of standardization of processes, quality and service
Key Healthcare
Delivery Formats
• Secondary Care Hospitals that may or may not specialize in treatment of a specific ailment but
offers most essential services
• In most cases it caters to 85% to 90% of medical requirements
• The segment consists of district and all other privately run general private hospitals
• Tertiary Care Hospitals are specialized which offer specific facilities and employ highly
8
specialized practitioners who also offer specialized consultative care
• Service is provided by private, regional or central level institutions such as multi specialty and
single specialty hospitals

Drivers & Challenges – Summary
Drivers
Shortage in Number of Hospital BedsShortage in Number of Hospital Beds
Increasing Lifestyle Diseases
Challenges
Surge in Medical Tourism
Government Initiatives Propelling
Investment
G i T H i li i
Shortage of Medical Professionals
Lack of Investment in IT Infrastructure
Growing Target Hospitalization
Population Group
Growing Health Insurance Market
Shortage of FDI Inflow in Indian
Hospitals
Rising Disposable Income

Huge demand‐supply gap for hospital beds is the potent
driving element of the hospital market
• India faces an acute shortage in number of hospital beds in comparison to population level of
the country
Shortage in Number of Hospital Beds Impact
 According to World Health Statistics, India is positioned among the lowest countries on a global
perspective with which is far below the global average of s beds per t population
 According to National Health Profile 20‐‐, India has a public sector availability of one bed per f population
in g government hospitals which is only h beds per i population
• Public sector as well as private sector needs to pull up the number of hospitals and other p p p p
healthcare institutions as population growth will raise demand for more hospital beds
 By 20‐‐, population size will be d mn that will necessitate e mn beds to achieve High Level Expert Group
(HLEG) target of i beds per j population
Hospital Beds Per 1,000 Population – 2010
UK o
USA n
Japan m
Rural Urban Hospital Bed Ratio Comparison
s
Rural India Public
Hospital Bed Ratio
Rural India is
characterized by public
hospitals while Urban
India by private hospitals
Brazil s
China r
Sri Lanka q
Russia p
UK o
u
c
Private
Hospital
Bed Ratio
India by private hospitals
India u
Thailand t
Developed Nations
Emerging Nations Urban IndiaSouthern IndiaCentral India

Lack of foreign investments acts as an impediment to the
hospital market of the country
ImpactShortage of FDI Inflow in Indian Hospitals
• Indian hospitals is lagging behind in acquiring sufficient share of FDI
 FDI equity inflow in hospital sector is far low even when compared to drugs and pharmaceutical sector in
India
 FDI investment in hospital & diagnostic centers ranks ard in terms of amount of FDI equity inflows in period
between Apr 20‐‐ to Jan 20‐‐
• There are both internal and external issues that decelerate foreign investments in our country
Hospital & Diagnostic Centers
INR n bn ~ b%
Internal Issues
High cost involvement in hospital
establishment
Depreciation of medical equipments
Imbalance in FDI Investment Within Healthcare Sector
Drugs & Pharmaceuticals
INR m bn ~ a%
INR n bn b% Depreciation of medical equipments
Feasibility issue in upgrading healthcare
equipments
External IssuesINR m bn a%
Indian private hospitals unable to establish
hospitals overseas
Requirement of in‐depth localized
knowledge of host country
g y
Indian government fails to provide a clarity
in policies on overall healthcare sector

SAMPLE
IT Adoption in Hospital is progressing slow with only high
end corporate hospitals…
35
40
INR bn
18.3%
u
t
IT Spending on Healthcare
10
15
20
25
30
p
18.3% t
s
r
q
0
5
10
20‐‐ 20‐‐e20‐‐e20‐‐e20‐‐e20‐‐e
m%
•Business streamlining and patient administration
systems is the prime motive for IT adoption in
hospitals
H it l id b tt d t
n%
•Hospitals can provide better care and manage costs
better internally and patients can look for lower
healthcare costs
•IT leveraging and sharing data on cloud helps in saving
i f t t d t t t t
12
IT Adoption in Hospitals
IT Adoption in Other Healthcare Segments
infrastructure and manpower to a great extent

SAMPLE
Role of Government: Summary
SAMPLE
Budgetary Allocation
Role
of
Government
Financial Incentives
Public Private
PartnershipsFinancial Incentives Partnerships
(PPPs)

SAMPLEKey Trends
SAMPLE
Specialty
Diversified Business
Clinics
Glocal HealthcareDiversified Business
Approach
Glocal Healthcare
Systems
Key
Trends
Luxury
Offerings
Hospital Mobile
Applications
Trends
Hospital
Information Centre

SAMPLE Key Initiatives – Summary
Health Cities
Key
Initiatives
Telemedicine Mobile HospitalsTelemedicine Mobile Hospitals

‘Health Cities’ are gradually being popularized to cater
mostly to medical tourists
•Health Cities primarily include super specialty hospital attached to a medical college, residential
area with in‐house high end diagnostic centers, commercial zones and other common
infrastructure
H l h Ci i
•Health Cities cater to larger populations by offering additional facilities such as hotels, recreational
facilities such as spa, gym and even golf courses
•They are also expected to lay a greater emphasis on education and R&D
Health Cities
Narayana Hrudayalaya
• As on May 20‐‐, the group aims to build s bed health
cities that will offer medical care facilities in heart
Odisha State Government
• As on Jul 20‐‐, the state government is planning to
set up an integrated health city on the outskirts of
Bhubaneshwarcities that will offer medical care facilities in heart,
kidney and cancer
• One city each is planned in Jaipur and West Bengal,
while two shall come up on the outskirts of Kolkata
• As on Dec 20‐‐, the group is in plans to initiate a
Bhubaneshwar
• Concept note of the project has been prepared by
Industrial Infrastructure Development Corporation of
Odisha
• Project is aimed at making the state a complete
health destination and promote medical tourismAs on Dec 20 , the group is in plans to initiate a
centre in Lucknow, UP with a bed capacity of m‐n
beds
health destination and promote medical tourism
• The government would promote the project on
public private partnership with one or two mega
healthcare promoters as anchors of the proposed city
• QRG Enterprises announced its plan of penetrating healthcare segment with hospital chain in NCR along with Ludhiana, Agra and Jaipur as
Q G te p ses a ou ced ts p a o pe et at g ea t ca e seg e t t osp ta c a C a o g t ud a a, g a a d Ja pu as
on Jun 20‐‐
• The group plans to set up a p‐bedded super‐specialty facility in Faridabad that is expected to be commissioned in Sep 20‐‐ with an
investment of INR d bn that would be named ‘QRG Health City’

Competitive Benchmarking (2/5)
Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (1/3)
40
% Net MarginOperating MarginGross Margin
10
20
30
40
c3
b3
c2
b2
a2
c1
b1
a1
0
CB
c2
A
• A recorded gross margin of a1%, higher than B which recorded gross margin of a2%
• A recorded an operating margin of b1%, higher than both B and C that recorded an operating margin of b2% and b3%
respectively
• A recorded a net margin of c1, higher than both B and C that recorded net margin of c2 and c3 respectively

Major Public Companies ‐ Summary
500,000,000
Net Profit
(INR mn)
100 000 000
200,000,000
300,000,000
400,000,000 Size of bubble represents
Market Capitalization in INR mn
‐200,000,000
‐100,000,000
0
100,000,000
ba
‐500,000,000
‐400,000,000
‐300,000,000
‐700,000,000
‐600,000,000
15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000
Revenue
(INR mn)
18
BA

Private: Domestic Company – Player A (1/5)
Company Information Offices and Centres – India
Corporate Address xx
Tel No. xx
Website xx
Year of Incorporation xx
Delhi
Head OfficeProducts and Services
Category Products/Services
Key People
N D i ti
Category Products/Services
Sports Goods xx
Fitness Equipment xx
Name Designation
Equipment Supplier xx
Others xx

Shareholders of the Company as on xx/xx/20‐‐ Ownership Structure
Name No. of Shares held
100 0%100 0%100 0%
Directors or relatives of directors
100.0%100.0%100.0%
Total
20‐‐20‐‐20‐‐
Ownership structure corresponds to Date of AGM: xx/xx/20‐‐,
xx/xx/20‐‐ and xx/xx/20‐‐

i i l S h K i
Financial Snapshot Key Ratios
Particulars
y‐o‐y change
(20‐‐ ‐ ‐‐)
20‐‐ 20‐‐ 20‐‐ 20‐‐
Profitability Ratios
Operating Margin N.A. N.A. N.A. N.A. N.A.
Net Profit/LossTotal Income
INR mnINR mn
n
Net Margin N.A. N.A. N.A. N.A. N.A.
Profit Before Tax Margin N.A. N.A. N.A. N.A. N.A.
Return on Equity 1.47 5.36% 3.89% 0.00% 0.00%
Return on Capital Employed 0.00 0.00% 0.00% 0.00% 0.00%
Return on Working Capital 0.00 0.00% 0.00% 0.00% 0.00%
Return on Assets 0.00 0.00% 0.00% 0.00% 0.00%
m
Financial Summary
Return on Fixed Assets 0.00 0.00% 0.00% 0.00% 0.00%
Cost Ratios
Operating costs (% of Sales) N.A. N.A. N.A. N.A. N.A.
Administration costs (% of
Sales)
N.A. N.A. N.A. N.A. N.A.
Interest costs (% of Sales) N A N A N A N A N A
0
20‐‐20‐‐
• Company earned a net profit of INR m units in FY 20‐‐, as
compared to net profit of INR n units in FY 20‐‐
• It reported total income of INR p units in FY 20‐‐,
registering an increase of t per cent from FY 20‐‐
Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A.
Liquidity Ratios
Current Ratio ‐10.83% 1.76 1.97 1.71 2.07
Cash Ratio ‐35.86% 0.16 0.24 0.20 0.32
Leverage Ratios
Debt to Equity Ratio 14.21% 1.16 1.02 0.50 0.50
• The company reported a debt to equity ratio of x
percentage points in FY 20‐‐, an increase of y per cent over
FY 20‐‐
Debt to Capital Ratio 6.57% 0.54 0.50 0.33 0.34
Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.
Efficiency Ratios
Fixed Asset Turnover N.A. 0.00 0.00 0.00 0.00
Asset Turnover N.A. 0.00 0.00 0.00 0.00
Current Asset Turnover N.A. 0.00 0.00 0.00 0.00
21
Improved Decline
Current Asset Turnover N.A. 0.00 0.00 0.00 0.00
Working Capital Turnover N.A. 0.00 0.00 0.00 0.00
Capital Employed Turnover N.A. 0.00 0.00 0.00 0.00

Business Highlights
Description News
Overview • xx
Facilities • xx

Public: Domestic Company – SWOT Analysis – Player A (5/5)
XX
• XX
• XX
O
WS
TO
• XX• XX

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Hospital Market – India report is part of Research on India’s Healthcare Industry Series.
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Market Research Report : Hospital market in india 2013