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THE ASSUMPTIONS

Healthcare services provided in the proposed hospital


There is a lack of required infrastructure in the healthcare sector in Meghalaya. The rising health problems like cancer, trauma and heart diseases have added to the existing problem of inadequate infrastructure. The below given facts illustrate the need for the opening up of more healthcare facilities in the state are: There has been increase in the number of cancer cases in Meghalaya with a total of 2620 reported cases during the last 5 years. About 42.3 percent of the States population is still uncovered by health care, according to the status paper prepared by the Health Department. It presents one of the potential target population segments for the proposed hospital. According to the National Family Health Survey (NFHS) 1992-93, the percentage of children fully vaccinated in Meghalaya is very low at 10 percent and more than half of the children surveyed have received no vaccination at all. Thus, providing vaccination services will add to the outdoor revenues for the hospital. 46 percent of the children under age four are under-weight and more than 50 percent suffer from under-nutrition. Under 5 Mortality Rate (U5MR) which stands at 87. The Maternal Mortality Rate (MMR) which is 349 also highlights the poor state of affairs. The debility due to pregnancies, extreme hard work and low nutritional levels have paved the way for an alarming rise in tuberculosis in women in the state. A significant portion of women do not receive any antenatal/postnatal care and a large percentage of deliveries are conducted by untrained birth attendants or relatives. In Meghalaya, the rate of cardio vascular diseases was 3 percent. Meghalaya would have 90,000 heart patients every year, which is very alarming.

National Rural Health Mission (NRHM) is a National effort at ensuring effective health care through a range of intervention at individual, household, community and most critically at the Health System Levels. Expected outcome of the Mission for Meghalaya: 1. 2. 3. 4. Infant Mortality Rate (IMR): To be reduced to 30/1000 live births by 2012. Maternal Mortality Rate (MMR): To be reduced to 100/100,000 live births by 2012. Total Fertility Rate(TFR): To be reduced to 2.1 by 2012. Malaria Mortality Reduction Rate(MMRR) - Reduced by 50% up to 2010, additional 10% by 2012.

5. Cataract Operations: Increase to 10,000 by 2012. 6. Leprosy Prevalence rate(LPR): Reduced from 1.8 per 10,000 in 2005 to less than 1 percent thereafter. 7. Tuberclosis DOTS series: To maintain 85% cure rate through entire Mission Period and also sustain planned case detection rate. 8. Upgradation of Facilities: All Community Health Centers to be upgraded to Indian Public Health Standards. 9. First Referral Units(FRU): Increase utilization of FRUs from bed occupancy by referred cases of less than 20% to over 75%. 10. Accredited Social Health Activist (ASHA): Engaging 6250 female Accredited Social Health Activists (ASHAs) Since there are many efforts undertaken by the government authorities and the private entities in Meghalaya to promote the use of healthcare services by the public, the occupancy rate of the proposed hospital, which is offering such wide range of medical treatment facilities is expected to be approximately 60% in the initial period and will eventually increase in the future. It is expected to increase upto 65% by 2035 and will continue approximately at that level thereon. The OPDs contribution to total revenue is estimated to be around 30% of the income generated from IPD patients per day.

Other Assumptions
1. The values of the economic variables as applicable to the economy of India is taken for: Interest rate on long term loan, corporate tax rate, dividend distribution tax, risk free rate, WPI inflation rate, Debt-to-equity ratio, exchange rate. The salary growth rate of 4% is taken as applicable to the hospital industry in Meghalaya. Other economic variables are derived from these variables. 2. The tail period is taken as 5 years i.e. the repayment of debt will be completed 5 years before the termination of the contract. This tail period is taken to act as a buffer period so that even if the payment is delayed or prolonged for some reasons, it can be completed in the due course of the contract period. 3. The depreciation rates for various classes of assets used in the assumptions for calculations are taken from Apollo Hospital. 4. The tuition fee for the medical college is taken as prevalent in the medical colleges in India currently. 5. The ratios like current assets/revenue, current liabilities/revenue, COGS/revenue, marketing expenses/revenue, miscellaneous/revenue, dividend payout ratio are taken as per our estimation after reviewing the ratios for other hospitals and modifying them by keeping in mind the kind of structure planned for the hospital, the demographics of the state, the current scenario in the state etc. 6. The salary for various categories of employees and the costs for various treatments under IPD (Inpatient Department) is taken as per the industry average. 7. The room charges and nursing charges vary for various categories of rooms to cater to the different classes of people demanding different levels of services and facilities.

These figures are taken as average for the hospital industry. More number of rooms is kept as general category rooms keeping in mind the poverty levels and low income levels in the state which would influence the affordability. 8. The outdoor revenues will include general consulting charges, vaccination charges, medicine costs, diagnostic charges etc. Tuberclosis, malaria and leprosy which are one of the prevalent diseases in Meghalaya will be covered under OPD. (Medicine cost and diagnostic charges for OPD are not considered otherwise in pharmacy costs).

9. Please add here how you took figures for ancillary activities.

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