HOSPITAL INDUSTRY

INDUSTRY COMPOSITION
HOSPITALS

HEALTHCARE

PHARMA
DIAGONOSTICS MEDICAL EQUIPMENTS MEDICAL INSURANCE

MEDICAL MEDICAL DIAGNOS TICS EQUIPME INSURAC 3% NT & E SUPPLIES 4% 9%

PHARMA CEUTICAL S 13%

HOSPITAL S 71%

CURRENT SCENARIO
• Valued to be worth USD 40 Billion • Highly fragment and dominated by top players • Growing old age population, increasing lifestyle diseases combined with rising Income & affordability • Expected to grow at 24.1% p.a. till 2020

Consistently growing GDP(%) 10 8 6 4 2 0 2000-01 Growth of Healthcare Industry 40 35 30 25 CAGR 9.3% 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 20 15 10 5 0 2000 2005 2008 .

0% 0.0% 2.0% 6.Spending as % of gdp (2008) 16.2% 8.2% India Global .4% 8.0% 14.7% 4.0% 4.0% 15.3% 4.3% USA Brazil UK China Country 8.0% 10.0% 12.0% GDP 8.

there is an emphasis on the need for specialty care Total Population Growth Indian Population Count (mn) 1.000 Significant population growth between 1970 .500 1. 33 percent of the total pie) and a growing geriatric and pediatric population.2000 500 0 6 .Population Growth India is the worlds second most populous country  With a billion plus population the need for healthcare is universal – for both Urban and Rural India.  With an increasing incidence of life style diseases (approx.

59 yrs 7 .Break up Neuro/ CNS 6% Derma 6% AntiDiabetic 5% Antiinfectives 21% 60 yrs & above 6 yrs & below Gynaec 6% Vitamins/ minerals/ Nutrients 10% Gastrointestinal 13% Pain/ Analgesic 10% Respirato ry 11% Cardiac 12% 15 .14 yrs .

Global comparison .

9 percent.  Government Initiatives like NRHM. Public Healthcare .000. NUHM and RSBY are working towards better healthcare for the poor. but still far behind that of other developing countries  The government’s share in the healthcare delivery market is only 20 percent. the present number of 9 per 10.  The current NHP aims to increase the government contribution to healthcare to touch 2 percent of the GDP by the end of the five year tenure. There has been a significant increase in public infrastructure over the years.  While in 1947 the number of hospital beds was 3. an increase from the present contribution of 0.2 per 10.000 is commendable.

Investment Policy Updates • Government initiatives in the public health sector have recorded some noteworthy successes over time with focus on investments related to better medical infrastructure. • 100 per cent FDI is permitted for health and medical services under the automatic route. rural health facilities etc.72 billion in 2012-13 from US$ 3. DIPP . Source: Consolidated FDI Policy. • The National Rural Health Mission (NHRM)’s allocation has been proposed to be increased to US$ 3.23 billion in 2011-12.

Service Tax exemption and Rural and Tier II hospitals exempt from Income Tax for 5 yrs.  Extensive landscape of private players with multi & super specialty hospitals.  Increasing Private Equity investment into the sector. Nearly 80% of the total spend. constituting 94% of the total spend in the private health industry. 100% FDI under the automatic route. . Private healthcare is on a high growth path. and “MediCities”. with an affinity towards innovative rural models and super specialty care.  With „Infrastructure‟ status. Out of pocket spending is one of the highest.  In India. innovative rural models.Private Healthcare  India has one of the highest private spending in healthcare as compared to other countries.

0 3.0 2.0 1.0 0.5 2.0 1.5 0.8 0.5 3.0 6.6 0.0 USD bn USD bn 0.0 2006 2008 2012 Medical Equipment & Devices 2006 2008 2012 -2.5 1.0 Medical Tourism 1.5 1.4 0.5 USD bn USD bn 2.0 0.2 1.Healthcare Services Associated Industries Diagnostics & Pathology 8.5 0.0 4.2 0.0 2.0 2.0 0.0 2006 2008 2012 .0 2006 2008 2012 Private Health Insurance 3.

15 2008 1 0.Healthcare Industry in India in 2012 80 70 60 Insurance Medical Tourism Hospitals Medical Equipment Diagnostics 50 USD Bn 40 30 20 10 0 Insurance Medical Equipment Medical Tourism Diagnostics Hospitals 2006 0.2 27.49 0.8 0.83 19.5 1.7 32.7 1 2.7 1.4 0.5 54.5 .9 4.4 2010 (P) 1.9 2012 (P) 3 6.18 0.35 0.

HOSPITAL INDUSTRY Hospitals Type of Services Primary Care Secondary Care Tertiary Care Quaternary Care Complexity of Ailment Ownership .

Growth Drivers Economic Growth Availability of Insurance Regulatory Support GROWTH Available Skilled Manpower Changing Population Demographics Multiplicity of Disease Profile .

flow Growth Rising Income Policy Support Initiatives Investments Inviting Custom Duty Reduction Resulting in Investments Rising FDI Elderly population Lifestyle diseases M&A Opportunities .

• As private investments have been skewed towards in-patient department (IPD) treatments. its share in the overall market is expected to increase from 64 per cent in 2010-11 to 66 per cent by 2015-16.Expected growth rate – 12% to Rs 4. . the industry is expected to register a CAGR of 12% • The industry would reach Rs 4.2 trillion in 201516.2 trillion by 2015-16 • As healthcare coverage across the country increases.

Unmet need Source: KMPG. IMF. MEGStrat .

. • In terms of hospital beds per 10.000 people. India has just 9 beds. Sri Lanka 31. UK 21 and China 14. UK 34.India lags far behind global norms • India falls short on several global benchmarks for healthcare delivery in terms of manpower and infrastructure. India has one of the least among the developing world. India has 6. USA 31. USA 27. • In terms of number of physicians per 10.000 people. While Countries like Germany have 82. Countries like Germany have 35.

as per WHO statistics. • In order to meet the global median of 24 beds per 10. Thailand. . Sri Lanka and Vietnam in terms of both beds to population and physicians to population ratios. India ranks below even developing countries like China.000 population.Investments of over Rs 5.6 trillion would be required over the next 5 years. investments of Rs 5.6 trillion required • India lags behind several global benchmarks for healthcare delivery. • In terms of both healthcare infrastructure and manpower.

Major Players Source: IBEF .

the company reported a net loss of Rs 604 mn due to a significant increase in interest costs. • Despite strong growth in revenues and stable EBITDA margin. 2001. incorporated on June 18. 41. • The significant y-o-y jump in revenues was due to consolidation of the international business in Q4FY12. • The market capitalization is Rs. is a 100 per cent subsidiary of Fortis Healthcare • Revenues grew by 191% y-o-y and 10% q-o-q to Rs 14.FORTIS HEALTHCARE • Fortis Hospitals.1 bn.037 Mn .

10.307 beds .

82. • They have a total of 2700 para medical personnel.3% y-o-y and 4. and is among Asia’slargest hospital networks. • Market capitalization is Rs.774 mn.4% q-o-q to Rs 7.Apollo Hospitals Enterprise Limited • Apollo Hospitals Enterprise Limited (Apollo) is India’s leading private sector healthcare services provider. diagnostics and preventive health check-ups. over 1350 network of standalone pharmacies across India in over 20 states and over 100 primary clinics offering consultation.905 mn. . • Revenues grew by 21.

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Growth strategies .

Opportunities • Lack of adequate healthcare infrastructure • Heavy burden of patients. with scarcity of man powers • Lack of sophisticated equipments • Accessibility and coverage in rural area is low .

Challenges  Low Government funding & lack of efficient execution of schemes & initiatives  Shortfall in Health care infrastructure  Inadequate accessibility to affordable quality services  Financial constraints with respect to infrastructural needs  Shortage of quality workforce .

The way forward  Step-up in Government funding and initiatives via a special task force  Increased use of Public-Private Partnership Models  Addressing geographic accessibility through PPP and harnessing local resources  Creating a Global Source of Skill  Efficient dissemination of healthcare related information  Establishment of Industry Body representation from all stakeholders with adequate  Healthcare Education .