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Health-care cos eye opportunity in small, boutique hospital space

Health-care cos eye opportunity in small, boutique hospital space
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First Published: Wed, Apr 25 2007. 12 38 AM IST

Fortis Hospital
Fortis Hospital
Updated: Wed, Apr 25 2007. 12 38 AM IST
Mumbai : Wockhardt Hospitals Ltd is shifting from its earlier strategy of building large multi-speciality hospitals and is now acquiring a much smaller 60-bed hospital. This will be its second hospital in the Greater Mumbai region.
It is part of a nascent trend in India of hospital companies focusing on niche facilities, be it for women or for childbirth or for critical care alone.
Unlike its existing 300-bed facility at Mumbai’s northeastern suburb of Mulund, which has specialities such as heart, spine, eye, etc., the second one was a stand-alone unit owned and managed by a medical professional, somewhat like a large nursing home.
This Navi Mumbai facility, which Wockhardt, an affiliate of the pharmaceuticals company Wockhardt Ltd, will invest in through a joint venture, will be a critical care unit (fully equipped to handle medical emergencies).
For Wockhardt Hospitals, this is new territory. Until a few months ago, the company facilities were typically large (upward of 100 beds) and offered many specialities. Now, the company has entered the small-hospital space that is dominated by nursing homes. The health care major has two such units in Bangalore, each having about 50 beds.
“Both these facilities were nursing homes that we acquired and converted to critical care units,” says Vishal Bali, CEO, Wockhardt Hospitals. These units now provide the company with geographical spread across locations. Wockhardt plans to invest in more such units around its existing hospitals. “We are creating a contingent of smaller facilities and these will be complementary to the existing larger hospitals,” says Bali.
In essence, Wockhardt and its peers in the industry, such as Fortis Health Care Ltd, Max Health Care, a subsidiary of Max India Ltd, and Apollo Hospitals Enterprise Ltd, are employing a hub-and-spoke strategy, setting up mother hospitals with several specialities that employ the best specialists and have latest advanced equipment, and increasing their reach through smaller facilities that are not that investment intensive for minor emergencies.
“It definitely is a trend and it indicates that larger, organized players are keen to make some headway into a space that has traditionally been fragmented and driven by a single medical professional or a group of medical professionals,” says Wockhardt’s Bali.
Fortis health care, for instance, has forayed into the single-speciality, small-hospital space recently with the launch of its first ‘La Femme’—a 50-bed boutique hospital for women offering obstetrics, gynaecology, neonatal care and even cosmetic surgery. “This is a space where we see an opportunity to bring high-quality care to a very niche segment,” says Harpal Singh, executive chairman, Fortis. Max health care, a subsidiary of Max India, also has two small hospitals—a 25-bed facility at New Delhi and a 40-bed one at Noida. Both offer a few in-patient services, such as surgeries in somespecialities and maternity services. Apollo Hospitals is also setting up a network of smaller hospitals to support its flagship hospitals in big cities such as Chennai, Hyderabad, New Delhi and Ahmedabad. Apollo also has four ‘The Cradle’ units, which are ‘boutique birthing’ concept hospitals. The company plans to set up 10 to 12 more such centres over the next 18 months.
One reason for the trend catching up is that these units are cost-efficient. “The set up cost per bed in India is increasing at an alarming rate, reducing the feasibility of setting up large capital intensive hospitals from the ground up. In such a scenario, the mid- to small-size hospitals and clinics play a vital part in the healthcare ecosystem,” says Shobana Kamineni, executive director of the Apollo Hospitals Group.
While investment into smaller facilities give health care providers widespread reach at a lower cost, a bigger benefit may be improvement in the standard of health care delivery. Currently, nursing homes or small hospitals account for more than 75% of the country’s private health care delivery, according to industry estimates. “Given that there are no set standards that this segment of the industry has to adhere to, the quality of service varies widely,” says Bali. “The entry of organized players with established and institutionalized practices into this space can go a long way in raising the bar of health care delivery in small hospitals,” he adds.
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First Published: Wed, Apr 25 2007. 12 38 AM IST
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