New Delhi: Indian health-care providers will increasingly move towards specialized offerings with delivery models centred around rehabilitation, assisted living, day-care surgery, general health, medical malls, and focused services aimed at market segments such as childcare or pregnancy, a consulting firm has predicted.
Such delivery models have the potential to earn revenues of $50 billion (almost Rs2 trillion) by 2017, up from some $20 billion, equivalent to about 57% of the total health-care revenues today, Technopak Advisors Pvt. Ltd has said in its second report on the health-care sector.
Such specialist set-ups will evolve as occupancy at the bigger hospitals goes up, an expert said. “As hospital beds fill up and health insurance penetration increases, there will be a need to reduce hospital stays,” said Pervez Ahmad, executive director, Max Healthcare, a unit of Max India Ltd.
Hospitals have not kept pace with advances in medical treatment technologies leaving consumers with a bunch of scattered health-care facilities not necessarily suited for treating different ailments and conditions, Technopak said in the report.
One of the formats identified by Technopak that is catching on faster than any other is “retail health care”, where physician, pharmacy and sometimes even diagnostic services are provided under the same roof in a relatively small setting. With a market size estimated at $16.16 billion, of which the organized sector today accounts for just 1%, this segment will more than double to $36.3 billion. The business has already attracted several players. Apollo Clinics, part of India’s biggest health-care chain Apollo Hospitals Enterprise Ltd, a chain of clinics opened by Manipal Cure and Care, and Fortis Healthcare Ltd’s HealthWorld outlets have begun to follow this model in the last few years.
Rana Mehta, author of the Technopak report and vice- president of the health-care practice at the firm, predicted that retailers and health-care providers will come together to set up such clinics inside malls as “it is a win-win paradigm”. Retailers will get more customers visiting malls, health-care providers have access to a large group of customers, and consumers will have accessible health-care services in their neighbourhoods, he said.
“We are going to ramp up our network from 55 Apollo Clinics to 250 in a little over three years. These clinics, with 15-20 disciplines, will be very reasonably priced and profitability will be driven by volumes,” said Ratan Jalan, chief executive of Apollo Health and Lifestyle Ltd.
Even Max Healthcare, which had entered the segment with Dr Max clinics six years back, only to roll it back in the face of poor customer response, is considering a re-entry, said Ahmad.
Day-care surgery centres is another concept, Technopak said, that can save patients a considerable sum of money besides the inconvenience of a hospital stay and risk of contracting infections at hospitals. The hospital chains gain by utilizing high-cost infrastructure better through high-volume and low-risk surgeries.
Typically, in other parts in the world, eye, ear, nose and throat procedures or cosmetic and minor gynaecological surgeries are carried out in day-care surgery centres. With the market potential tripling to $6 billion in 2017, this is a format firmly on the radar of the companies. Apollo plans a day-care surgery centre, said Jalan, while Artemis Health Sciences and Max are also looking at more surgeries in the outpatient setting but within the hospital.
Apollo’s women’s health and maternity care centre, Cradle, and Fortis Healthcare La Femme are part of the “boutique hospital” segment, which Technopak predicted will swell from $463 million in 2007 to $1.87 billion in 2017. “A lot of hospitals in Goa and southern India are setting up boutique hospitals to cater to health tourists,” said Mehta.
Apollo’s Jalan said boutique hospitals would make procedures such as childbirth easy. “A pregnant woman needs best quality health care but not in intimidating environment of a hospital. Our Cradle centres, which marry ambience with clinical competence, are doing extremely well and we are going to have at least 20 of them in three years,” he said.
The report also envisions stand-alone rehabilitation centres that will provide restorative services to people with functional inability due to neurological, orthopaedic, cardiac, oncology, pulmonary, diabetic or pain-related disabilities. The market potential: $750 million right away and $3 billion in 2017. Ahmad said Max is studying the financial viability of such stand-alone rehabilitation centres, with others likely to follow suit.
The models are likely to have robust demand, but Technopak’s Mehta sounded a note of caution on the paucity of trained manpower and rising costs of real estate which could seriously crimp growth.