Pre-feasibility Report

On
Multi Speciality Hospital (200 Bed)

April 2008

Cygnus Business Consulting & Research

4th & 5th Floors, Astral Heights, Road No. 1, Banjara Hills, Hyderabad-500034, India
Tel: +91-40-23430202-07, Fax: +91-40-23430201/ 208, E-mail: info@cygnusindia.com
Website: www.cygnusindia.com

Disclaimer: All information contained in this report has been obtained from sources believed to be accurate by Cygnus Business Consulting &
Research (Cygnus). While reasonable care has been taken in its preparation, Cygnus makes no representation or warranty, express or implied, as to
the accuracy, timeliness or completeness of any such information. The information contained herein may be changed without notice. All information
should be considered
Page 1 ofsolely
6 as statements of opinion and Cygnus will not be liable for any loss incurred by users from any use of the publication or
contents
 PREFACE

The growth in the healthcare services in the country is driven by the 350-
million strong middle class aspiring for quality health care services and
increased international confidence on India as a potential, high quality &
low cost medical tourism destination. According to the WHO report, India
needs to add 80,000 hospital beds each year for the next five years to
meet the demands of its growing population.

High quality talent pool, proven track record, favourable government

policies, ability to deliver healthcare services at low cost and high quality
infrastructure has put India into global map for outsourcing various
healthcare related services. This has been further intensified by
Government of India’s recent budget declarations, where enough
emphasis has been given on setting up of healthcare delivery
infrastructure mainly in Tier – I & Tire – II cities. In view of the above,
Indian healthcare delivery Industry is upbeat about the future of hospitals
in the country.

This report is structured into 5 chapters consisting of Executive Summary,

Project Concept, Industry Analysis, Project Details and Conclusion. This
report provides an overview of Indian healthcare industry structure,
market information and growth drivers. It also gives insight into the
procedure for setting up a hospital, type of machinery & floors space
required, requirement of permissions & clearances, capital outlay,
profitability, payback period, internal rate of return and other project
related analysis.

This report will be useful to entrepreneurs/ businessmen interested in

setting up hospitals, banks offering healthcare products, management
consultants, hospital administration & management students etc.

No of Pages: 80 No of Figures: 15 No of Tables: 23

Page 2 of 6
 CONTENTS

1 Executive Summary
2 Project Concept
3 Industry Analysis
3.1 Overview of Indian Healthcare Industry
3.2 Industry Structure & Segmentation
3.2.1 Classification of Hospitals based on Objective
¾ General Hospital
¾ Speciality & Super speciality Hospital
¾ Teaching cum Research Hospital
3.2.2 Classification of Hospital Based on Ownership
¾ Government Hospital
• Primary Healthcare
• District Hospitals
• General Hospitals & Medical Colleges
¾ Semi-government Hospital
¾ Voluntary Agency Hospital
¾ Private & Charitable Hospital
• Corporate Hospitals
• General Hospitals
• Speciality Hospitals
• Rehabilitation Centres
• Nursing Homes
• Private Clinic
• Diagnostic Centres
Pre-feasiability Report on Multi Speciality Hospital (200 Bed)

• Charitable Hospitals
o Not for Profit Hospitals
o Free hospitals
3.2.3 Classification Based on System of Medicine
¾ Allopath
¾ Ayurvedic
¾ Unani
¾ Homeopathic
3.3 Market Size & Growth Rate
3.4 Growth Drivers
3.4.1 Medical Tourism
3.4.2 Medical Information & Telemedicine
3.4.3 Outsourcing
3.4.4 Enhancement in Planned Layout & Public Expenditure
3.4.5 Increasing Health Awareness
3.4.6 Medical Insurance
4 Project Details
4.1 Steps involved in setting up a hospital
4.2 Technical Aspects
4.2.1 Locational Details
4.2.2 Floor Planning
4.2.3 Permissions & Clearances
4.2.4 List of Major Machinery & Utility
4.2.5 List of major Suppliers
4.2.6 Project Implementation Schedule
4.3 Management & Commercial Details

3 © Cygnus Business Consulting & Research 2008

 4.3.1 Brief Introduction About Hospital Management
4.3.2 Requirement of Manpower
4.3.3 Marketing & Promotional planning
4.3.4 Advice / Tips on mobilising loan from bank
4.4 Financial Details
4.4.1 Project Cost
4.4.2 Sources of Fund
4.4.3 Moratorium & Repayment Period
4.4.4 Revenue & Profitability Projection
4.4.5 Working Capital Requirement
4.4.6 Break Even Point & Internal Rate of Return
4.4.7 Balance Sheet Analysis
4.4.8 Ratio Analysis (Current Ratio, D/E)
4.4.9 Sensitivity Analysis
5 Conclusion
Annexure- 1: Bibliography
Annexure- 2: Details of Project Cost
Annexure- 3: Financing Pattern
Annexure- 4: Loan Repayment Schedule & Interest Calculation
Annexure- 5: Income Projection
Annexure- 6: Depreciation Schedule
Annexure- 7: Working Capital
Annexure- 8: Manpower cost
Annexure- 9: Operating Cost
Annexure- 10: Projected P & L Statement
Annexure- 11: Projected Balance Sheet
Annexure- 12: Cash Flow Statement & IRR
Pre-feasiability Report on Multi Speciality Hospital (200 Bed)

Annexure- 13: DSCR in the base Case

Annexure- 14: Ratio Analysis
Annexure- 15: Sensitivity Analysis

4 © Cygnus Business Consulting & Research 2008

 LIST OF TABLES

Table 1.1: Project at a Glance

Table 3.1: Total Number of Hospitals in India, 2007
Table 3.2: Indian hospital statistics (2005)
Table 3.3: Public healthcare physical infrastructure (2004)
Table 4.1: Major Hospitals in Hyderabad
Table 4.2: Floor Planning
Table 4.3: Details of major service offerings
Table 4.4: List of Permissions & Clearances
Table 4.5: List of Major Machinery
Table 4.6: List of Utility
Table 4.7: Manpower Requirement
Table 4.8: Cost of the Project
Table 4.9: Financing pattern
Table 4.10: Tentative Loan Disbursement Schedule
Table 4.11: Calculation of average bed charges
Pre-feasiability Report on Multi Speciality Hospital (200 Bed)

Table 4.12: Schedule of Income

Table 4.13: Estimated Manpower & Cost
Table 4.14: Revenue & Profitability Projection
Table 4.15: Level of Capacity utilization
Table 4.16: Working Capital Calculation
Table 4.17: Break even point
Table 4.18: Ratio Analysis
Table 4.19: DSCR in different scenarios

5 © Cygnus Business Consulting & Research 2008

 LIST OF FIGURES

Figure 3.1: Health Care Industry Structure

Figure 3.2: Structure of Hospital Industry
Figure 3.3: Indian Healthcare market size
Figure 3.4: Pattern of health care expenditure
Figure 3.5: Expenditure on healthcare (2005-06)
Figure 4.1: MRI Machine
Figure 4.2: CT Scanner
Figure 4.3: Colour Doppler
Figure 4.4: Mammograph
Figure 4.5: Bone Densitometer
Figure 4.6: Hemodialysis Machin
Figure 4.7: Gamma Camera
Figure 4.8: LINAC System
Figure 4.9: Brachytherapy
Pre-feasiability Report on Multi Speciality Hospital (200 Bed)

Table 4.10: Revenue Model & Income Calculation

6 © Cygnus Business Consulting & Research 2008