HEALTHCARE AND HOSPITAL INDUSTRY Healthcare industry is a wide and intensive form of services which are related to well

being of human beings. Health care is the social sector and it is provided at State level with the help of Central Government. Health care industry covers hospitals, health insurances, medical software, health equipments and pharmacy in it.

Right from the time of Ramayana and Mahabharata, health care was there but with time, Health care sector has changed substantially. With improvement in Medical Science and technology it has gone through considerable change and improved a lot.

The major inputs of health care industries are as listed below: I. II III. Hospitals Medical insurance Medical software

IV. Health equipments

Health care service is the combination of tangible and intangible aspect with the intangible aspect dominating the intangible aspect. In fact it can be said to be completely intangible, in that, the services (consultancy) offered by the doctor are completely intangible. The tangible things could include the bed, the dcor, etc. Efforts made by hospitals to tangiblize the service offering would be discussed in details in the unique characteristics part of the report.

Different types of health care services available in India

Hospitals Pathology Clinics Blood Banks Meditation Centres Emergency services like Ambulances, etc. Online Medical Services Telemedicine Naturopathy Yoga Centres Fitness Centres Laughter Clubs Health Spas

In the Constitution of India, health is a state subject. Central govts intervention to assist the state govt is needed in the areas of control and eradication of major communicable & noncommunicable diseases, policy formulation, international health, medical & para-medical education along with regulatory measures, drug control and prevention of food adulteration, besides activities concerning the containment of population growth including safe

motherhood, child survival and immunization Program. The plan outlay for central sector health programme in the Annual Plans 1997-98 is Rs.920.20 crore including a foreign aid component of Rs.400 Crore. A major portion of outlay is for the control and eradication of diseases like malaria, , blindness being implemented under Centrally sponsored schemes. Another major component of the central sector health programme is purely Central schemes through which financial assistance is given to institutions engaged in various health related

activities. These

institutions are responsible for contribution in the field of control of

communicable & non-communicable diseases, medical education, training, research and parent -care. In our project our focus has been the hospital sector which is the major component of the healthcare industry.

The Hospital Industry

Some Facts

The Indian hospital industry would be worth USD 280 billion by 2020 as against USD 59.5 billion in 2010. Its estimated revenue is USD 30 billion in 2010. During 2010-2015 the Indian hospital service industry is projected to grow at a CAGR of more than 9%. Medical tourism in India is growing at a CAGR of over 27 per cent during 2009-2012. Medical tourism market is valued to be worth USD 310 million and is expected to generate USD 2.4 billion by 2012. Hospitals and Diagnostic centres have received FDI worth USD 786. 14 million between April 2000 and April 2010. 1 per cent of Indias GDP is spend on health, whereas France spends 10.4 per cent and Japan spends 8 per cent. According to 2001 population norms, there is still a shortage of 4,477 primary healthcare centres and 2,337 community healthcare centres. India would require 1.75 million beds by 2025. Over 6800 more hospitals are needed in India to provide basic health facilities to people in rural areas. The various hospitality brands have started aggressive expansion in the country. Some of the companies that are planning to expand include Anil Ambanis Reliance Health, Hindujas, Sahara Group, Apollo Tyres and Panacea Group. There is a shortage of 350,000 nurses in India, partly because many qualified nurses leave for better prospects abroad.

India needs double the number of doctors from 0.7 million to 1.5 million and triple the number of nurses from 0.8 million to 2.5 million. The nurse-doctor ratio in India is 1.5:1compared to 3:1 in developed countries. During the last five years rural health sector has been added with 15,000 health sub-centres and 28,000 nurses and midwives.

INDUSTRY OVERVIEW The Healthcare delivery market in India pegged at around US$ 59.5 billion in 2010

While globally healthcare is typically provided through a largely government-funded public system, the Indian healthcare industry is dominated by the private sector India has ~17% of the world's population, but one of the poorest healthcare infrastructures among growing economies and the lowest spend on healthcare (~5% of GDP) Demographic changes, improving income levels, changing lifestyles, and rising insurance penetration etc will result in a rise in discretionary spending on healthcare Accessible, reliable and affordable healthcare continues to be a challenge Opportunity in healthcare being significantly leveraged by private healthcare providers Expected to employ 9 million people by 2012

Source: Frost & Sullivan

Indian Healthcare Delivary

Healthcare expenditure as % of GDP of India is very low as compared with other countries

India has insufficient facillities to provide healthcare services

India has huge population and less number of hospitals which resulted in lack of beds for providing healthcare services to patients

Current Status Of Global Healthcare

There is a wide discrepancy in the world with regards to the amount of health expenditures both relative to GDP and in absolute terms

Source: The World Pharmaceutical Markets Fact Book 2009 from EspicomBusiness Intelligence; CIA World Factbook

Lifestyle Changes Driving Diseases Which Require Hospitalisation

India: Potential to Become the Global Healthcare Destination

Overvie

Overview:
Medical value travel is one of the most lucrative segments of the healthcare sector and is expected to grow into a US$ 1.5 billion industry by 2012 Potential to contribute US$ 1.2 2.4 billion additional revenue for up-market tertiary care hospitals by 2012, and will account for 3 5% of total healthcare market

Cost of Import Procedures:

Key Drivers For The Growth:

Quality healthcare at fraction of the cost Availability of skilled doctors & hospitals Good reputation of Indian doctors overseas Upsurge of lifestyle diseases

Issues:
Inadequate healthcare infrastructure Unstructured medico legal jurisdiction Indians hospitals standards below par against the global benchmarks of care Lack of accredited hospitals and follow up care

Health Insurance
Growing Share Of Urban Middle Class Households:

Source:CRISIL

One of the fastest growing free economy Ranked 4th largest economy in the world in terms of purchasing power parity Higher service mix, increasing urbanization

Health Insurance Market Size (US$ mn):

Overall penetration at 2%. Growth driven by: a) increasing awareness,

b) soaring healthcare costs and c) demographic profile of the people.

Company Overview Hospital Business

The Fortis Edifice..
Vision : To create a world-class integrated healthcare delivery system in
India, entailing the finest medical skills combined with compassionate patient care

Fortis Healthcare: The first decade of growth

Incorporated

in 1996, Fortis is second largest healthcare chain in India built on a focused organic and inorganic strategy
68* 31 20

healthcare delivery facilities

operating hospitals, satellite and heart command centers and

 17

hospitals under development on Indian stock exchanges with a market capitalization of c.USD1.0 bn (October

Listed

2011)
International

and Nationally accredited facilities by JCI, NABH, NABL along with quality certifications by ISO Standards 9001 / 14001
Acquired

10 hospitals from Wockhardt Hospitals in 2009 and gained pan India presence and had acquired a ~25.3% stake in Parkway Holdings (Southeast Asias leading healthcare service provider with a network of 20** hospitals with more than 3,400 beds throughout Asia) and has chosen to exit considering higher valuations

Key Differentiators Success Drivers

Organisational Chart
* The business is bifurcated into three regions headed by Regional Directors (RDs) for respective regions. * The business is bifurcated into three regions headed by Regional Directors (RDs) for respective regions .

Deep Pan India Presence

Growth strategy
Focused and Aggressive Growth Strategy :

Flexible approach to expansion through Green Field, Brown Field, O&M agreements, Asset Light model and Public Private Partnerships (PPP) Replicate its North India model to establish a network of super-specialty Centers of Excellence and multispecialty hospitals delivering quality healthcare, to all regions Reinforce presence _ in already present regions Execution capabilities Greenfield projects, M&A deals, Integration and turnaround

Improving Operational Performance :

Maximize efficiency through strategies such as common procurement unit for medical equipments and supplies Improve occupancy rates by expanding its reach and increasing community outreach programs to gain market share Increase its average income per bed in use by focusing on high-end healthcare services, reducing the average length of stay of in-patients Supply Chain Management, Shared Service Centers FOS, MOS.

Leveraging People and Technology:

Attract and retain clinical staff with reputations for clinical excellence in their communities Training and skill enhancement programs Adopting latest medical equipment and technology Focusing on evolving a robust IT platform for seamless integration of information Motivated, Trained and Engaged Staff: Service Excellence, Academics & Research, HR Processes.

Focus on ARPOB

Driving Efficiencies