INFRASTRUCTURE - HEALTHCARE SEL 60 July-August 2013 Injecting Growth The impending growth of healthcare infrastructure across the country has multifarious connotations for the electrical and lighting industry T HESE ARE EXCITING TIMES. Medical tourism is booming and hospitals are aggressively pursuing expansion plans. They are seeking out energy-efficient and health enhancing solutions in lighting as well as other electrical products. Design and lighting play a major role in enhancing well-being and a healthy environment within healthcare establishments, be they hospitals, clinics or path labs. Further the aesthetics help them attract patients, especially the international ones. Setting up of new healthcare infrastructure will definitely boost sales of manufacturers of lighting, switchgear, cable, wiring accessories and related electrical equipment suppliers. As majors like Apollo and Fortis expand their network in tier II and tier III cities, their need for automated building management solutions that enable remote monitoring of functions like lighting, security, surveillance, plumbing, access, etc becomes all the more important. This provides yet another business opportunity for providers of innovative solutions customised for healthcare institutions. Current State According to a report by Business Monitor International (BMI), size of the Indian healthcare market was valued at $79 billion in 2012 and is expected to reach $160 billion by 2017. The healthcare sector is expected to grow at about 15% year- on-year (y-o-y). The hospital segment constitutes around 70% of the total healthcare industry, and is growing at a CAGR of 20%, as per Assocham. However, a CII Technopak report concedes that healthcare infrastructure in India is quite inadequate compared to global standards. As per ‘Indian Hospital Services Market Outlook’ by RNCOS Industry Research Solutions, India needs to cover a cumulative deficit of around three million hospital beds to match the global average of three beds per 1,000 population. Fortis Healthcare (12,000 beds), Apollo Hospitals (7,946 beds), Manipal Group of Hospitals (4,400 beds), Aravind Eye Hospitals (3,649 beds), CARE Hospitals (1,912 beds) and Max Hospitals (1,800 beds) are the major private players operating in the Indian hospital industry. Medical Tourism A Renub Research report titled ‘Asia Medical Tourism Analysis and Forecast to 2015’ states, “India was one of the first countries to recognise the potential of medical tourism. From 2009 to 2011, the number of medical tourists in India grew by 30%. It is estimated that by 2015, India will receive nearly half a million medical tourists annually.” According to the report, the trio of Thailand, India and Singapore would control more than 80% market share in 2015. India Brand Equity Foundation (IBEF) New healthcare facilities, like the Fortis Memorial Research Institute in Gurgaon, will likely be certified green spaces of the highest rating
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INFRASTRUCTURE - HEALTHCARE
SEL 60 July-August 2013
Injecting GrowthThe impending growth of healthcare infrastructure across the country has multifarious connotations for the electrical and lighting industry
THESE ARE EXCITING TIMES. Medical tourism is booming and hospitals are aggressively
pursuing expansion plans. They are seeking out energy-efficient and health enhancing solutions in lighting as well as other electrical products.
Design and lighting play a major role in enhancing well-being and a healthy environment within healthcare establishments, be they hospitals, clinics or path labs. Further the aesthetics help them attract patients, especially the international ones. Setting up of new healthcare infrastructure will definitely boost sales of manufacturers of lighting, switchgear, cable, wiring accessories and related electrical equipment suppliers.
As majors like Apollo and Fortis expand their network in tier II and tier III cities, their need for automated building management solutions that enable remote monitoring of functions like lighting, security, surveillance, plumbing, access,
etc becomes all the more important. This provides yet another business opportunity for providers of innovative solutions customised for healthcare institutions.
Current StateAccording to a report by Business Monitor International (BMI), size of the Indian healthcare market was valued at $79 billion in 2012 and is expected to reach $160 billion by 2017. The healthcare sector is expected to grow at about 15% year-on-year (y-o-y). The hospital segment constitutes around 70% of the total healthcare industry, and is growing at a CAGR of 20%, as per Assocham.
However, a CII Technopak report concedes that healthcare infrastructure in India is quite inadequate compared to global standards. As per ‘Indian Hospital Services Market Outlook’ by RNCOS Industry Research Solutions, India needs to cover a cumulative deficit of around three million hospital beds to
match the global average of three beds per 1,000 population.
Fortis Healthcare (12,000 beds), Apollo Hospitals (7,946 beds), Manipal Group of Hospitals (4,400 beds), Aravind Eye Hospitals (3,649 beds), CARE Hospitals (1,912 beds) and Max Hospitals (1,800 beds) are the major private players operating in the Indian hospital industry.
Medical TourismA Renub Research report titled ‘Asia Medical Tourism Analysis and Forecast to 2015’ states, “India was one of the first countries to recognise the potential of medical tourism. From 2009 to 2011, the number of medical tourists in India grew by 30%. It is estimated that by 2015, India will receive nearly half a million medical tourists annually.” According to the report, the trio of Thailand, India and Singapore would control more than 80% market share in 2015.
India Brand Equity Foundation (IBEF)
New healthcare facilities, like the Fortis Memorial Research Institute in Gurgaon, will likely be certified green spaces of the highest rating
SEL 61July-August 2013
INFRASTRUCTURE - HEALTHCARE
estimates that the medical tourism industry, growing at around 18%, would increase two-fold to $2 billion by 2015, from its current level of $1 billion. India has witnessed an influx of patients from Africa, CIS, Gulf and SAARC nations, who come with organ transplant, orthopedic, cardiac and oncology problems.
The inflow of medical tourists has increased by 23%, with Chennai emerging as the favourite destination. The reasons attributed for the same are a higher concentration of super-specialty hospitals with better infrastructure and greater average bed size as compared to other zones. A study by CII further points out that the city attracts about 40% of the country’s medical tourists.
Business Models The Indian hospital industry operates on two popular business models, viz hub and spoke, and operating maintenance contracts. Under the hub and spoke model, a super specialty hospital (hub) is established in a major city of a region, with smaller multi-specialty hospitals or day care centers in neighbouring towns. Apollo Reach hospitals and Vasan eye care clinics operate on this model.
In the second case, a corporate chain (like Fortis or Apollo) takes over the management control of a hospital owned by a trust. In return, the trust gets a fixed annual management fee or a share of the revenue.
Growth Trends ‘Bridging the Divide for a Healthy India’, a report jointly published by Grant Thornton and CII, notes that north India is witnessing proliferation of specialty hospitals and healthcare centers. The report explains, “Leveraging improved technology and infrastructure of medical institutions, northern India is witnessing a steady rise in medical tourism. A number of regions including Delhi-NCR, Chandigarh, Amritsar, Mohali and surrounding areas have been attracting patients from abroad.” Major players viz Fortis, Apollo, Medanta and Metropolis have invested in the region. The report further pointed out, “Eye care, dental care, maternity, pediatrics, orthopedic surgery, pathology, low-end imaging, etc are areas in which we expect to see significant
transaction activity in 2013 and beyond.”Vikas Chhabra (vikas.chhabra@paras
hospitals.com), general manager, sales & marketing at Paras Hospitals, Gurgaon echoed the same. He said, “Northern region has shown a remarkable growth in terms of beds against number of patients.” Dr Anil Gupta ([email protected]), director at Shree Ganesh Eye Hospital based at Raipur, Chattishgarh, said, “Apart from the northern region, maximum growth is seen in mini-metros (tier II and tier III cities) like Lucknow, Kanpur, Nagpur, Raipur, Panchkula etc.”
Speaking at the CII Conference on ‘Transforming Healthcare in Northern
Region: Agenda for Action’, Dr A K Shiva Kumar, member, National Advisory Committee, Government of India, called for greater private participation to complement government’s initiatives. He said, “India has a huge population, and one single agency cannot transform the entire healthcare in the country. Public private partnership is the only way forward.”
ExpansionsSanjay K Randhar, president of IndiaVenture Advisors Pvt Ltd, estimated the cost of setting up super-specialty units at `50 lakh to `1 crore per bed in tier-I cities. The cost would vary
New Healthcare Delivery ModelsHealthcare Cities• One-stop shop which offers healthcare services including wellness, education
and training. • Due to large land requirement, these are often set-up in outskirts of a city.
Attracting patients is a challenge. • Nine health cities being planned in India at an investment of $2.3 billion (eg
Medanta Medicity, Gurgaon).
Day Care Surgery• These are units that conduct procedures and patients are discharged on the
same day and not hospitalised• Helps hospital chains in freeing up capacity at tertiary hospitals while
retaining patients within the network• Require lower capex, making break-even periods shorter
Senior Living Hospitals• An institution where aged people can reside after their working life• Offer medical facilities, options of entertainment such as libraries and TV
rooms, and encourage members to live a healthy community life with regular exercise, meditation and healthy food (eg Max Venture’s new initiative Antara in Dehradun)
Mobile Healthcare• Four wheeler unit comprising of paramedical staff and a trained doctor who
address minor diseases and gives primary diagnosis• Diagnostic as well as surgical mobile van, also prevalent in metros
CHHABRA: Energy saving solutions are important for us
GUPTA: We seek technologies that increase patient comfort
(Sou
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Adv
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SEL 62 July-August 2013
between `30 lakh and `50 lakh in tier-II and tier-III cities.
What’s in StoreIn addition to the materials that are used for electrical installations in buildings, almost all the healthcare chains are also looking for upgradation of technologies. At the recently concluded ‘2nd Annual Hospital Expansion Summit’ in New Delhi organised by Noppen, speakers deliberated upon how design, renovation and other technological applications including implementation of the digital touch can benefit hospitals.
Speaking at the conference, Ravi Kumar Dhulipala, head–strategic market at Ingersoll Rand India, explained the role of HVAC systems in reducing hospital infections. Citing examples of situation
prevailing in the US, he said, “One out of 22 patients coming to a hospital acquires secondary infection, with airborne infection affecting 9% of the population. ICUs contribute to more than half of the infections. With ICUs accounting for 65% of energy bills, energy-efficient HVAC systems can not only help reduce cost, but also reduce energy consumption of the hospital.”
In India, more and more hospital chains are concentrating on maintaining energy-efficiency and are shifting towards green building design. The newly built Fortis Memorial Research Institute (FMRI) in Gurgaon, at a cost of `480 crore, exemplifies the same. It has been recognised as a green building and has been awarded Four Star rating by TERI GRIHA. Optimisation of building
design, use of low emissivity glass for the building envelope, deployment of solar energy for lighting and hot water, and use of highly energy-efficient fixtures and equipment managed centrally by a building management system, ensure energy conservation.
Daljit Singh, president, Fortis Healthcare Ltd said, “Right at inception, we took a conscious call to weave ‘green building’ principles into the design of the FMRI project.” Chabbra of Paras Hospital shared, “We are also planning to implement building management systems very soon.” These initiatives, besides helping hospital chains reduce cost, also build a brand. It is expected that soon all major players would be leading a drive towards energy-efficiency and green buildings. n
Mrinmoy Dey
Organisation Investment Span Plan
Apollo `2,250 crore Next 3 years · Capacity addition in Chennai & Bengaluru, and Kolkata (200 beds)· New hospital in Mumbai, Visakhapatnam and Indore· New ‘Reach Hospital' in Tiruchy (Tamil Nadu), Nellore (Andhra Pradesh) and Nasik
(Maharashtra)· Adding 1,500 beds in eastern & north-eastern India in next 5 years· 4 new hospitals in Kolkata, Patna, Raipur, Guwahati
Fortis Plans to raise `540 crore from IFC & World Bank
Next 3-5 years · To start 4 hospitals including one in Himachal Pradesh· Increase operational beds in tier-II & III cities· Add 850 beds over next 12 months· Add 450 beds in newly built FMRI, Gurgaon, and 400 beds in greenfield hospitals in
Ludhiana & Chennai
Manipal Raising `540 crore from IVFA
· Increase bed capacity in Bengaluru, Mangalore, Goa· Establish greenfield multi-specialty hospitals in Pune, Hyderabad & Bhubaneswar by 2014
Wockhardt Hospitals -- Next 2 years · Set up new 350 bed super-specialty hospital in South Mumbai, to be operational in next 2-3 months
· Establish new 300 bed super-specialty hospital in Delhi to be completed by 2015
QRG Healthcare `1,000 crore Next 5 years · To reach a target of 1,200 beds in 5 years· Focus mainly on north India, particularly cities in and around NCR along with Ludhiana,
Agra, Jaipur, among others· A 450-bed super-specialty facility in Faridabad, called QRG Health City, to be
commissioned by September
Healthspring `60 crore By end of 2014 · Set up centres in Delhi, Hyderabad, Bengaluru
Glocal Healthcare `400 crore In operation by 2014
· Set up 50 new units across 6 states – West Bengal, UP, Bihar, Chattishgarh, Jharkhand, Odisha
· All these units will mainly cater to tier-III cities & rural areas· Each hospital will have 100 beds built on 15,000 sft with G+6 structure
Paras Hospitals -- Next 2 years · New 100 bed hospital in Darbhanga (Bihar)· A few more hospitals having over 500 beds are planned to be set up
Rockland Hospitals · Open 505-bed multi-specialty hospital in Manesar, Haryana· Open 500-bed hospital in Greater Noida, UP
Ganesh Eye Hospitals
· Super-specialty eye hospital in Raipur, Chattishgarh within 1 year· Plans to open satellite hospitals in few more districts
Government Establish 6 super-specialty tertiary care hospitals with research & education centres
the bacteria and destroying it• ApprovedbyBTS(BiotechTestingServices)inIndia,COFRACinFrance• Aimedathygiene-consciousindustries–pharma,agro&foods,labs,healthcareetc
Industry Perspective Lighting “Indiabeingacentreformedicaltourism,allprivatehospitalsaregearinguptoprovidethebestof facilitiestotheircustomers.Lightinggivesfirstimpressiontothepatients/clientsandhelpsthemtakeadecisiontooptfortreatmentinthatparticularcentre.
“In addition to traditional and customised lighting products, major hospital chains are investing in energy saving LED-based lighting solutions especially for corridor lighting. With internationalpatientsvisitingthesehospitals,corridorandreception lightingmatchesthatof high-endhotels.”
“ManyIndianhealthcarefacilitiesaredealingwithageinginfrastructuresthatneedtobemodernisedso as tomeet new demands. Further, rapid expansionwould increase demand of such products.Eaton’selectricalsolutionsenablethesefacilitiestomeetmodernexpectations,aswellasmaintainahighstandardof reliability,becausehealthcarefacilitiessimplycannotaffordinterruptionsinpower.However,thepenetrationof lightingcontrolshasremainedlowinIndianhospitals.”
Sushil Virmani, sales director, electrical sector, South Asia, Eaton
Wiring Accessories“There is always an inherent demand of advanced hygiene measures in the healthcare industry.This increases the scope for innovative products like Myrius anti-bacterial switches. The marketforantibacterialswitchesinIndiaisnichebecauseitisstillanewconcept.Astheawarenessof thisproductgrows,itspenetrationinthetargetedgroupwouldalsoincrease.Itisexpectedtogrowatafastpaceinthecomingyears.”
