Health

Is everything well with India’s corporate hospital industry health?

Post-liberalization, India’s health industry has been among a few sectors that boomed impressively and produced many private players. From Max to Medanta and from Apollo to Fortis, multiple hospital chains have emerged to stand in competition with foreign players. By early 2010s, we were on the verge of becoming the world leader.

Now, almost a decade later, we are seeing hospitals going into foreign hands. In 2018, Fortis hospital chain was acquired by the American investment company TPG Capital for over ₹ 4,000 crore. Next year (2019) also witnessed one of India’s largest hospital chains, Max Healthcare going into the hands of a foreign company’s lap when it sold a majority of its stake to KKR-backed Radiant Life. The financial struggle of Seven Hills Hospitals is no more a secret.

The question that frets many market experts is how well-established Indian corporate healthcare players are unable to hold their forts, despite a huge demand for healthcare in the country. In the financial year 2018-19, the total value of the hospitality industry’s mergers and acquisitions in India was ₹ 7,615 crore, posting a record climb of 155 per cent.

The root of the problem

Without a doubt, the Indian healthcare sector is in a sorry state. Hospitals are not able to make profits as it used to do so a few years back due to various regulations on the prices of knee implantation, cancer drugs, etc., which give enormous margin. Government schemes such as Ayushman Bharat, Central Government Health Scheme (CGHS), and Employees’ State Insurance (ESI) have been instrumental in impacting hospitals’ profits to a great extent.

While the government’s initiatives are for the greater good of the citizens, what the policy-makers need to understand is the importance of hospitals’ financial wellness. The country is already struggling with the people per hospital bed at less than one every 1000, well below the WHO benchmark of 3.5. When hospitals fail to make money and attract investments, it becomes difficult for them to even survive.

Andrew s

Andrew has been in the online publishing industry. After receiving his degree in professional journalism from the Indian Institute of Journalism and New Media, he contributed to multiple websites as a freelance writer and feature editor. Mostly, Andrew tackles controversies and theories that lead to a specific conclusion that either debunk or justify a particular claim. Further, Andrew participates in social developments that aim to simplify every individual's way of life and fight for peace. He is the new Editor-in-Chief of Pressroom Today.

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