New Delhi [India] September 18 : Growing incidence of lifestyle diseases and easing demand for affordable health care delivery are driving the healthcare market in India. A recent report by HSBC Global research on India hospitals says seven listed hospitals will add 14,000 beds in the next 3-5 years. A total of 22,000 new beds is expected, including those by other private hospital chains.
The report says, this is triple the number of beds added between FY19-24 at 4000. Most hospitals are now in a consolidation phase and planning to expand and add sees growth opportunities after making profits between FY19-24 because of low capex.
The report adds that even with these additions, there will be no over-supply of beds. With the growing incidence of lifestyle diseases and rising demand for affordable healthcare services, there will be high demand for hospital beds in India.
As per a World Health Organisation (WHO) report, India has only 16 beds per 10,000 people, which is abysmally low if compared with most of the developed and emerging markets.
Besides the increasing number of ageing population, increased penetration of healthcare insurance, rising income levels, increase in lifestyle diseases and better paying ability, there will be increased healthcare needs.
"We believe there will not be an excess supply issue in India as the demand outlook remains robust, led by demographic changes (an ageing population and rising incidences of lifestyle related diseases), rising insurance penetration, improving income levels, and connectivity (ease of travel to seek medical care). Therefore, we expect new beds to be easily absorbed," said the report
The report adds, India requires 100,000 additional beds in the next 5-7 years just to meet its healthcare demand on the back of increasing non-communicable diseases (NCDs), such as diabetes, cardiac disorders, and cancer.
The seven listed hospitals have announced capex for projects to add over 22,000 beds in the next 3-5 years.
The report also highlights that India remains a preferred medical tourism destination because of the availability of high-end clinical procedures at a much cheaper rate as compared to most of the countries like the U.S., Singapore, Korea and Thailand.
The report quoted ministry of tourism data to say that medical tourism in India has grown for 0.18 million in 2014 to 0.73 million in 2024.
Hospitals in India have seen substantive increase of 7-15 per cent in their earnings in terms of average revenue per occupied bed (ARPOB) between FY2019-24. Most of the hospitals have seen an uptick in occupancy post COVID-19 and now, with operational efficiency and advanced technology, the revenue of hospitals will grow in the mid- to single high digit in years to come.
Listed hospitals in India have seen their share prices rising between 55-200 per cent in the last three years
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