Reputed firms, which have until now largely restricted their play to regional markets, are drawing ambitious plans for national roll out and overseas foray while adding new surgeries to their basket of offerings. The market size of short-stay centres, currently pegged at $3 billion, would swell to $12 billion by the end of 2022 by when over 75% of all surgeries would be accounted for by this format, according to Technopak.
By the end of calendar year 2014, Nova Specialty Surgery, a multi-specialty day-care surgery company would at least have built 50 centres across the country, up from 10 at the start of 2012. This would mean an investment in the range of R650 to R700 crore for the company, Suresh Soni, co-founder, Nova Medical Centres, told FE recently. Nova, which straddles across 12 specialties, also spun off its fertility chain into another arm calling it Nova Pulse IVF earlier this year.
The chairman of RG Stone Hospital, a Delhi headquartered chain of 15 super specialty urology and laproscopy centres Bhim Sen Bansal told FE that his company is planning to build footprint across metros in India and is also evaluating overseas markets in Africa and West Asian countries. To penetrate non-metro markets and smaller centres, we have just started offering specialty consultation through mails and phones as well, said Bansal.
Corporates who have so far concentrated mainly on achieving high occupancies in large multi-specialty hospitals are now venturing into new business formats which involve lower in-patient hospital stay, higher bed turnover and lower operational costs and waking up to the need of investing in facilities that are asset-light, low on investment and manpower requirements, and easy to scale up and replicate, said Arvind Singhal, chairman, Technopak.
Day care surgeries can lower healthcare delivery costs by reducing average length of stay and making available hospital beds for higher margin inpatient surgeries. Globally, day care models have shown to lower costs by 15% to 40 %. Potential savings in the Indian context for day care surgeries could fall in the high bracket of over 30 %, Singhal said.
One specialty, where this model has already tasted success is eye care. Seven of Asias leading 10 standalone eye care chains (by the number of clinics in network) are Indian in origin. These include Vasan Eyecare, Dr Agarwals, Sankara Nethralaya, Centre for Sight, Aravind Eye Care, Lotus Eye Care , LV Prasad Institute. Interestingly, barring one, all the eyecare players in the top league are headquartered and have dense concentration in south India.
However, this is changing. While Vasan Eyecare has already built up a network of over 100 clinics across the country, Mahipal Singh Sachdev-promoted Centre for Sight is on an aggressive acquisition spree. In last two months alone, it has acquired two eye care chains Vadodara-based New Vision Laser Centre, a laser vision correction chain with seven centres in Gujarat, Andhra Pradesh and Maharastra, and Chandigarh-based Mirchias Laser Eye Centre along with multiple standalone eye clinics, taking the total number of under its network to 40 today from 28 two months back.
Singhal identifies piquing interest of PE firms and insurance firms as two major drivers of growth in this segment. By virtue of being a low asset and easily replicable format, short-stay medical centres are enticing for PE firms. Investors like Matrix Partners, Sequoia Capital, and Helion Advisors are showing great interest in this formats growth, he said.