The Indian healthcare market is characterised by a vast and persistent gap between supply and demand. Over the past decade, a number of hospitals have been opened across the country in an attempt to bridge this gap. Many of these ventures have been successful in addressing the needs of the patients and in rewarding investors with healthy returns. However, failures have also been plentiful. Numerous hospitals have failed to achieve profitability, showing that despite the enormous opportunity, success is not guaranteed in the Indian healthcare sector.
If healthcare leaders are to invest in new hospital ventures with confidence, it is important that they are aware of the common pitfalls related to setting-up new hospitals. Furthermore, by conducting thorough strategic and financial assessments, they can lay a strong economic foundation which increases the future returns and mitigates the potential risks.
The opportunity for growth in the Indian healthcare market is tremendous
There is an immense need for additional hospitals in India to improve coverage and relieve overcrowding in existing facilities. Today, there are about 1.6 million hospital beds available across the country. To meet the most basic international standards, India should be equipped with at least 3 million more. In this context, the opportunity for Indian and international hospital promoters is substantial. Demand is vast, largely untapped, and continually expanding.
The rapid growth of the Indian population is itself contributing to the increased demand for healthcare, but the rise in consultations and hospitalisations is also driven by increasing affordability, patients’ changing lifestyles and their evolving perceptions of healthcare.
Patients are able to spend an increasing amount of time and money on healthcare thanks to improving income levels, better availability of insurance, and schemes supported by the Government.