Bangalore Hospital Report

BANGALORE HOSPITAL REPORT
MAY 2010
NORTHBRIDGE CAPITAL
ANALYST: NITI BUTALA PH:912265262307 FAX:912266756249 E MAIL:nitibutala@northbridgeasia.com
TABLE OF CONTENTS
PARTICULARS EXECUTIVE SUMMARY GOVERNMENT POLICY AND TAX BENEFIT DEMAND V/S SUPPLY GAP ANALYSIS DEALS EXPANSION PLANS PROJECTED GROWTH IN THE NUMBER OF BEDS PROFILE OF THE HOSPITAL CHAINS PAGE NO. 3 4 5 13 15 17 18
20
ABOUT NORTH BRIDGE
25
Page Northbridge Capital is an Investment Bank(Category I Merchant Bank) regulated by the SEBI Sebi Registration: INM000011500
EXECUTIVE SUMMARY
Bangalore, the "Silicon Valley of India", officially Bengaluru, is the capital of the Indian state of Karnataka with a population of around 7 million making it a 3 most populous city and 5 most populous urban agglomeration. It is known for its supremacy in the field of Information Technology and is spearheading towards to become a centre of excellence for healthcare mainly because of the influx of a lot of healthcare professionals to Bangalore. Bangalore will be the healthcare hub for the whole of South East Asia in the next five years. The beauty of the health department of Karnataka is that it is one of the few states to privatize primary and secondary healthcare. Karnataka is the first state to have Task Force on Health to enforce changes in healthcare. The cost of treatment in Bangalore hospitals is 1/5 of the cost in Europe and USA. Bangalore is finding a place in the global map for advanced spinal surgery due to the growing number of spinal surgeons in the Bangalore. Every month, Hosmat Hospital attends 2-3 patients - mostly from Malaysia, Sri Lanka, Pakistan, Maldives, Bangladesh and Africa. Rentals in Bangalore have fallen by 30% and this will reduced the expenditure borne by the hospitals. Though Bangalore has hospitals catering to all specialties but it lack burns unit. A private burn centre is required to meet emergencies, which could be a viable option. ICU beds are at times not reachable mostly due to economical reasons. Approximately 60% of the nursing homes are not doing well. Hospital beds are not fully utilised Average occupancy ratio for private hospitals is 70-90%. 75-80% of households prefer to use private sector treatment in Bangalore for minor and major illnesses. With bed strength of 200 beds, the average number of out-patients visiting the hospital/day is about 290, and the number of in-patients admitted/day is 140.
th th rd
3
Page
Northbridge Capital is an Investment Bank(Category I Merchant Bank) regulated by the SEBI Sebi Registration: INM000011500
GOVERNMENT POLICY AND TAX BENEFIT

To encourage investment in the health care sector, government of India has allowed 100% FDI under the automatic route Government has also accorded the infrastructure status to the hospitals and has announced Lower tariffs (between 58 per cent) on medical equipment and devices. In a move that would benefit the corporate hospital chains expanding in urban areas, the government has decided to extend its provision of tax relief to new hospitals with over 100 beds in metros and other urban agglomerations, which had been deprived of such benefits till now. With a view to encouraging investment in hospitals in non-metro areas, the benefit of subsection (11B) of section 80-IB had been extended to hospitals located anywhere in India, other than defined excluded area. Sub-section (11B) of section 80-IB provides for a tax holiday for five consecutive assessment years, beginning from the initial assessment year, to an undertaking deriving profits from the business of operating and maintaining a hospital in a non-metro. The tax relief would also apply to new hospitals with over 100 beds in previously excluded area which includes the urban agglomerations of Greater Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore and Ahmedabad, the districts of Faridabad, Gurgaon, Ghaziabad, Gautam Budh Nagar and Gandhinagar and the city of Secunderabad. Tax benefit is now available to hospitals which are constructed and have started or would start functioning at any time during the period beginning the 1st day of April, 2008 and ending on the 31st day of March, 2013. Customs duty exemption on specific personal medical aids like crutches, wheel-chairs, walking frames and artificial limbs. Customs duty, excise duty and CVD exemption on specific medical devices such as talking books, Braille computer terminals, etc.
Page
DEMAND V/S SUPPLY

DEMAND SCENARIO
Bangalore has the 2 highest literacy rate (83%) and per capita income of Rs. 30,000. So there is better health awareness and willingness to spend on health. Corporate provide medical insurance to their employees. This too has led to a spurt in demand for quality healthcare. With more people buying medical insurance, the average time spent in the hospital has gone up and are also prolonging their post-operative stay in the hospital. All this translates into higher demand for hospital beds. Low-cost treatment is the ultimate factor in Bangalore. Medical care costs only 1/5 of the costs in the West which gave rise to medical tourism. Only 20% of payment is done through insurance so there is a lot of demand to penetrate the insurance market and rest is through direct payment. This has led to 60% of healthcare expenditure being financed out-of-pocket.
th nd
SURGERY COST
U.S.A. $30,000 BANGALORE $6,000
LIVER TRANSPLA -NTATION COST
U.S.A. $2,80,000 BANGALORE $40,000
1. Demand for Specialty hospitals
Multi specialty hospital Heart Surgeries Diabetic Hospital

Page
INPATIENT SPEND
17, 20%
14, 17% CARDIAC CANCER 13, 15% ACCIDENTS INFECTIONS MATERNITY 19, 22%
22, 26%
Growth rate is highest in Cardiac and Cancer and will grow at 14% but very less Cardiac and Cancer centres are there in Bangalore.
2. Demand for number of beds/1000 population Number of beds/1000 population is 2.2 and the world average requirement is 3.96 beds/1000 population but this should increase to 7beds/1000 population with the increasing population and growing healthcare diseases. So approximately 16,000 beds needs to be added in order to reach the ratio of 3.96 beds/1000 population.
3. Demand for Accreditation Apollo and Wockhardt hospitals have received the Joint Commission International (JCI) Accreditation. Hospitals with NABH Accreditation Narayana Hrudayalaya Sagar Hospitals Columbia Asia Medical Centre Manipal Hospital Nethradhama Superspeciality Eye Hospital Applicant Hospitals for NABH Accreditation Wockhardt Hospitals, Nagarabhavi Wockhardt Hospitals, Cunningham Road Sparsh - Hospital For Accidents, Orthopedics & Plastic Surgery Bangalore Institute of Oncology
Hospitals are now planning to go for either JCI or NABH accreditation so as to increase medical tourism. 4. Demand for number of patients Average occupancy ratio for private hospitals is 70-90%. With bed strength of 700 beds, the average number of out-patients visiting the hospital/day is about 1000, and the number of in-patients admitted/day is 420. With bed strength of 200 beds, the average number of out-patients visiting the hospital/day is about 290, and the number of in-patients admitted/day is 140.
Occupancy ratio of 60-70% is good enough to break even. So there is a demand to increase the occupancy ratio which will increase the number of out-patients and in-patients visiting the hospital/day.
SUPPLY SCENARIO
1. Medical Infrastructure
10,000 1.27/1000 POPULATION
NURSES
19,000 2.3/1000 POPULATION
4,000 0.5/1000 POPULATION
BEDS
18,000 2.2/1000 POPULATION
DOCTORS
PHYSICIANS
2. Hospitals based on Ownership There are approximately 320 hospitals within the city and the total number of beds in the city is 18,000 to 23,000 beds. Bangalore has approximately 212 private hospitals.
HOSPITALS IN BANGALORE
20 63 15 Government Hospitals Trust Private Hospitals Nursing Homes 212
3. Private hospitals based on Bed Capacity
BEDS IN BANGALORE PRIVATE HOSPITALS

100 90 80 NO. OF HOSPITALS 70 60 50 40 30 20 10 0 17 53 47 95
Page
< 50 BEDS
50-100 BEDS
100-200 BEDS
> 200 BEDS
4. Hospital Chains
APOLLO
DR. AGARWAL EYE HOSPITAL
WOCKHARDT
HOSPITAL CHAINS IN BANGALORE
METROPOLIS HEALTH SERVICES
MANIPAL
GLOBAL
5. Private hospitals based on Specialty
SPECIALITY HOSPITALS IN BANGALORE

100 80 60 40 20 0 MULTI SPECIALITY SUPER SPECIALITY SINGLE SPECIALITY GENERAL PRIVATE HOSPITALS 21 64 42 85
10
DIABETICS 4 CARDIOLOGY 13 NEURO 8
ORTHOPEDIC 14
KIDNEY 15
EYE 20
SINGLE SPECIALITY 85
CANCER 11
6. Bangalore has 2 JCI accredited hospital Apollo Hospital Wockhardt hospital
11
7. Hospitals based on Location

NORTH BANGALORE 55
WEST BANGALORE 65
CENTRAL BANGALORE 75
EAST BANGALORE 69
SOUTH BANGALORE 56
8. Hospitals empanelled by Insurance companies and Third Party Administrators (TPA)
There are more than 165 hospitals which are empanelled by various Insurance Companies and Third Party Administrators (TPA).
12
GAP ANALYSIS
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 DOCTORS NURSES PHYSICIANS BEDS 0.5 1.5 1.27 2.3 1.8 DEMAND SUPPLY 3.45 3.96
2.2
PARTICULARS POPULATION BED PER 1000 POPULATION NO. OF BEDS GOVT. PRIVATE
CURRENT SCENARIO 8 MILLION 2.2 18,000 7,200 10,800
EXPECTED (2010) 9 MILLION 3.96 34,000 8,500 25,500
13
Currently there are 18,000 beds (7,200 beds in the public sector and the rest in private) in Bangalore hospitals and another 16,000 beds will be added by 2012, bringing bed to thousand population ratio to 3.96. Out of this total, 12,000 beds will be added by private sector and the rest will be by the government. The medical infrastructure market will grow at 14.5%. The total investment needed to reach the target of bed to thousand population of 3.96 will be US$1,000 Million (Rs. 5,000 Crores) out of which US$750 Million (Rs. 3,750 Crores) will come from the private sector. The revenues currently generated by the private hospitals in Bangalore are US$130 Million (Rs.650 Crores) and are likely to increase to US$230 Million (Rs.1,150 Crores) by the year 2012 at a CAGR of 15%. Therefore the breakeven period for hospitals is likely to shorten from 5 years to 4 years.
14
DEAL STRUCTURING
The deals can be done through Equity, Debt or Hybrid instruments.
PROMOTER'S STAKE EQUITY DEAL STRUCTURING MINORITY'S STAKE DEBT CONVERTABLE BONDS
HTBRID
Valuation of hospitals is based on the following parameters: Average Revenues/bed Occupancy ratio Location Medical Infrastructure Cash flow Value of assets, etc. Value of hospitals going for leasing is based on following parameters:Land and Equipment
15
Number of out-patients/day and in-patient/day Previous 5 years cash flow & revenues and future cash flow & revenues
Page
RECENT DEALS
th
Acumen Fund invests in Bangalore based AyurVAID hospitals on 12 June, 2008. Over the next five years, AyurVAID will establish 50 small hospitals (15-30 beds) in urban and semi-urban areas. The next three hospitals in the AyurVAID network, in different parts of India, will be launched in the near future. The Bangalore Hospital has acquired KVG Bangalore hospital which has a capacity of 100 beds located at Bannerghatta (17 kms from Bangalore Hospital) mainly catering to rural population. This is a general hospital which extends its facilities to the rural public at nominal charges.
16
EXPANSION PLANS
Trinity Hospital and Heart Foundation would be setting up a new multi-speciality facility in the city at a cost of Rs.40 Crores (Approximately US $8.8 Million). The new 125-bed healthcare centre would have extended facilities such as nephrology, and orthopaedic care and surgery. It is expected to be launched in the next 18 months. Narayana Hrudayalaya P Ltd (NHPL) plans to establish 5,000-bed health cities in the major state capitals of India. It intends to reach 20,000 beds within the next five years. The group owns three hospitals in the cities of Bangalore and Kolkata with a total bed capacity of 2,500. It is currently expanding the 1000-bed Bangalore facility to a 5000-bed facility. Hosmat Hospital started out as a 350 bedded Hospital in 1991 in the city of Bangalore and today has expanded itself up to 450 beds super-speciality hospital specialising in orthopaedics and joint replacement. The Hospital has plans to increase its bed strength to 500 beds in the coming future making it the largest speciality hospital of its kind in Asia. SBF Healthcare Pvt. Ltd, is looking to raise $5 million (about Rs24 crore) from investors to set up a countrywide network so as to scale up an non-invasive treatment of osteoarthritis. SBF Healthcare Pvt. Ltd is planning to set up 50 centres across India in the next financial year. Global Hospital has commenced operations of the 500-bed BGS Global Hospital, a superspeciality and tertiary care hospital in Bangalore which is a joint venture between the BGS Trust and Global Hospitals, built on a 50-acre campus of BGS Health and Education City. The total investment in the facility is about Rs 170 crore.
17
PROJECTED GROWTH IN THE NUMBER OF BEDS

NAME OF THE HOSPITAL NUMBER OF BEDS IN 2010 350 100 600 550 102 105 1200 665 1000 1700 220 150 180 150 400 640 550 EXPECTED NUMBER OF BEDS IN 2012
Hosmat Hospital Koshys Hospital Manipal Hospital Apollo Hospital Pristine Hospital Shekhar Hospital St. Johns Hospital Sagar Hospital Vydehi Hospital Global Hospital Church of South India Hospital Mahabodi Mallige Hospital Indira Gandhi Institute of Child Health Mallya Hospital Sparsh Hospital MVJ Medical College & Research Centre
420 120 720 660 123 126 1,440 798 1,200 2,040 264 180 216 180 480 768 660
18
Page
St. Marthas Hospital
2500
2000
1500
1000
500
NO. OF BEDS IN 2010
19
EXPECTED NO. OF BEDS IN 2012
PROFILE OF THE HOSPITAL CHAINS

MANIPAL HOSPITAL
Manipal hospital is Indias first hospital to be ISO 9001:2000 certified for Clinical, Nursing, Diagnostics and Allied Areas. The hospital has been declared winner of the prestigious Golden Peacock National Quality Award 2005 in the service category. The hospital has over 44 specialties with state of the art equipments, dedicated doctors and support staff around the clock. Facilities 600-bed strength Over 275 consultants Over 1700 well-trained support staff Over 43 specialties Intensive Care Units o Medical ICU o Intermediate Care ICU o Neuro Surgical ICU o Paediatric ICU o Neonatal ICU o Cardiac ICU Multi-Speciality Services Under One Roof 24 X 7 Hi tech Ambulance Services 24 X 7 Hi tech NABL Accredited Diagnostic Services 24 X 7 Pharmacy Free Home Delivery within 5 km Radius 24 X 7 Blood Bank 24 X 7 Accident & Emergency Services (Casualty) 24 X 7 Pediatric Emergency Telemedicine Valet Parking Services to Accommodate over 250 Vehicles Out Patient Consultations on Sundays & Holidays Evening Out Patient Consultations Comprehensive Health Check Facility
Page
20
FORTIS
Fortis Bangalore is a state of the art 400 Bed facility hospital equipped with latest technology and truly World class Clinical Talent dedicated to the whole range of Cardiac, Orthopedic, Neurosciences, Minimal Access Surgery and Women & Child Services. If Bangalore is known as Asia's preferred medical destination, then Fortis Hospital is the choice for Super-Specialty healthcare. As Bangalore earns the tag of a multi-dimensional healthcare city, Fortis Hospitals on Bannerghatta Road takes the big leap into a multi-disciplinary SuperSpecialty healthcare provider. Today, this new facility is undoubtedly set to be a landmark in South Bangalore and a milestone in the medical map of Asia. Some of the key Clinical Departments we have at Bangalore are as follows. Heart Care Bone & Joint Care Brain & Spine Care Minimal Access Surgery Women Care Dental Care Associate Specialties
APOLLO
The brand new Apollo Hospital in Bangalore is the latest addition in the healthcare scenario in India. The medical experts in Apollo Hospital in Bangalore include a few names renowned all over the world in their field. Add to that the state of the art diagnosis facilities. The specialty departments in Apollo Hospital in Bangalore include: Cardiology and Cardiac surgery Diagnostic Services ENT Emergency & Trauma Internal Medicine Neurology and neurosurgery Orthopaedics Obstetrics & Gynaecology
Page
21
Paediatrics & paediatric surgery Plastic surgery and Cosmetic surgery Surgical & Medical Gastroenterology Urology & Nephrology Oncology More than a hundred nursing staff take care of the patients round the clock. They are available anytime at the 24x7 helpline. Be it pre-hospital or in-hospital care, cordial services with a touch of traditional Indian hospitality, would pamper the patients with personalized attention at Apollo Hospital Bangalore. Here one can find the best in the world in patient care with - 64-Slice CT Scan, Low energy & high energy Linear Accelerators, Digital X-Ray, Holmium & Thullium Laser, 4-D Ultrasound for 4 dimensional Sonography. The surgical infrastructure in Apollo Hospital in Bangalore deserves a special mention indeed. Latest technology coupled with global surgical protocol and completely sterile environment vie with the best across the world. The Dialysis Unit, equipped with stations hi-flux and low-flux transfusion compatibility and the Flat Panel Cath Lab with 3D CA boast of advanced infrastructure.
GLOBAL
Global Hospitals is India's fastest growing chain of facilities offering tertiary level super specialty care and multi organ transplantation services. With hospitals already functioning in Hyderabad, Bengaluru and Chennai, the group is all set to foray into Mumbai, Kolkata, Delhi and Bhubaneswar. Global is a leader in India in performing liver, heart, lung, kidney, and heart-lung transplantation, as well as bone marrow transplantation. The outcomes at Global are on par with the best centers in the world.
22
Page
Global Hospitals has become the destination of choice for all discerning patients from within the country and abroad because it:
ANALYST: NITI BUTALA PH:912265262307 FAX:912266756249 E MAIL:nitibutala@northbridgeasia.com Offers world-class care at affordable cost Employs personnel with rich experience and impeccable credentials Deploys state-of the-art equipment and technologies Believes in multi-disciplinary teamwork Produces results on par with the best in the West Sets benchmarks in quality, safety and innovation Exceeds patient expectations by going the extra mile in service
Milestones Created: First Liver Transplant in the State First Bone Marrow Transplant in the State First Heart Transplant in the State First Twin Kidney Transplant in the State First Hospital to offer free Liver Transplantation for Children, recently performed a Transplant on a Pakistani child successfully. Outstanding Success rate of over 90% in the above. Associated with Kings College Hospital, United Kingdom in Liver Transplantations First Hospital to introduce Two-Wheeler Ambulance services (GART-Global Accident Rescue Team) First Corporate Hospital to be recognised by Govt of India, for Research and Development.
23
DR.AGARWALS EYE HOSPITAL

Dr. Agarwal's Eye Hospital is listed as A Major Eye Centre of the World by The International Congress of Ophthalmology It brings advanced internationally approved eye care services to ones doorstep. Speciality Refractive Surgery Squint Vitreo Retinal Glaucoma Cornea Neuro Ophthalmology Pediatric Ophthalmology
24
ABOUT NORTHBRIDGE CAPITAL

Northbridge Capital has been assisting Global companies to enter Asia for many years, whether it is through local partnership, acquisition, merger or green field ventures. We help companies and their founders to expand their businesses across Asia and advice on an array of deal structures. We also assist with raising equity and debt capital, both domestically and globally, in support of this growth. Our advisory for unlisted companies and founder businesses include: - Cross Border Mergers & Acquisitions across Asia - Financial Advisory Services including restructuring etc - Advisory on Raising Capital Northbridge Capital has 6 Practice areas and offers buy side and sell side advice across these areas: - Consumer - Technology - Financial Services - Life Sciences - Industrials - Real Estate
25
CONTACT INFORMATION India Office Ankita Mangla Email: ankitamangla@northbridgeasia.com Tel: +91-22-22901715 Fax: +91-22-42643612 Northbridge Capital Ltd R-501, Remi Bizcourt Shah Industrial Area Off Veera Desai Road Andheri (West), Mumbai 400 053, India Website: http://www.northbridgeasia.com Hong Kong Office Sam Farrimond Email: sam.farrimond@northbridgeasia.com Tel: +852-28628053 Fax: +852-22909154 Northbridge Partners (Asia) Ltd 22/F, 3 Lockhart Road Wanchai, Hong Kong DISCLAIMER - This information is for Institutional Investors and Northbridge Capital clients only. It is not meant for public circulation
Page
26
- No transmission of this information in any form or medium is allowed without the written authorization of Northbridge Capital - This is not a solicitation to buy or sell any security in any jurisdiction

Bangalore Hospital Report

Încărcat de

Informații document

Descriere originală:

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Bangalore Hospital Report

Încărcat de

Drepturi de autor:

Formate disponibile

BANGALORE HOSPITAL REPORT