| 5.1.3 Healthcare in the Private Sector
Recent decades have seen a tremendous growth in private sector investment in healthcare. As noted in the XI Plan document, ‘There is diversity in the composition of the private sector, which ranges from voluntary, not-for-profit, for-profit, corporate, trusts, stand-alone specialist services, diagnostic services to pharmacy shops and a range of highly qualified to unqualified providers, each addressing a different market segment’.
According to the NSSO data, by 2004 the private healthcare providers were already accounting for 60 % of the cases of hospitalized treatment in the country and this proportion is likely to have gone up since then.
Although 100% FDI has been permitted in the country under the automatic route since 2000, FDI activity has been limited. Of the 90 projects approved for FDI during the period 2000-2006 (up to July), 21 were for hospital and the remaining for diagnostic centres. While FDI flows are likely to pick up in future it is not expected that very large corporate hospital chains would move into the country in the near future. However, there has been considerable corporate investment already in hospitals in the country with the help of FIIs and foreign equity and this is likely to continue. Some of the big names are Apollo Hospitals, Fortis Healthcare, Max Healthcare and Wockhardt. Apollo is the world’s third largest health provider and has 7,000 beds in 38 hospitals, 46 primary clinics and over 135 pharmacies operating in more than 20 cities in India, besides the hospitals in the Middle East and Sri Lanka (Burrill India Life Sciences Quarterly- Janauray 2007). Fortis is the second largest private health provider in India, with 1580 beds in 12 hospitals in North India at present but it has ambitious plans to run 40 hospitals nationwide by 2010 (Bruce Stokes, Bedside India, National Journal May, 2007). Wockhardt has earned a name for excellence in cardiac care and has an international alliance with Harvard Medical International. Max Healthcare is another large player, which has set up a number of hospitals and primary health centres in North India.
Some of the major proposed and newly established hospital projects are: Dr Naresh Trehan’s Medicity, Gurgaon (Rs 1,200 crore- 1,600 beds); Apollo Health City, Hyderabad (Rs 1,000 crore- 500 beds); Fortis Medicity, Gurgaon (Rs 1,200 crore- 600to 800 beds); Fortis Medicity, Lucknow (Rs 500 crore to Rs 800 crore-800 beds); Health City, Bangalore (Rs 2000 crore -5000 beds); and Bengal Health City project spread over 800 acres about 20 Kms from Kolkata.
There are a number of prospective FDI players who are contemplating investment in the country. Gleneagles, which has earlier entered into a joint venture with Apollo, is reported to be interested in entering on its own. EMAAR Group from Dubai has plans to set up more than 100 hospitals in India and the Pacific Group, which already begun operations in a small way at Hyderabad, is another prospective player.
With no regulatory impediments on the expansion of private healthcare the expectation is for sizable investment by private players in the sector in the next few years. A FICCI- Ersnt & Young study projects that out the 1 million beds that are likely to be added in the country up to 2012 as many as 896,000 will be added by the private sector.
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