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Short StayMedical CentresM o v i n g H e a l t h c a r e C l o s e r t o Pa t i e n t s
a quar te r ly repor t by technopak | May 2012www.technopak.com
Healthcare
Design Aspects- greAter efficiency, Better UtilizAtion
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gloBAl scenArio - setting tHe tone
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Key strAtegic iMperAtiVes - tUrning tHe tiDe
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inDiAn perspectiVe- tHe groWtH story so fAr
coMpetitiVe scenArio– reDefining BUsiness of cAre
DeliVery forMAts- DeMystifying tHe BUsiness pArADigM
fUtUre roADMApcHAllenges AnDroADBlocKs
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Contents
Design & Development
Bharat Kaushiksr. Manager-Design i [email protected] i +91-9811661493
Arvind SundriyalAssistant Manager-Design i [email protected] i +91-9910493934
Author:
Sonal PahwaAssociate Director i [email protected] i +91-9810266395
May 2012 | Short Stay Medical Centres
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OverviewBeing hard-pressed for most healthcare resources, be they hospital beds or nurses and doctors, India faces an urgent need of healthcare delivery models that utilize these scarce resources efficiently and effectively.
To address this concern, healthcare providers are increasingly 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. Corporate players 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.
Consumers, on their part, are shifting to healthcare centres which are near their residence or work, and also more convenient and less intimidating than a large hospital.
The above factors, coupled with rapid advancements in medical and surgical technology have led to the emergence of healthcare centres offering day care medical and surgical procedures which require the patient to stay in the hospital/healthcare institution for less than 24 hours. In such centres, called Short Stay Medical Centres, the admission and discharge of patients typically take place on the same day. Further, these centres can be hospital-attached/affiliated or stand-alone entities.
There is much support for this segment from insurance firms who have accepted this new model and currently cover over 800 day care procedures.
Although quite prevalent in the developed world, where Short Stay Medical Centres are famous as ambulatory centres, these services are still at a nascent stage in our country but expected to grow at a CAGR of ~15% in the next decade.
Short Stay Medical Centres offer vast advantages to both patients and providers. Better ambience, greater accessibility, more convenient scheduling, and economical pricing of services are some of the benefits for the consumers. The fact that such centres require less capital and operational expenditure, and can be made operational in a shorter time span makes them an attractive proposition for corporate healthcare providers.Like any non-conventional model, Short Stay Medical Centres have their fair share of challenges. For example, India does not have any regulatory standard for procedures to be classified as day care. However, we foresee this business segment overcoming such challenges and expanding at an impressive pace.
This Outlook edition aims at spelling out the latest trends and business opportunities in this niche healthcare segment and the shape it is going to take in the near future.
Day Care procedures are those which require the patient to stay in the hospital/healthcare institution for less than 24 hours.
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outpatient surgical centre industry comprises of around 3,500 companies that operate about 5,300 centres.
As per the latest CDC trends in the US, rate of visits to freestanding short stay surgery centres increased about 300 percent, whereas the rate of visits to hospital-based surgery centres remained largely unchanged indicating a preference for freestanding centres. However, the industry is highly fragmented: the 50 largest companies generate about 30 percent of revenue.
Global Scenario- Setting the ToneThe concept of short stay medical centres emerged in the 1970s in the US. Most of the hospitals in those days were running to maximum capacity and patients usually had to wait for months to get even minor surgical procedures done. This prompted the doctors to start centres where less complex surgeries could be shifted out of hospitals and patients could return to their homes on the same day as the surgery.
This also helped hospitals as there was no need to have dedicated beds for these patients. Since the centres were based on low margins and high volumes, they became very popular among the consumers. Responding to this shift in consumer preference, more short stay medical centres came into existence.
Since its emergence, impressive growth has been recorded in day care procedures in the last 40 years, and they have now become the norm for nearly all elective surgeries in the western world. In countries such as the United States and Canada, they account for nearly 90% of all surgeries performed. (Source: European Observatory Day Surgery)
Typical procedures involve eye care, orthopaedics, ENT, plastic surgery, pain management (spinal injections), abortions, endoscopy, and laparoscopy. The US
Ambulatory Surgery Distribution in USA
Annual Number of Ambulatory Surgeries in US
60 Million
Pain Management Urology Orthopedics Plastic Surgery
GI Opthalmology Other
Exhibit 1:
Source: Centres for Medicare and Medicaid services (CMS) 2011, CDC Survey of Ambulatory Surgery Centres, Revised 2009, Technopak Analysis
10%
5%
15%
8%
14%
30%
18%
A big share of day care surgeries goes to small short stay medical centres that have 20 or fewer full time employees, owned by members of the community. These small, community-based businesses benefit their communities, not only by providing access to reasonably priced surgical care, but also by making significant contributions as family-friendly employers, usually offering good healthcare and retirement benefits , besides flexible work schedules, to their employees.
Day care surgery, as a percentage of elective surgery has risen steadily in England as well, accounting for more than half of surgical procedures performed in NHS hospitals in recent years. Two of the most frequent procedures included in day care surgery programs in the UK are inguinal hernias and cataracts, due to their high prevalence rate.
The major operators in ambulatory care centres in the US are as follows;
In the rest of Europe, the growth in day care procedures has not been as aggressive as in the United States, but it is still quite significant. In countries like Belgium, France, Netherlands, Germany and Switzerland, ambulatory care services account for a quarter of the total health care expenditure which is next only to hospital services.
We anticipate that this concept of day care surgery units/centres will eventually help shorten the average length of stay, or ALOS, in European hospitals bringing it closer to the figures observed in the United States today. It will also prove to be more profitable for the providers, as a surgical procedure done in a short stay centre costs about 47% less than the hospital rate.
Provider Number of Centres (approximate figures)
AMsUrg corp. 220
surgical care Affiliates United surgical partners
140
Hospital corporation of America 100
As per the latest CDC trends in the US, rate of visits to freestanding short stay surgery centres increased about 300 percent
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Indian Perspective-The Growth Story So FarIndia with a population of 1.2 billion and GDP of USD 1.38 trillion spends 4.9% of its GDP towards healthcare delivery which is fairly meagre when compared with the US whose healthcare spend is 1.5 times the Indian economy. At an average of 1.1 hospital beds per a population of 1000, when the world average is 3, there is an acute paucity of hospital beds, putting an immense burden on Indian hospitals.
Moreover, with only 0.7 physicians, and 1.3 nurses, per a population of 1000 against the global average of 1.4 and 2.97 respectively, our healthcare system needs economically efficient models like short stay centres which require less capital and manpower and allow sharing of resources.
In India, the concept of day care is currently in its infancy, with only 20% of all surgical procedures being
done on an outpatient basis. Surgeries like cataract correction, cholecystectomy, kidney stone removal etc. can now be safely performed outside the boundaries of a hospital with same precision and clinical outcome. However, most of these surgeries are still performed in hospitals, creating a burden on assets which can instead be used to perform complex procedures like a cardiac bypass or organ transplants.
In the last decade, a small but significant number of short stay centres have been set-up in our country, primarily in Ophthalmology, Gastroenterology and Orthopaedics are other specialties which contribute to a substantial chunk of day care services being offered in the country. Hospitals are increasingly dedicating few of their beds as day care beds, making an efficient use of the assets available to them. More centres are expected to be operational in the near future.
Key Drivers for growth of Short Stay Centres• Consumer Convenience: Admission and discharge
process is simple, less cancellations and delays, more convenient location
• Cost Effectiveness: Consumer pays less money for the surgery compared to same surgery in a hospital
• Healthcare Funding: Increased insurance coverage support for day care procedures reduces burden on consumer
• Increased Demand: Increasing Consumer awareness about non-conventional delivery models
• Patient Safety: Patients are safe from Hospital-acquired infections
• Enhanced Efficiency: Hospital-controlled centres can use their assets more efficiently
• Social Advantage: In coherence with the changing life style, as patients can rejoin their family at the earliest.
• Effective Advantage: Feeling of well-being persists due to the quick treatment and discharge.
43%
57%
Indian Short Stay Surgery Market Size(Billion US $)
Short Stay Surgery Distribution in India
3
6
12
2012 2017 2022
CAGR 15%25%
24%
14%
8%
7%
3%10%
5%4%
Source: NSSO 60th Round, Technopak Analysis
Urology Opthalmology Gastroentrology GynecologyOrthopedics
ENT OncologyGeneralPlastic Surgery
Distribution of Short Stay Surgeries Vs High end Surgeries in India -2011
Ambulatory Care Surgeries
High End Surgeries
Size of OpportunityOpportunity for Short Stay Medical Centres in the country is now gradually recognised and will be at the forefront of the healthcare industry growth in the future. Market size of short stay centres is currently pegged at $3 billion and will further rise to $12 billion by the end of 2022.
For Consumer For Provider
• Better Ambience and environment
• early Discharge from surgery
• convenient scheduling & Discharge process
• low cost of treatment
• Minimal risk of Hospital infection
• low capital expenditure
• Higher efficiency of Assets
• High patient satisfaction
• cost effective Model
• High Volume & low risk surgery
Key Differentiating Factors
Only 0.7 physicians, and 1.3 nurses, per 1000 population against the global average of 1.4 and 2.97 respectively, our healthcare system needs economically efficient models like day care/short stay centres
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Competitive Scenario-Redefining Business of CareIndia with its burgeoning demographics & plethora of health issues opens up new vistas for out of the box format like short stay medical centres. Healthcare competitors in India are striving for achieving greater consumer value and commercial objectives. With rising income and increased consumer aspirations, the providers are also battling hard to create a service differentiator in their offerings.
Healthcare delivery business in the country has undergone a multipronged diversification and is inching closer to a value driven competition.
During the last decade, India witnessed a spurt in the number of providers offering “day care” solutions to the consumer. Competition among short stay medical centres is gradually brewing up and the providers are now focussing more on a “patient-centric” approach.
Providers in the short stay business are scripting success stories irrespective of the specialty they offer, reflecting rising acceptance among the consumer base. Players like Nova Specialty Surgery or Centre for Sight have demonstrated that the age of “low asset-high returns” format is on the anvil. These providers have clearly indicated the growing aspiration to drive the business, creating more value to the patient and institution. Emboldened by the growing
demographic requirement and the demand supply mismatch, providers are constantly expanding their
“expansion” wings. Nova, for example, had envisaged opening 25 such centres by the end of 2012. More such players are expected to join this “club” of new age delivery format in the next five years.
By virtue of being a low asset and easily replicable format, Short stay medical centres also enticed the interest of Private Equity (PE) players. Investors like Matrix Partners, Sequoia Capital, and Helion Advisors are some examples of PE firms showing interest in this format’s growth. It is anticipated that the investment in this format will witnessed a growth trajectory in the coming years.
s.no provider centres focus specialty
1 Vasan eye care 25 ophthalmology
2 centre for sight 20 ophthalmology
3 rg stone 13 Urology
4 nova specialty surgery 7 Multispecialty
Leading Market Players
Competition among short stay medical centres is gradually brewing up and the providers are now focussing more on “patient centric” approach.
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Delivery Formats-Demystifying the Business ParadigmThere are various types of day care centres in existence, a few of which enjoy some sort of association with an established hospital while others are standalone entities. However, the success of these centres depends on multi-disciplinary teamwork and coordinated interdepartmental activities. Day-surgery units tend to achieve maximum efficiency and effectiveness when the management and staff specific to that service are goal-oriented and innovative, enjoy the fast-paced environment and continually strive for customer delight.
From the business perspective:There are four basic day care delivery models that exist within healthcare:
1. Hospital integrated unit
2. Hospital autonomous unit
3. Hospital satellite unit
4. Freestanding unit
Hospital Integrated Unit
Hospital Autonomous Unit
Hospital Satellite Unit
Freestanding unit
Critical Analysis of Delivery ModelsAll the above models have been analyzed on key critical parameters which are largely responsible for determining the success of day care centres.
If the parent hospital enjoys a good market position, it is relatively easier to get consultants on board in hospital integrated and autonomous models. This is because such associations are perceived by doctors as more rewarding in terms of career stability and financial security. However, freestanding and hospital satellite centres score higher when it comes to job satisfaction among consultants. This is because such centres provide more autonomy and flexibility to surgeons in scheduling their work, follow a more streamlined approach to the surgical episode, and often witness better surgical outcomes with lesser incidence of hospital-acquired infections.
In terms of quantum of capital investment required, hospital integrated model is most attractive since most of the facilities are shared with the parent hospital and this translates into lesser expenditure on medical equipment and land. Capital Investment is highest in satellite and freestanding models as the land is purchased or taken on lease, and sharing of equipment etc. is practical only when the units are in close physical proximity.
However, both satellite and freestanding centres are easy to manage operationally because of zero interference with the hospital operation, more streamlined process flow and more horizontal organizational hierarchies. They also enhance overall customer experience by providing better ambience, hassle-free admission and discharge, more competitively priced services and better accessibility to the patient.
Return on Investment (ROI) is generally highest in hospital autonomous centres as they share certain services with the hospital but the revenue sharing terms are in favor of the short stay center.
Potential Business Formats “In Vogue”There are certain specialties and super-specialties which, due to the nature of the procedures involved, have proved to be more appropriate for short stay centres across the world. Some of the identified business formats in short stay medical care are:-
Ophthalmology, which at present constitutes the major chunk of day care surgeries done in India, will continue to see growth in this delivery format. However, the potential of this concept among services in the fields of Oncology, outpatient surgeries and dialysis largely
remains untapped. Going forward, short stay centres would cater to this unmet need.
Below is a brief overview of the rationale, business format and USP of short stay centres in each of these specialties.
• EyeCareCentresChanging lifestyle and demographics with increasing elderly population as well as rapid urbanization has influenced the pattern of eye diseases in our country. India with 62.2 million patients is fast becoming the diabetes capital of the world, which has resulted in a significant increase in the number of cases of diabetic retinopathy. The good news is that people are becoming more aware about these conditions as well as cosmetic procedures, and also have the ability to pay a premium for high quality eye care.
In response to the spurt in demand, there has been significant progress in therapeutic interventions for eye diseases, especially in surgical procedures for treatment of cataracts. This has resulted in the fact that today, over 95% of all eye diseases can be treated on a day care basis.
Delivery of eye care services in India has also been strongly impacted. The last decade witnessed the entry of many new private service providers which operate low-cost, high value specialized eye centres. This trend kick-started in the southern part of the country and is now spreading to the rest of India. Most of these centres offer end-to-end medical and surgical ophthalmology services, together with basic diagnostic and pharmacy support.
• Unit is an integral part of the existing hospital
• All physical facilities like OT, OPD, pharmacy and other areas are shared with the hospital
• Healthcare workforce is common except the nursing staff
• Unit is semi-autonomous, physically far from hospital
• Unit will have all basic facilities like OT, OPD, pharmacy & diagnostics
• Unit will have a dedicated workforce
• Unit will share few consultants from the hospital and also have dedicated full time consultants
• Unit is autonomous
• Unit will have all basic facilities like OT, OPD, pharmacy, diagnostics
• Unit will have dedicated workforce including consultants.
• Unit is located in the premises of the hospital
• Unit will have its own OT, OPD, other areas
• Facilities like Pharmacy, Diagnostics, Lab etc. are shared with the hospital
• Unit will have a dedicated workforce
• Consultants will be common for both
Parameters for Analysis
Hospital Integrated
Hospital Autonomous
Hospital Satellite
Free Standing
ease of Doctor engagement
Quantum of capital investment
ease of Managing operations
consumer convenience
roi
High Medium low
Eye Care Centres
Dialysis Centres
Oncology Centres
Outpatient Clinic cum
Surgery Centres
Service Profile: Eye Care Centre
OTs and Recovery
Area
Waiting Area
Pharmacy
Examination/Refraction
Rooms
Eye Care Centre
OPD
Patient Admission
Area
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By virtue of focusing on one specialty, these centres are able to achieve high productivity by significant process innovation driven by close analysis of turnover time, thus enabling the doctors to treat more patients. While some of them operate on high volumes-low margin model, others concentrate on enhancing the patient experience but charge a premium for their services.
However, this segment is attractive for all these players due to low capital expenditure, faster gestation period and higher financial efficiency.
The cost advantage of eye care surgery centres is best achieved in freestanding centres or free-functioning units within hospitals. Studies reveal that treatment in these centres would cost about 47 percent less than in hospitals. Overnight room costs and related overhead costs are eliminated and further, surgeons can attend to more patients in less time. This model has brought high quality eye care to the doorstep of the people.
• OutpatientCliniccumSurgeryCentresGrowing patient preference for a shorter hospital stay, advantageous technological advancements and reduced costs for patients and hospitals have made day care surgeries a rising global phenomenon. About 80% of ailments do not require hospitalization and as such the format aids in addressing the accessibility woes to a large extent. Currently in India only 20 percent of surgical procedures are done on an outpatient basis. However, many dedicated standalone centres are expected to come up together with day care surgery beds in multi-specialty corporate hospitals.
This format is a combination of the neighbourhood clinic combined with a day care surgical centre with in the same premises. While the focus is primarily on outpatient and surgical services, such centres also provide support services like basic radiology, path lab, and pharmacy. The format is not only a viable investment option in itself but can also serve as a spoke in an operational hospital. It can also play a crucial role in the expansion strategy of a healthcare delivery organization.
Day care surgeries can be instrumental in lowering hospital costs by reducing ALOS and increasing availability of hospital beds for higher margin inpatient surgeries. Day care models have shown to lower costs by 15 percent to 40 percent globally. Potential savings in the Indian context are estimated to fall in the high bracket, over 30 percent, as day care surgeries may prove to be critical in alleviating the severe constraints on medical infrastructure.
• OncologyCentresIndia is home to 3.0 million cancer patients, with 1.1 million new patients diagnosed every year. The increasing incidence of cancer is further pushing the demand for Oncology services. Technology advancements and evolving treatment modalities have had a strong impact on cancer treatment delivery models in the country. In the past couple of years many private players have developed dedicated cancer treatment centres with attached day care centres that provide radiation therapy, chemotherapy/intravenous fluids to the patients.
The disease requires most patients to visit the treatment facility on a regular basis and hence the need for patient convenience. Also, more than 60% of such visits require treatment on a day care basis, including Day Care Chemotherapy and Radiation therapy.
A centre focused on oncology needs support from a multispecialty hospital to give complete care to its patients. For example, an oncology centre tying-up with a 200-300 bed multispecialty hospital located in the same campus would be beneficial for patients, the hospital and the Oncology centre. Patients would receive complete care conveniently. The hospital and the Oncology centre would be able to refer patients to each other and make better use of facilities.
The latest trend in cancer care is the standalone day care Oncology centre, which provides consultations, day care chemotherapy, and diagnostics lab under one roof. Many standalone chemotherapy and radiotherapy centres have come up in Tier-II cities and small towns.
Such centres help bring cancer treatment and diagnostic facilities closer to patients, who can in turn access treatment while leading near-to-normal lives closer to their loved ones.
•DialysisCentresIndia has about 0.9 million End Stage Renal Disease, or ESRD, patients who require dialysis, and this number is expected to double in the next decade. Unfortunately, of all ESRD patients who require dialysis, less than 10 percent have access to a dialysis facility, which are majorly concentrated in metros and big cities. People in smaller towns and villages therefore have to travel long distances to avail this facility. Further, dialysis patients need to make an average of two visits per week to dialysis
Service Profile: Short Stay Surgery Centre
OT complex with
Recovery
Day Care Ward
Pharmacy
Radiology
Short Stay Surgery
Centre
OPD with Treatment/Procedure
Room
Path Lab
Service Profile: Oncology Centre
Path Lab
Refreshment Area
RadiationOncology
Chemotherapy Ward
Oncology Centre
OPD, Procedure
Room
Waiting Area
Service Profile: Dialysis Centre
Path Lab
Waiting Area
Pharmacy
Dialysis Unit
Dialysis Centre
OPD
facilities and thus their preference for a place closer to their home.
However, at present, there is a near complete lack of standalone dialysis centres, even in the metro cities. Therefore, a massive investment in this segment is foreseen across the country. The margins in dialysis centres is similar to that of eye care and dental centres, but due to the relatively larger real estate component involved, the return on capital investment is a little lower.
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Design Aspects-Better Efficiency, Greater UtilizationFor the concept of short stay centres to come to fruition, efficient designs and scientific planning is of utmost importance, so as to realize the cost benefits intended. By and large, the design of a day care centre depends on the range of specialties to be offered, but the following general strategies can help achieve the purpose:
Design efficiency• Hindrance-free, minimal distances between critical
areas should be designed to encourage efficient process flows.
• Controlled flow of patients, doctors, staff and goods with due consideration to horizontal as well as vertical circulation, as per the design needs can help in lean design.
• Appropriately placed and adequately sized spaces, as per the functional requirements and volumes projected will help in efficient design.
• Visual supervision of the patients should be ensured to optimize staffing.
Flexibility• To accommodate further technological advance and to
avoid redundancy or obsolescence, flexibility should be built into the design.
• Appropriate medical and non-medical equipments and their needs should be kept in mind while determining the specifications.
• Modular space and layout plans, generic room sizes, and open-ended concepts permit well-planned future expansion and provide flexibility as well.
Environment• Although patients are safer from hospital-acquired
infections, care should still be taken to provide a clean and sterile environment.
• Design should intend to create a simple, pleasant, and safe environment for patient recovery.
• Ample natural light and soothing colours can aid in providing lively and therapeutic environment to the patients.
Accessibility• Adequate signage helps to avoid any wastage of time
in finding places.
• Designing barrier free spaces.
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Key Strategic Imperatives- Turning the Tide
Challenges and Roadblocks
Short stay centres in India are today at a crossroads where they need to take into account whether the achievements thus far are in alignment with the initial strategy.
It is the leadership, management and staff, and not just the physical structure or the quality of the equipment that determines the success of a day care service. Success also requires the implementation of policies that deliver all the advantages of a day care centre to the patient, the healthcare professional and the community at large.
Key factors for success are careful patient selection, taking into account medical, social and surgical criteria, a standardized anaesthetic protocol, an experienced surgeon, a motivated patient with a positive attitude and a well-trained day care team. Several factors must
Though day care centres are a promising concept, they have their fair share of challenges. India does not have any standard similar to that adopted by the western countries by which procedures may be classified/considered as day care and standalone centres are yet to figure out a cost-effective model for handling the “few” cases that may need hospitalization. The barriers to expansion of this concept include the following:
PhysicianEngagementOne of the vital tasks for short stay centres is to attract and retain the competent manpower. The expansion into smaller cities comes with the challenges of non-availability of skilled manpower. Willingness of quality practitioners to relocate to smaller cities is a big challenge. Even in metros the top clinicians have preferences of being associated with tertiary level established institutions rather than a day care facility which is still in the start-up phase.
Consumer’sDilemmaThe Indian consumer still has apprehensions about choosing a conveniently-located short stay centre, which compares with the confidence generated by tertiary-care setups over the years. A section of consumers are willing to experiment with new single speciality high tech centres but the concept is still novel.
Facilitydesign
Available healthcare facilities are not configured in ways that facilitate the development of day surgeries, in terms of both their internal configuration (ensuring smooth patient flows) and their external configuration (ease of access by patients).
Pricing of Services
• competitive pricing based on market forces
• Value for money proposition from consumer’s perspective
Process and Work Flow
• efficient processes increase productivity
• optimum resource utilisation
Human Capital • professionally satisfying engagement model for medical & allied professionals
• clearly defined growth opportunities
Brand Positioning • strong & visible brand identity
• closeness to consumer’s aspirations aids in building loyalty
Critical Success Factors for short stay centres
be considered in order to minimize any postoperative complications.
Regulatory
National regulations and legislation may preclude a shift to day surgeries, especially if regulatory standards pertaining to day care centres, along the lines of those in place in developed countries, are not adopted.
Positioning/Branding Indian healthcare industry is still to witness a success story of a well established Day Care Centre. Providers are still contemplating the outcomes in the Indian scenario and the disconnect between the consumer’s aspiration & the service offerings.
Challenges
• Doctor Centric Practice
• Absence of emergency care back up
• Capabilities to handle medical complications
• Poor adherence to pre-op instructions
• Price points
• Poor patient acceptance
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Future Roadmap
The considerable diversity in the utilization of day surgery, both within and between countries, indicates that day surgery concept is likely to expand further, even assuming no change in technology. Yet science is changing. Further developments in day care processes, patient selection, pre- and post-operative procedures and pain relief as well as progress in minimally-invasive clinical and anaesthetic techniques are likely to reduce surgery time and increase the number and type of procedures suitable for day surgery. It is estimated that by 2020, 75 percent of all surgical operations will be carried out in ambulatory surgery centres.
Also, in an emerging economy like India, healthcare players are realising the need for innovation, and are focused on reducing costs across the healthcare delivery system. They will increasingly invest in asset-light businesses by using pay-per-use and leasing models for setting up smaller centres to lower capital expenditure.
Moreover, the initial growth of the healthcare sector was centred on the metros where healthcare providers are now facing intense competition. However, private players can no longer ignore the huge unmet demand in the Tier-II and Tier-III cities and have decided to foray into these towns using differentiated models which allow them to operate at different price points vis-à-vis the big city models.
Providers are also trying to adopt the ‘Hub and Spoke’ model to optimise infrastructure and resource utilization. Striking the right balance between the appropriate location, quantum of investment and affordable pricing is necessary for success.
Further, the coverage of day care procedures by insurance providers is going to increase in the future due to lower pricing, more convenience and faster claim settlement. Day surgery bears fewer risks of hospital-acquired infections, postoperative complications are usually minor, and mortality is extremely low, thereby bringing down the payout by insurance companies.
All the above factors suggest that there is an immense opportunity waiting to be explored. We must learn from the success stories of our Western counterparts but need to be cautious in adapting them to our environment.
Customer satisfaction
Increased Demand
Growth Cycle
Physician Satisfaction
Higher Volumes
Increased Profits
Better Quality of care
Improved Brand Image
It is estimated that by 2020, 75 percent of all surgical operations will be carried out in ambulatory surgery centres.
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