Jaipur city healthcare landscape

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Jaipur city healthcare landscape Kanvic Consulting

Contents

2

A Overview of Indian Healthcare MarketStrong growth

B Jaipur city healthcare landscapeClosing of supply demand gap

Key trends Directions for future

C

Overview of Indian Healthcare MarketStrong growth

Note: E = Estimated Source: IBEF

The Indian healthcare market has grown at 15% CAGR over last five years with the hospital segment contributing 71% to the total market size

3

2008 2009 2010 2011 2012 E

78.6

68.4

59.5

51.745.0

Hospitals PharmaInsurance & Medical equipments Diagnostic

Size of healthcare market in India, USD billion

Segment wise market share in India

CAGR 15%

3%13%

13%

71%

Source: NSSO, Crisil

Increasing healthcare spend and growth in inpatients will further drive industry growth

4

Monthly per capita expenditure, Rs.

2002 2006 2008 2010 2012

95

57

494432 146

99767155

Urban Rural

2006 2013

2160

637

840617

OPD IPD

Revenue from outpatients and inpatients, Rs. billion

CAGR

11.50%

10.26%

CAGR

19.06%

4.51%

Source: WHO

The low availability of hospital beds and physicians offers a big opportunity in India

5

6.5

12.2

17.6

24.2

27.7

4.9

14.6

36.9

9

22

23

30

30

36

39

82

Physician per 10,000 population

Hospital beds per 10,000 population

Germany

UK

USA

Brazil

China

Vietnam

India

Sri Lanka

Note: * 2013 figures till September 13 Source: Venture Intelligence, Kanvic research

The healthcare sector has attracted the attention of Private Equity in recent years

6

2011 2012 2013*

526.8

1146.4

429.2

• Private Equity and Venture Capital are taking interest in the healthcare industry. The share of PE investment in healthcare sector shot up to 12 percent in 2012.

• Both multi speciality and single specialty hospitals are gaining the attention of PE/VC investors.

PE investment in healthcare sector in India, $ Mn

Healthcare sector share in total PE investment

4% 12% 10%

Contents

7




C

Jaipur city healthcare landscapeClosing of supply demand gap

Source:

Jaipur is a fast growing city with hospitals clustered around Tonk Road and JLN Marg

8

New developmentKalwar Road

New developmentAjmer Road

New developmentTonk Road

New developmentAgra Road

New developmentSikar Road

Major Hospitals in Jaipur

Source: Kanvic research

Jaipur’s healthcare market has evolved over the years

9

1947

2000s1971

SMS Medical college is set up by the Government

First private hospital Santokba Durlabhji Memorial Hospital (SDMH), run by a trust, is inaugurated

Institute based hospitals are set up after privatisation of medical education in the state

Narayana Hrudayalaya, a leading Cardiac care hospital in India, opens in Jaipur

Soni hospital starts operations with 20 beds

1986 2004

S K Soni Hospital begins operations with super specialities in cardiology, cancer, nephrology and neurosurgery

100 bedded Tagore hospital begins its operations

Fortis Escorts, the first corporate hospital in Jaipur, opens its doors to the public

2006

2007

2010

Evolution of healthcare market in Jaipur

First public private partnership Metro hospital established. PPP between Metro Group and the Govt. of Rajasthan

2012

Eternal Heart Care Center started. Nova speciality surgery also begins its operations

2013

Source: Government of Rajasthan

The Government of Rajasthan has introduced a healthcare policy to promote the healthcare industry

10

•Minimum investment of Rs. 10 Crore in a Health Care Facility

•Minimum investment Rs. 5 Crore in case of Nursing and Para Medical Institutes

•Minimum investment Rs. 50 lakh in case of 15 bed hospitals/nursing homes situated in towns/villages

•The project should be completed in a period of 3 years from the date of allotment

•Those who have been allotted land on concessional price, shall have to keep 10% of beds reserved for BPL (Below Poverty Line) patients

•Those patients will be treated free and will pay only 25% of the charges incurred on Drugs and Diagnostics

•The order of Priority for land allotment is as bellow:

1. Multi Super Specialty Hospitals2. Single Super Specialty Hospitals3. Medical colleges with Teaching Hospitals4. Dental Colleges with General and Dental Hospitals5. General Hospitals6. Support units like State of Art Diagnostic Centres/Blood Banks/ Nursing and Paramedical Training Institutes

Eligibility

•The hospitals will have an exemption from electricity duty on captive generation as per the provisions laid down in clause 8 (iii) of Rajasthan Investment promotion policy (RIPS) 2003 for a period of 7 years

•50% exemption in stamp duty (as per clause 8(iv) of RIPS 2003)

•50% exemption in conversion charge (as per clause 8(v) of RIPS 2003)

A Land allotmentB Tax benefitsC

Source: Press clippings, Kanvic research

New hospitals will increase the supply of beds in the market

11

Hospital Speciality No. of beds Proposed

investment, Rs. Crore

Reliance Medicare Super Speciality 800 200

Bombay Hospital Multi Speciality 650 150

Max Hospital Multi Speciality NA NA

International Oncology cancer Hospital Super Speciality 100 54

Apollo Hospital Super Speciality NA NA

Shalby Hospital Super Speciality 300 NA

B M Birla Heart Research Centre - NA 300

Manipal Hospital Multi Speciality NA NA

Jaipur National University’s Medical College Multi Speciality 1000 NA

Proposed new hospitals in Jaipur

Note: 1 Demand for beds is based on WHO standard of 35 beds for a population of 10,000.

Source: Kanvic research

The supply of beds may exceed the existing demand in the near future

12

Total Demand for beds1

Existing supply

Proposed addition

Future supply

5,622

13,005

3,150

Demand supply situation in Jaipur, number of beds

13,1494,377

Government hospitals Private hospitals

Contents

13




C Key trends Directions for future

There are key five trends in Rajasthan’s healthcare industry

Key trends

1New investments

2

4

3

5

14

Public private partnership model

Awareness on quality accreditation

Tie up with other speciality care Ultra luxury hospital

Jaipur is evolving from a tourist city to a medi-city

Source: Press clippings, Kanvic research

Rajasthan’s healthcare industry has received significant new investments in the past few years

15

ASG Eye Hospitals, a Rajasthan based group of super specialty eye hospitals has raised Rs. 50 crore from Sequoia Capital. The funding will be used to support expansion in central and north India. The hospital started in 2006 and has presence in 6 cities across Rajasthan. The group now plans to expand to Jharkhand, Madhya Pradesh, Uttar Pradesh, Chhattisgarh and Bihar.

Private equity (PE) firm Matrix Partners India has invested around Rs 30 crore in Mewar Orthopedic Hospital, a group that runs specialised units for surgical orthopedics. Matrix will take an approximate 20% stake in the hospital chain that operates six centres across a host of cities including Udaipur and Bhilwara in Rajasthan and Ujjain in Madhya Pradesh.

Pandya Hospital & Research Center has become Nova Speciality Surgery. The hospital opened its facility on the premises of the erstwhile Pandya Hospital & Research Center Jaipur.

1

Fortis Healthcare Ltd has bought 100 beds Lifeline Hospital in Alwar, Rajasthan. Lifeline Hospital plans to expand it to a 150-bed facility in near future. The hospital will be re-named as 'Fortis-Lifeline Hospital'.

Government of Rajasthan has established a first-of-its-kind public private partnership hospital in Jaipur

16

•The state’s first multi-specialty hospital on a public private partnership (PPP) basis, Metro Manas Arogya Health and General Hospital, opened in Jaipur in 2012.

•The hospital has 22 specialties in the initial stage.

Metro Manas Arogya Health and General Hospital

2

Note: NABH is a constituent board of Quality Council of India was set up in 2005 to establish and operate accreditation programme for healthcare organisations in India. NABH has standards specific to the Indian healthcare setting, major aspects being the assurance of uniform access, assessment, care of patients and protection of patient’s rights.

Source: NABH

A number of hospitals in Jaipur have already received NABH quality accreditation

17

Hospital Status of Application

Fortis Hospital Got Accreditation

Apex Hospital Got Accreditation

S.K. Soni Hospital Got Accreditation

Jaipur Hospitals going for NABH accreditation

Bhandari Hospital Got Accreditation

Heart & General Hospital Got Accreditation

3

SDMH In process

BMCHRC Documents received

Tagore Hospital In process

Monilek Hospital Documents received

Source: Press clipping, Kanvic research

Hospitals are exploring partnership opportunities with other speciality care centres

DCDC Kidney Care

• DCDC is one of the most trusted institutions in Dialysis care delivery in Delhi / NCR and rapidly expanding to establish a wide network in all formats.

18

SK Soni Hospital

DCDC Kidney Care, north India’s biggest chain of dialysis centres, opened its first unit for Rajasthan at SK Soni Hospital, Jaipur. The modern unit consists of 15 dialysis machines with 24 hrs service facility to patients from Jaipur and adjoining towns.

4

• S K Soni Hospital is one of the super speciality hospitals in Jaipur with 225 beds. The hospital started its operations with super specialities in cardiology, cancer, nephrology and neurosurgery.

India’s first ultra luxurious birthing centre “cocoon” launched in Jaipur

19

5

•Cocoon hospital is an ultra luxurious birthing centre with seven star hospitality and high-end medical care. The hospital is equipped with all the modern pre and post natal healthcare facilities.

•Cocoon provides world-class medical facilities like modular operation theatres, LDR suites, Level 3 neonatal intensive care units, fully motorised imported medical beds and examination couch, 4D ultrasound technology.

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Jaipur city healthcare landscape