The Hindu Business Line : Kick-start for rural hospitals a non-starter?

WILL corporate hospitals bite the Union Finance Minister, Mr P.Chidambaram's tax-bait and set up more hospitals in rural areas? Or does the bait come wrapped in some hard facts?

Despite lauding Budget 2004-05's vision to set up more hospitals in rural areas, healthcare industry representatives point out that hospital projects have a gestation period of five years. "Giving a 100 per cent deduction on profits for the first five years for 100-bed hospitals may not exactly spur activity in the sector, as new hospitals take as much time to make profits in an urban area. It will only take longer in a rural area," a healthcare industry representative told Business Line.

"There are about 50 cities in the country and the Budget should have encouraged hospitals in these centres to improve the quality of their services. There is a natural progression and people are not averse to travelling to the nearest city for quality treatment. While the skew towards rural infrastructure is good, urban healthcare institutions have been completely bypassed," observes Mr Ratan Jalan, CEO, Apollo Health and Lifestyle Ltd (AHLL).

A subsidiary of the Apollo Hospitals Group, AHLL supports a network of "neighbourhood" clinics across the country.

"We do have hospitals in regional centres. But the fact is, except for savings on the land cost, the economies of setting up a new hospital in a rural area is not easy. If one is looking at quality infrastructure, then the medical equipment needs to be taken across to the region and that is just as expensive a process," he points out.

"A beginning has certainly been made," points out Mr Vishal Bali, Vice-President Operations with Wockhardt Hospitals. But whether corporate entities in healthcare will go to more rural centres would depend on the region one is talking about, he elaborates. "To set up a good hospital in any area depends on the larger infrastructure, such as electricity and telecommunications, in the region," he feels.

The recent proposals in the Budget will be a good opportunity for regional nursing homes and small healthcare centres to upgrade themselves into larger quality healthcare institutions, Mr Bali observes.

More Stories on : Health | Rural Development | Medical Institutions & Hospitals

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page