The Hindu Business Line : Colour of healthcare is pink: Report

Bangalore March 24 The country's healthcare sector is booming like never before and looks set for major shifts as established players, investors and insurers rush in, according to KSA Technopak's first report on the sector.

The quarterly report just released here says SEZs (special economic zones) are expected to sizzle the healthcare sector, as these zones should have a 25-100-bed hospital each. With 75 SEZs approved and 225 waiting, this means an investment of $1.26 billion (Rs 5,670 crore) in five years for 18,000 SEZ beds alone.

The sector is expected to more than double by 2012 - from $35 billion (Rs 1,57,500 crore) to $75 billion (Rs 3,37,500 crore). In the last decade it was an inconspicuous industry run bya largely unorganised sector. Today, it has Apollo and Wockhardt; and evolved into a key economic growth driver attracting new entrants such as Reliance Healthcare, Apollo's Artemis Health Sciences; Dubai's EMAAR; Singapore's Parkway and Pacific Healthcare; Malaysian and US players.

PE FUNDS

A positive signal is the size of private equity deals it attracted in 2006: $467.89 million or Rs 2,105 crore put in pharma companies, hospitals and diagnostic chains. This is comparable to inputs into the automotive sector. Among them are George Soros' fund stake in Fortis; IDFC PE Fund in Manipal Health Systems; and ICICI Venture finance in HCG Global.

INSURANCE

Private or `out-of-pocket' payment are 75 per cent of the nation's healthcare spend. Current insurance players - Royal Sundaram; Tata AIG; Reliance; Iffco-Tokio; ICICI Lombard; Bajaj Allianz; HDFC Chubb and Cholamandalam - have 24 per cent of the market share. Pure health insurance companies getting in this year will add some sparkle. Swiss Re estimates the Indian healthcare premium potential to touch $7,700 million (Rs34,650 crore) by 2015.

"Private players in the voluntary health insurance sector saw spectacular growth in collections last year," the report says. "Health premium collected in 2005-06 registered 35 per cent growth over 2004-05. Private players registered 77 per cent growth and public players grew 25 per cent."

Expectations are also high that the Government will raise FDI limit in health insurance from 26 to 49 per cent; and lower the minimum capital requirement for players to $11 million. Which, according to KSA Technopak, would result in a surge of international players, offerings and spread to community and rural areas.

Another beneficiary would be the $2-billion medical equipment market, which should touch $18 billion in five years.

TOURISM DAMPER

The grey lines in Technopak's silver cloud are the dashed expectations on medical tourism into the country; and 7-lakh manpower shortage by 2010, although many doctors are returning.

"Despite all the hype, the actual number of patients coming to India is only a fraction of what Thailand, Singapore and Malaysia treat individually."

Last year, Thailand's Bumrungrad Hospital alone treated 4 lakh foreign patients and earned an estimated $170 million compared to 2.3 lakh patients expected across Indian hospitals.