Apollo earns Rs 18,700 daily on every hospital bed, up Rs 2,000 from the previous year

Even as Apollo Hospitals looks to raise funds through a qualified institutional placement (QIP) to expand bed strength, it is also maximising returns from existing beds.

The hospital's revenue per bed per day has increased by nearly 13 per cent – from Rs 16,620 in FY2010 to Rs 18,706 in FY2011 – on the back of better price realisation and acuity of cases.

Says Mr A. K. Krishnan, CFO, Apollo Hospitals: “We have been able to realise more than competition, especially in mature clusters like Chennai. We are also having a richer case mix and are doing more high-end complex work than earlier in cardiology, orthopaedics, transplants and neuro-sciences.”

International patients

The number of international patients has also increased, adding to the bed revenues as they opt for the highest end of care, says Mr Krishnan. In markets like Chennai, Delhi and Hyderabad, international patients account for 15 per cent of revenues, he adds.

Overall, it points to growth in healthcare insurance as people don't mind paying more for quality care since they are insulated from the final cost, observes Dr Rana Mehta, Executive Director, Healthcare Advisory, PricewaterhouseCoopers.

In 2010-11, Apollo Munich Health Insurance (a JV the Apollo group has with Munich Health Holdings) had a gross written premium of Rs 283.5 crore against full-year premium of Rs 114.7 crore in FY09-10.

“During 2010-11, the company surpassed its target in gross written premium by more than 40 per cent over the plan,” says Apollo in its latest annual report.

In FY2011, revenues from the hospital segment was Rs 1,929 crore (Rs 1,551 crore).

Outpatients up

The number of outpatients has also increased from 19 lakh in FY2010 to 23 lakh in FY2011. Mr Charu Sehgal, Senior Director, Deloitte Touché Tohmatsu: “An increased number of OPD patients for a hospital translates into potentially higher number of admissions (inpatients) and therefore increased income through diagnostics procedures.”

Revenue per bed day can be also improved by reducing average length of stay (ALOS) of patients so that there is better utilisation of resources as patients are discharged faster and newer ones come in.

But ALOS at Apollo has dropped only marginally by 0.01 per cent to 4.83 days in FY2011.

“Lower ALOS is not easy to achieve, though we have reduced it from 5.18 days three years back. It can go down to 3.5 days in 5-8 years,” says Mr Krishnan.

The bed-strength of Apollo Hospitals is 8,717, across 54 hospitals. In FY2011, hospitals owned by Apollo, its subsidiaries, associates and JVs handled 2.5 million patients.

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