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Apollo Hospitals is looking to reach 70 per cent occupancy levels in its core hospital business by the end of FY24 from the current level of 64 per cent.
“We are on track to improve hospital occupancy to 70 per cent by the end of FY24,” Suneeta Reddy, MD, Apollo Hospitals Enterprise Ltd., said in the company’s Q4 earnings call.
She added that higher occupancy will come from a combination of factors, such as an increased focus on international patients, reducing reliance on institutional patients, recruitment of more doctors, and by improving the payer mix.
Also read: Apollo Hospitals stocks hit 52-week high after strong Q4 results and positive market sentiment
Growth levers
Reddy said the recruitment of new doctors is happening across the system. The second lever of growth will be Apollo 24/7, the company’s omnichannel business, which increases patient flow. The third lever, Reddy said, will be leveraging Apollo Hospitals’ corporate relationships and international business.
“Finally, for Tier 1 cities, international patients currently were at about 7 per cent. We are moving this to 10 per cent, so that should add another 3 per cent in terms of occupancy,” Reddy said.
Apollo Hospitals’ occupancy increased from 63 per cent (7,875 operating beds) in FY22 to 64 per cent (7,860 operating beds) in FY24. Of which, occupancy at mature hospitals stood at 65 per cent, while new hospitals had an occupancy of 61 per cent.
Also read: Apollo Hospitals reports 400% increase in robotic-assisted procedures
Improved ARPOB
Reddy said the healthcare group has reduced the number of institutional patients, which has slightly affected the occupancy but improved the average revenue per occupied bed (ARPOB). “Currently, if you look at our payer mix, 45 per cent is retail and another 45 per cent is private insurance. So that is really going to contribute to an increased occupancy,” she added.
Apollo Hospitals’ ARPOB went up 14 per cent year-on-year to ₹51,668 in FY23. In Q4FY23, its ARPOB stood at ₹53,232.
Reddy also announced that Apollo Hospitals will add 2,000 more beds by FY27 by adding newer hospitals close to around 700 new beds every year after 2024.
“We continue to look at brownfields, and we continue to look at acquisitions,” she added.
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