US private equity major Blackstone announced late last month it is acquiring a majority stake in Care Hospitals with an expansive footprint over Central India. Separately, the latter signed a definitive agreement to acquire a majority stake in KIMSHEALTH, a Kerala-based quaternary care hospital group in what would be Blackstone’s first investment in India’s healthcare services sector.
KIMSHEALTH will continue to be guided by founder and Chairman and Managing Director MI Sahadulla. Home-grown PE firm True North will sell its entire stake in KIMSHEALTH India as part of the transaction, Blackstone had said in a release without mentioning financials of the deals as reported by businessline on October 30.
Speaking to businessline, Sahadulla said permitting partial foreign ownership, rather than complete control, ensures domestic interests are not entirely overridden. It also encourages local investors and helps retain some control in the hands of the native population. “Once a PE, Always a PE-kind of situation should change,” he explained in an interview. He called for a balanced approach that welcomes foreign investments while safeguarding domestic interests; leverages technology for efficient healthcare delivery and public private participation (PPP); and promotes larger play in global health.
How do you assess the approach of the Centre towards boosting hospital infrastructure?
Allowing 100 per cent FDI in hospital infrastructure under the automatic route can be a contentious issue. On one hand, it can attract foreign investments, potentially leading to rapid infrastructural development. On the other hand, it raises concerns about control and accessibility, with foreign companies likely dominating the healthcare sector. Striking a balance, perhaps by allowing foreign investment up to a certain limit, could mitigate these concerns.
What are the prospects of job generation in the healthcare sector?
Investments hold immense potential for job generation in India, primarily due to the industry’s labour-intensive nature. Every rupee invested in the sector can create jobs not only within healthcare facilities but also in related sectors such as pharmaceuticals, medical equipment, and support services. If these investments are coordinated effectively, healthcare is poised to become the third-largest employer in India by 2030. A recent report suggests that with a strategic investment of $217 billion in healthcare and allied sectors, India has the opportunity to generate a staggering $774 billion in revenue and create 12 million jobs by 2030.
Does experience from G20 sessions open up new vistas in health diplomacy?
The G20 discussions have highlighted the progress in healthcare; however, one area that remains overlooked for diplomacy is healthcare. Health diplomacy has the potential to be a game-changer. India, with its extensive experience in healthcare and pharmaceuticals, can initiate collaborative efforts with other countries, particularly developing nations, to enhance healthcare infrastructure and services. By sharing expertise, technology, and resources, we can elevate our global standing in the healthcare sector, potentially surpassing China without much effort.
How can private hospitals contribute to efforts to reduce out of pocket expenses?
One effective method is the establishment of public-private partnerships (PPPs), where private hospitals collaborate with the government and insurance companies, and can provide cashless treatment. By participating in government healthcare schemes, private hospitals can expand their reach to a larger population.
However, a common challenge faced by is the low reimbursement rates offered by these schemes. It is crucial to reevaluate and adjust these reimbursement rates to ensure that private hospitals sustain services without compromising on the quality of care. The Average Revenue Per Occupied Bed (ARPOB) in Tier 2 and 3 cities is already considerably lower than that in Tier 1 cities. To enhance accessibility further, there is a need to reconsider the existing rules governing these partnerships. This, in turn, will enable private hospitals to expand services reach out to more people, and reduce out-of-pocket expenses for individuals seeking quality healthcare.
How do you view the play of AI, wearables, IoT and other mobile technologies in healthcare?
While healthcare has traditionally been slower to embrace innovation, the landscape has witnessed remarkable advancements, especially in the wake of the COVID-19 pandemic. It acted as a catalyst for healthcare innovation, leading to notable progress in a relatively short span of time. AI can assist in diagnostics and predictive analytics; wearables can monitor patients remotely; and IoT devices can enhance healthcare infrastructure efficiency. India needs to invest in research and development to fully harness these technologies. By leveraging technology, we can improve the quality of care, reduce costs, and increase access to healthcare services.