Navneet Bali’s colleagues call him Commander Bali. A doctor by training and Narayana Hrudayalaya’s (NH) director of India’s northern region, he has a calm, almost zen-like demeanour. He attributes it to over three decades of service in the Indian Navy. In a matter-of-fact tone, he gets straight to the point. In March, NH commissioned a hospital in Gurugram, Haryana. It will be the group’s 24th hospital in the country. It could also be the last hospital that the group acquires or builds in India. At least for the next couple of years.
For one of India’s largest corporate hospital chains to stop expanding its reach in a country crying out for more healthcare is strange. After all, over a quarter of deaths in India happen for want of medical attention. But the reason is simple: the hospital business in India is just not as lucrative as it used to be.
The number of Indian patients paying for medical treatments in cash is dwindling every day, says Bali. These patients once formed the majority, with health insurance policyholders and government scheme beneficiaries paling in comparison. They ensured the lifeblood of a hospital—cash—flowed freely through it. But as more of them opt for health insurance or the government chooses health insurance for them, hospitals are feeling the pinch. Bali doesn’t see this trend reversing. It will only grow, he says.
As a result, smaller, standalone Indian hospitals have been looking to get acquired by larger chains who can absorb the cash flow shocks for a while. But even these larger chains are not immune to the crunch. Delayed and deducted payments from insurance companies are enough to help them operate and maintain hospitals. To help them survive. But they aren’t enough to let corporate hospitals thrive and expand. For this, corporate chains will have to explore other options.
Bali believes that the hope for Bengaluru-headquartered NH and other Indian hospitals is to get more cash-paying international patients. Or, alternatively, take healthcare to them by commissioning new hospitals abroad. The former has limits, as travelling to India for treatment is not viable for most people. A majority of patients in Africa, for instance, cannot afford to travel. With this in mind, Indian hospitals are increasingly looking to expand to developing countries in Africa and Asia.
The opportunity seems clear as day. There’s demand from people, doctors and governments. NH’s first experiment at this—a multi-specialty hospital in the Cayman Islands—has proved to be a raging success. Its optimised costs have left US healthcare providers insecure. Buoyed by this, the group is looking at more such endeavours. Meanwhile, Indian single-specialty hospitals like HealthCare Global Enterprises (HCG) are in the process of establishing a cancer care network in Africa, and private equity-funded Nephroplus is expanding its dialysis centres in Asia this year.