FORTIS HOSPITALS

Presentation by: Hemant Vyas

INTRODUCTION• Fortis Healthcare Ltd. is one of the largest private healthcare

companies in India.• The company is having a network of 28 hospitals, satellite

centers and heart command centers with about 3300 beds capacity.

• It includes multispeciality as well as superspeciality centers providing tertiary and quartenary healthcare to patients in areas such as:

o Cardiac careo Orthopedicso Neuroscienceso Oncology ando Mother and child care.

VISION

The company intends growing in an aggressive manner to have a Pan India presence with bed strength of 6000 through 40 hospitals by the year 2012

ENVIRONMENT

AL ANALYSIS

POLITICAL/LEGAL Lower public expenditure

Public expenditure on health is lower than in other developing countries and hence, healthcare industry is dominated by private sectors.The government is also encouraging public private partnership

and promoting medical tourism. And also aiming to modernize the healthcare system.

For these reasons, India’s healthcare industry is anticipated to grow tremendously in the coming years.

DEMOGRAPHIC

More and more Indians are adopting sedentary life style leading to:

HypertensionDiabetesCoronary diseases.

Increased consumption of fast foods, alcohol.Adulteration of food itemsIncrease in life expectancy leading to more older

population which is prone to degenerative diseases.

ECONOMIC ENVIRONMENTGrowing Income• Much of the India’s healthcare expenditure comes from private

patients pockets.• The top 33% income earners in India accounted for 75% of total

price expenditure on healthcare in 2004.• But according to latest survey rising incomes are expending the

rich and middle income groups and they are expected to form 49% of total households in financial year 2010 as compared to 33% in 2004.

significant investment opportunities.by an estimate to reach even half of chian’s current beds

per 1000 population India would need an additional 9,20,000 beds over the next 10 years.

SOCI0-CULTURE ENVIRONMENT

Increased life expectancy and ageing population.life expectancy which averaged 63.3 yrs in 2000-04 is

expected to increase to 66 yrs in 2006-10.• The proportion of population aged 65 yrs and over in 2000 is also

on the rise and will increase by about 15% in 2010.Shift to life style related diseases• The shift in disease profiles from infectious to life style related

diseases is expected to raise expenditure per treatment

Particulars 2004 2005 2006 2007 2008 2009

Healthcare spending ($ bn)

34.9 40.4 45.7 52.1 56.0 60.9

Higher population and literacy.

• India has 2nd largest population in the world and it is estimated that by 2050 we will be having largest population in the world. This displays huge opportunity for health sector.

• There is huge urban shift in India of nearly 26%. Which greatly increases the size of target market for the private players.

• Literacy rate in India has increased to 52% making the people more aware and health conscious. So they are realizing the importance of hospitals.

GLOBAL & TECHNOLOGICAL ENVIRONMENT

Over burdened health infrastructure and high cost in the West.• The healthcare system in Europe & US are under severe pressure,

particularly NHS in the UK. Which has a long list of patients waiting for over a years. Same is the condition in US, further more there is shortage of paramedical professionals. India

India’s low cost of medical care in quality service.• India offers highly cost competitive medical treatment and

technological advancement. Which brings down the overall cost of treatment, thus India has huge potential to emerge as a hub for preventive health screening and treatment.

CONCLUSIONIt can be said that Indian environment provides a very

good opportunity for private players in healthcare. Growing population with much deeper pockets and low government participation has lead to higher demands where people are willing to pay even high cost for proper medical care.

PORTER’S FIVE FORCES ANALYSIS

Buyers’/Customers’ PowerThe growing Indian economy, rise of middle class,

growing awareness of health and fitness are the main factors which are increasing the demand for healthcare services in India. Still India falls woefully short on various healthcare key indicators.

e.g. life expectancy is still low. Indian hospital beds per 1000 population stands at a

little over 0.7, against world average of 3.96. So, most of the rich patients are going to foreign

countries for their treatment. Which costs an accountable loss to India’s healthcare industry.

SUPPLIER’S POWERDue to friendly government policy there is reduction in import

duties on medical equipment's, higher depreciation (40%), up from 25%) on life saving medical equipment and number of other tax incentives which in turn intensifying the competition among global firms into the medical equipment market place. Which eventually is beneficial for hospitals.

Low competition from public sectors.

Government spending on healthcare is estimated at only about 0.87% of GDP as compare to US & UK who spend up to 7% of GDP on healthcare.

THREATS OF NEW ENTRANT’SEncouraging government reforms.• The government is expected to pitch about 15-20% of additional

investment in healthcare. • Also the reformed government healthcare policies are trying to

attract both domestic as well as foreign investment. • 100% FDI in healthcare industry without prior approval.

THREATS OF SUBSTITUTE’SAlternative medicines.

Alternative medicine is a type of diagnostic technique in method of treatment whose theory develop from accepted methods. It includes Ayurveda, Homeopathy, Osteopathy, Physiotherapy and more.

The advantage of alternative medicines are that they are often save and effective. But disadvantage is that they are not tested for efficacy. Delay in seeking results is another common problem.

OPPORTUNITIE’S & THREAT’S OPPORTUNITIES

Medical tourismIndia’s low cost and new high quality healthcare services has promoted medical tourism. The medical tourism market in India is estimated at $333 million in 2004 & is predicted to reach $ 2 billion by 2012.

Huge market opportunity.A growing population, rising income levels, changing pattern of diseases, increasing demand for quality healthcare at affordable prices is expending the target domestic market along with international market.

THREATS

• Slow adaptation of ITIndian healthcare industry remained very slow in

adaptation of IT. Only few % of elite hospitals are using the well developed IT infrastructure. Therefore there is an urgent requirement for building of IT infrastructure to cope up with this problem.Emergence of China.

China is emerging as new low cost & quality healthcare destination for the individuals seeking medical care in wide range of medical specialties.

CONCLUSIONIn conclusion it can be ascertained that consumer have

very little power in India due to huge amount of demand and also the suppliers don’t have much power as there are quite a few manufacturer of medical equipment’s. Even then due to huge demand and medical tourism healthcare industry provides a tremendous opportunity in India.

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