Single-treatment hospitals carve out a niche market

Amidst the traffic-heavy Corporation Circle in Bangalore lies a hospital offering various high-end treatments and services for different types of cancer.

Unlike Manipal Hospital some 8 kms away or Apollo Hospital a good 13 kms ahead, which offer treatments for everything from heart to brain to kidney to liver, this hospital, HealthCare Global, caters to only cancer patients.

Like HealthCare Global, quite a few hospitals, much smaller in size than the Fortis’ and Apollos’ and catering to only one therapeutic segment, are sprouting across India’s $40 billion healthcare market.

One of the advantages of uni-specialty hospitals is that they are easier to run and manage, said S Natarajan, chairman and managing director, Aditya Jyot Eye Hospital in Mumbai.

“Unlike multi-specialty hospitals, we have a team focused on one segment — like in our case, heart and lung — though we also have visiting consultants in case of complications,” said KK Sethi, chairman of Delhi Heart and Lung Institute.

The greatest advantage of uni-specialty hospitals is that we can master the delivery — the entire environment and the organisation is geared to take care of the patient, said Dinesh Madhavan, director, marketing, HealthCare Global. “It also helps in creating a position as the leader in the segment quicker.”

Industry experts say that, unlike multi specialty hospitals, there are less hassles of admissions, billing, etc in uni specialty hospitals.

“As these hospitals attract referral cases, the billing is higher. As patient flow and duration of stay is predictable, the occupancy rate is higher,” said Abhishek Sharma, vice-president and head of life sciences at investment banking firm, MAPE Advisory Group.

According to Ankur Bharti, consultant, Technopak, average margins are much higher for uni-specialty hospitals. “For an eye hospital, it could be 30-50%, while it could be 25-28% for heart and 19-20% for cancer hospitals. The margins are high as they are mostly surgery driven,” said Bharti, adding that uni-specialty hospitals also need less manpower, equipment, land, and infrastructure.

Experts say, though in the immediate future, multi specialty hospitals will continue attracting majority of investments in healthcare, about 15 years later, uni-specialty hospitals will whisk maximum investments.

“This would be in line with increasing health insurance and the resultant demand for increasing efficiencies and complete coverage. Heart, cosmetology, cancer, eye, maternal and child health are segments which could see a rise in uni-specialty hospitals in the future,” said Sharma.