Student Dissertation

Agency : Feasibility Study; 200 Bedded Hospital; Hospital Planning

Objective : General: To understand the feasibility for a hospital in thane market Specific ï‚· To assess the need of the area ï‚· To obtain demographics of the particular area. ï‚· To assess the Consultant Engagement Model. ï‚· To identify and analyze competitors market.

Background : In Thane, there is a 200 bedded hospital under construction, a global healthcare group wants to acquire it to enter the Indian healthcare market. Client wants PwC to do the feasibility study in Thane market and to understand the market potential for acquiring the hospital.

Methodology : ï‚· Study type - - A mix of primary and secondary research. Data analysis of the gathered data to arrive at the feasibility. • Area of study- Study will be conducted in Thane and nearby districts. • Data Collection method- Data will be collected through face to face interviews with multiple sources that includes doctors, administrators, equipment suppliers etc. through pre-designed structured questionnaire • Sources of Data- Primary data from doctors, administrators, suppliers will be collected Secondary data: Public domain • Sample Size – 2-3 doctors from each specialty will be considered • Sampling Technique Stratified sampling. Few physicians are selected from 5 key specialties for the study.

Findings : 1. Thane city has a high population growth rate as compared to Mumbai. From 2011 to 2015 thane has growth 2. rate of ~3.8%p.a.. Thane has bed to population ratio of 1.2 as compared to Mumbai (south Mumbai 8.3 and 2.2 Mumbai suburbs) , demonstrating a clear unmet demand for healthcare. 3. Thane private healthcare delivery market is sized at c. INR 25.4 billion 4. Number of quality beds in thane are 1435(Jupiter, Fortis Mulund, Bethany, Kaushalya, Vedant, Fortis Kalyan, Horizon, Platinum, Vertex Hopsital, Currae, Dr godboleHeart Centre, Titan Hospital, Ved Hospital, Bhivandi Kalyan) 5. Currently, Thane has a deficiency of c. 837 quality beds, which is poised to increase further considering the growing population of the target areas,280 beds would be added by the proposed hospital and surya hospital within next 1-2 years 6. Jupiter Hospitals is the only high end tertiary care hospital in the city of Thane with a corporate structure. In a short span of time, it has established itself as a clear market leader in terms of size and revenue by leveraging first mover advantage. 7. However, there is an established demand for quality beds in the target areas as the organised market is still in a very nascent stage. This unmet demand can be exploited by providers looking to offer high end tertiary care services (Oncology, Transplants etc.) as a differentiator. 8. Few hospitals like Sapphire hospital kalwa (multispecialty), Surya Hospital, Raptakos Brett Company (Paediatric Hospital), Dr Rajiv Chabra’s hospitals will commission in next couple of years. 9. There exists an unmet demand for radiotherapy services in Thane city because of lack of supply as well as projected increase in the incidence of Cancer cases due to low rate of detection and increased life expectancy. 10. Ghodbunder Road has been a key factor in changing Thane’s landscape, and has become a hub for premium residential complexes which attract upper middle class nuclear families. 11. Thane has good connectivity through road and railway. 12. Proximity to IT parks in Navi Mumbai also contributes to residential demand in Thane. 13. ~75% of the patient drainage of the major hospitals in Mumbai is from within the city. 13. Overall ~70% of the patients pay from out of pocket to meet their healthcare requirements Mumbai 1. Mumbai has ~46,000 hospital beds across public and private sector with overall 56% of bed distribution in South Mumbai 44% in Mumbai suburbs 2. The Mumbai private healthcare delivery market is sized at c. INR 135.3 billion 3. Mumbai’s tertiary care healthcare market is dominated by trust based hospitals viz. Hinduja, KDAH, Bombay Hospital, Lilavati etc. 4. In next 2-3 years Mumbai will have commissioning of following hospitals: Khubchandani Hospital, Juhu(400 beds), Suasth Hospital(400 beds), Kalamboli , KDAH, Kharghar(150-200beds) HCG Cancer Centre ,Borivali, Nanavati Hospital, Vile Parle, Narayana Health, Mahalaxmi(500 beds). Procedures 1. ~25,000 PTCA procedures are carried out in Mumbai every year; Bombay hospital & Jaslok are leaders amongst major hospitals. Annually Jupiter performs 600 PTCA procedures and Fortis Mulund performs 960 procedures. 2. The volume of CABG’s in Mumbai is ~12,000 per annum; Asian Heart Institute is the market leader amongst private players with 10% market share followed by Fortis Mulund. Jupiter performs 240 procedures annually which is low compared to that of market leaders 3. ~450 renal transplants are completed in the Mumbai annually with 19 registered centres among which KDAH, Global and Jaslok hospital lead the way 4. ~15,000 Joint Replacement surgeries are carried out in Mumbai every year; private sector does around 85-90% of overall volumes. With 1500 joint surgeries pa, Hinduja Khar is the market leader. Jupiter performs 300 joints annually. 5. ~12,000 to 14,000 neuro surgeries are performed in Mumbai every year. Bombay Hospital and Hinduja hospital are leaders with around 1700-1600 surgeries p.a. each while Jupiter does 300 procedures p.a. 6. ~200 to 240 liver transplants are performed in Mumbai every year, of which Global Hospital does ~50% of the cases 7. Mumbai with 22 LINACs does ~38,500 fractions per month on an average, TMH does the maximum volumes with 6 LINACs. Jupiter has a strong focus on onco with 2 LINAC’s doing 120-140 fractions per day. 8. Most of the hospitals in Mumbai operate on visiting consultant model 9. Newer entrants like KDAH and HN (Reliance Foundation), have opted to follow the full time salaried model 10. Hospitals with visiting consultant model allow doctors to take 90-100% of the OPD charge and the entire IPD doctor fee component to attract key consultants 11. Breach candy hospital, due to its reputation and brand image, has highest doctor fee component as compared to its peers.

Recommendations : ï‚· Go to Market Strategy  The hospital should have aggressive marketing, branding and communication strategies to establish itself.  The hospital could follow a competitive pricing strategy as per market benchmarks in the initial stages. ï‚· Consultant Engagement Model  The hospital should follow a mixed consultant engagement model, wherein there can be full time primary consultants across key specialities while other prominent doctors can be empanelled as visiting consultants.  The hospital will also have to consider empanelment with independent physicians and consultants with personal clinics for referrals. ï‚· M&A as a business model  Mumbai typically has a longer incubation period of 4-6 years due to the complicated regulatory compliances prevalent in local governing bodies which inadvertently delays the timelines of a greenfield project.  In such a scenario, acquisition of a newly commissioned facility will drastically reduce the time required for market entry. ï‚· Specialties to capture market share  In Oncology, there is a sizeable market opportunity for cancer care in Thane with gap of 2 linear accelerators  In transplants, there is an untapped opportunity for private sector, Thane has only Jupiter hospital, which does around 40 renal and liver transplants p.a.  Thane has around 5-6 Cath labs, around 130-150 PTCA procedures are performed in Thane  Jupiter hospital has the maximum volumes followed by Horizon hospital, Godbole Hospital & Vedant hospital  However, hospitals in Thane do not perform higher number of cardiac surgical procedures as compared to Mumbai hospitals. There is an untapped market which can be captured by developing cardiac sciences department.