As India's growing middle class clamors for better medical attention outside the nation's cash-starved public hospitals, Fortis Healthcare Ltd. has come up with a prescription: a rapid expansion of its private hospital chain.
Indian health-care consumers, sick of long waits at sometimes-grungy clinics, have embraced the upsurge in clean, efficient and professionally managed hospitals. Also, recent health scares over everything from mosquito-derived Dengue fever to swine flu have crowded public hospitals, pushing even more patients through the sliding doors of Fortis's private facilities.
"India's problems have given us an opportunity to put together a damn good health-care network," said Shivinder Singh, managing director of Fortis.
The latest deal came Monday August 24th when Fortis agreed to buy 10 hospitals for 9.09 billion rupees ($187 million). The purchase from Wockhardt Hospitals Ltd. gives Fortis 75% more hospital beds and a reach into big cities outside northern India -- including Mumbai, Kolkata and Bangalore. With the acquisition, Fortis will own or operate 38 hospitals across India with 5,200 beds, company officials said.
Fortis earlier this year bought or assumed management of four other hospitals in its effort to expand nationwide from its origins in northern India. Apollo Hospitals Enterprise Ltd. is the nation's biggest private chain, with 7,500 beds and 43 hospitals.
Fortis's expansion reflects India's changing health-care picture. India's urban middle class has turned the medical-services industry upside down by demanding better care than the government can provide -- and than the vast majority of the population can afford. Only about 12% of Indians have health insurance, according to industry analysts. But with the number of policyholders covered by the private health-insurance industry growing about 40% a year in India, many more eventually will be able to afford to pay more for services here.
"Indian health care is on the threshold of tremendous reform and expansion," said Muralidharan S Nair, a health-sciences partner at Ernst & Young.
Until recently, most of India's private hospitals have been products of yesteryear -- small, stand-alone institutions founded by individual doctors. The rise of the corporate hospital chain gained momentum only in the past five years as India has boomed. These chains are buying hospitals or winning contracts to manage them. Often, the chains replace physician chief executives with professional managers who standardize business practices and buy supplies in bulk across the chain to drive down costs.