Healthcare majors in spread plan

Three of the country's major private healthcare companies - Wockhardt, Apollo and Fortis -- have lined up investments worth Rs 1,850 crore (Rs 18.50 billion) for expansion, while a fourth one, Max Healthcare, is setting up a brain lab in Delhi at an undisclosed cost.

Indians spend around Rs 1,03,000 crore (Rs 1,030 billion) a year on healthcare. Wockhardt Hospitals has set aside Rs 500 crore (Rs 5 billion) for expansion and consolidation in the next 2-3 years.

"We have a site in west Delhi where construction is about to begin. It would be a 280-bed superspeciality hospital providing high-end services in cardiology and orthopaedics. The hospital would become operational by end-2007. Our 400-bed hospital in Bangalore would also provide superspeciality services in fields such as neurosciences, cardiology, orthopaedics etc," Vishal Bali, vice-president-operations, Wockhardt, told Business Standard.

The budget for the expansion is around Rs 500 crore (Rs 5 billion).

Apollo Hospitals is set to add 1,800 beds at an investment of Rs 350 crore (Rs 3.50 billion) in the next 18 months, to take its capacity to 9,000 beds.

Citing Apollo's plans, Suneeta Reddy, director (finance), said, "There is a plan for adding 800 beds through hospital management and another 1,000 beds via ownership route in the next 18 months."

Apollo had raised $135 million through an issue of global depository receipts (GDRs) a few months ago and it plans to penetrate tier-II cities through its chain of 'First Med' hospitals.

Max Healthcare is setting up the country's first 'Brain Lab' at Max Devki Devi Hospital, to be ready by January next. Fortis Healthcare is eyeing big-ticket acquisitions in Mumbai, Chennai and Gujarat.

Fortis is believed to have finalised a deal for a controlling stake in a Bangalore hospital, while another Rs 1,000 crore (Rs 10 billion) would go into an oncology unit in Medicity.

As companies look to expand, issues such as matching product capability to people capability and cost management are coming to the fore.

"We need to synergise clinical efficiency with operational efficiency to really uncork the value," said Kali Prasad, partner, risk & business solutions-health sciences, Ernst & Young.