Healthcare Sector Should Be Granted Industry Status For Sustained Growth: Vishal Bali

Healthcare sector is the largest employer in the country today and government should grant industry status to this sector as improvement of healthcare is fundamental to the growth of the economy, according to Vishal Bali, Conference Chairman, National Service Sector Conclave & CEO, Wockhardt Hospitals Group.

The National Service Sector Conclave which is scheduled to be held in Hyderabad on October 9, 207 with a theme as ‘Healthcare Services: Next Practices & Mantras for Survival’.

“As a fast growing economy we need to focus on the healthcare sector. Today, the healthcare expenditure in the country is 5.2% of India’s GDP and only 0.9% of its gross expenditure, which is the lowest in the world. For a long time the healthcare industry as been considered as an unorganized industry with doctors turning entrepreneurs. As a fast growing economy we need to focus on this sector, state Bali.

“There is a huge need for investments to improve access to basic healthcare and fill the shortfall of approximate 800 thousands beds in the country,” he added.

Emphasizing the role of CII IQ, According to S.K. Kakkar, Head, CII Institute of Quality, said, “The upcoming conclave aims to bring together different voices from the industry so we collectively can take measures to not only improve the quality levels and provide healthcare services to a large section of society at an affordable cost.”

“Development of States is closely linked to the growth in literacy levels and overall wellness levels of the country. A shining India needs to focus and improve both these requirements to surge forward,” he added.

The conclave chairman Bali also highlighted the role of accreditation in the industry. He said, “With the launch of National Accreditation Board for Hospitals (NABH). There is now a benchmark. India needs to move aggressively towards achieving these levels of quality in the primary, secondary and tertiary segments. This should be done across the spectrum of healthcare development in the country. We should be able to penetrate the entire spectrum of the sector.

“Good managerial practices, which have been very successfully deployed in industry, need to be applied to healthcare.

(Ref: The Chronicle Pharmabiz dated October 11, 2007)

Healthcare Outsourcing Cos On The Prowl In US, Europe

It isn’t just the domestic pharma companies that are on the prowl to acquire overseas companies. Healthcare outsourcing firms such as Helios & Matheson, Apollo Health Street and Globerian are in talks with companies in the US and UK for buyouts and hope to seal $20-100 million deals by early next year.

Chennai-based Helios & Matheson is in advance talks with two companies, one each in Belgium and France, and expect to close a $50-100 million all-cash buyout by March next year. “The company has a cash reserve of Rs 85 crore and the rest would be raised through internal accruals and debt. We plan to complete the transaction in three phases spanning two years,“ says Helios & Matheson MD GK Muralikrishna. The company, which develops and provides customised healthcare technology and services, recorded Rs 395 crore in revenues last year.

As the cost of healthcare services mount in the US and European countries, hospitals and pharma companies are increasingly outsourcing their back office and IT services work to Indian firms. According to estimates, the healthcare outsourcing market in the US alone is around $75 billion and Indian firms have so far just scratched its surface. Also, there are only a few outsourcing firms in India which specialises in healthcare services.

Delhi-based Globerian, with a turnover of $30 million, is also in talks with a few companies in the US and expects to close two deals next year. “We plan to do two acquisitions in the US ranging between $10-20 million each. There are many PE firms keen to invest in the company and we can also use our own resources,” said Globerian CEO Naveen Trehan.

Apollo Health Street (AHS) is also considering various proposals from many European companies. Apollo Group chairman Prathap C Reddy recently told ET that the company plans to tap the huge back-office work of private equity (PE) firm Apax Partners which runs the largest hospital chain in Europe. Private hospitals in the UK spend about 5-7% of their revenues in back-office work.

These healthcare outsourcing companies are not restricting  their growth plans to inorganic route alone. While Globerian plans to increase its headcount to 2,500 from 1,300 by the end of next year by getting new clients, Helios Matheson wants to grow its employee strength from 1,600 to 3,000 by 2009. In addition, the company is setting up a special economic zone near Chennai with a 500 seat capacity that can be scaled up to 3,000. AHS also plans to add 2,000 seats in the next couple of years.

(Ref: The Economic Times dated November 9, 2007)