India's Healthcare Expansion: Boost in Hospital Beds Amid Rising Demand

India's healthcare sector is set for significant expansion with the addition of 22,000 new hospital beds over the next 3-5 years. Driven by lifestyle diseases and a growing aging population, demand for affordable healthcare continues to rise, ensuring no oversupply of hospital facilities.

The healthcare market in India is witnessing a steady growth driven by the rising incidence of lifestyle diseases and a pressing need for affordable healthcare. A recent report by HSBC Global Research indicates that seven listed hospitals are planning to add 14,000 beds in the next 3-5 years, contributing to a total of 22,000 new beds when including other private chains. This marks a significant increase compared to the 4,000 beds added between FY19-24. Most hospitals are in a consolidation phase and eyeing expansion opportunities, buoyed by profits accumulated from FY19-24 due to low capital expenditure.

Despite these additions, the report suggests no risk of oversupply. The forecast shows a sustained high demand for hospital beds fueled by the growing incidence of lifestyle diseases and the rising demand for affordable healthcare services. WHO data supports this outlook, revealing that India has only 16 beds per 10,000 people, a stark contrast to figures from developed and emerging markets.

Factors such as an aging population, better healthcare insurance penetration, rising income levels, and increased prevalence of lifestyle diseases are expected to drive the demand for healthcare. According to the report, India needs an additional 100,000 beds in the next 5-7 years to meet its healthcare demand, particularly due to a surge in non-communicable diseases like diabetes, cardiac disorders, and cancer. Seven listed hospitals have already earmarked capital for projects that will add over 22,000 beds in the next few years.

Additionally, India remains a sought-after destination for medical tourism thanks to high-end clinical procedures available at relatively lower costs compared to countries like the U.S., Singapore, Korea, and Thailand. Ministry of Tourism data indicates that medical tourism has grown from 0.18 million in 2014 to an anticipated 0.73 million in 2024.

Financially, hospitals in India have experienced a significant increase in earnings, with average revenue per occupied bed (ARPOB) rising between 7-15 percent from FY2019-24. Post COVID-19, hospitals have seen an uptick in occupancy rates, and advancements in operational efficiency and technology are poised to drive hospital revenues in the mid- to high single-digit range for years to come. Notably, the share prices of listed hospitals have surged by 55-200 percent over the past three years (ANI).

(With inputs from agencies.)