India, with an average of 9 hospital beds per 10,000 of its population, has a patchy public healthcare system with underfunded hospitals and clinics, and ineffective health-related schemes. The country needs 7 lakh additional beds over the next 5 years, indicative of an investment opportunity of Rs.1625 crore.
Hospital beds are expected to be packed with facilities that supplement the patient’s relief. The pervasive use for comforting patients in hospitals emphasizes the significance of growing hospital beds market in the world. Preference to highly equipped and facilitated hospital beds is a crucial driver for growth of the market. Additionally, beds designed in accordance with a specific group of patients being treated is also fuelling the expansion of the global market.
Healthcare facilitation at home for vegetative patients induces the consumption of hospital beds among common consumers. Electronic devices and other medical devices attached to the beds are also influencing the purchasing trends of hospitals around the world. Nonetheless, the costs at which such beds need to be produced and sold are hampering the growth of the hospital beds market, rendering marginal profits for the key participants. And implications caused by improper mobility, bed sores, and mechanical abrasion of hospital beds are also demoting their acceptance over relatively friendly or homecare beds.
The global hospital beds market is estimated at Rs.36,550 crore in 2016, and is expected to grow at a CAGR of 4.6 percent over the next 5 years. The market is expanding with growing geriatric population and increasing healthcare expenditure. In addition, the lifestyle changes are leading to chronic illnesses, due to the increased usage of caffeine, tobacco, and alcohol.
The market may be classified into the power used for facilitating bed movements, the usage of the beds, and the treatment incorporated with such beds. By usage, pressure relief beds, general-purpose beds, birthing beds, bariatric beds, and pediatric beds are the prominent ones. General-purpose beds segment is likely to be the largest and fastest-growing segment. With respect to power, hospital beds are manual (no power), electric, or semi-electric, with manual beds being the predominant segment. In terms of treatments associated with specific beds, the global market is also segmented into long-term care, acute care, and critical care treatments. Acute care treatments are projected to account for the largest share.
Europe is slated to dominate the global hospital beds market. Increasing healthcare expenditure in Europe’s medical industry has fomented consumers and healthcare organizations toward buying advanced and relatively expensive hospital beds. By 2020, Europe’s hospital beds market value will rise to Rs.12,865 crore from Rs.10,515 crore, in 2014, exhibiting a steady CAGR of 3.4 percent. Asia is also emerging, and at a rampant pace compared to Europe, primarily due to the vast expanse of its aging and geriatric patient demographics. Increasing amount of long-term healthcare facilities availed in North America are promoting its presence in the global hospital beds market.
Leading healthcare companies in the world are likely to have sub-divisional production of hospital beds. Healthcare and medical establishments replace their outdated or existing hospital beds by demanding advanced ones from the manufacturers. Getinge Group, Paramount Bed Co. Ltd., LINET spol. s.r.o., Stryker, ArjoHuntleigh, Hill-Rom Holdings, Inc., Medline Industries, Inc., and Invacare Corporation, among others, are recognized as some of the prominent players shaping up the competitive landscape of global hospital beds market.
Challenges and Opportunities
With a vast population base, India has a large patient pool existing in various urban, sub-urban, and rural areas. At present, the country has just 9 beds per 10,000 people, which is significantly lower than the global median average of 30 beds per 10,000 people as that of other developing nations such as Brazil, Malaysia, Vietnam, and Indonesia. While key metropolitan areas of the National Capital Region, Mumbai, Bengaluru, and Kolkata have a considerable number of hospitals each with 100 beds or more, there is a scarcity of such large facilities in the next tiers of cities across India. In rural areas, India’s bed density stands at two beds as compared to 25 beds in urban areas.
India requires 600,000 to 700,000 additional beds over the next 5 to 6 years, indicative of an investment opportunity of Rs.1625 crore. This presents a huge opportunity for hospital chains, in the process of capacity expansion not only in urban areas but in Tier-II and Tier-III cities as well. Given this demand for capital, the number of transactions in the healthcare space are expected to witness an increase in the near future.
Government efforts for improving healthcare services are enhancing emphasis on new hospital construction activity as well as renovation/upgradation of existing infrastructure, which in turn is expected to fuel demand for hospital beds.
Some major investments in hospital beds planned for enhancing the capacity of hospitals over the next couple of years. These include:
- The government plans to add substantial number of beds in the next 2 years as part of its efforts to ramp up tertiary care facilities across the country.
- Narayan Health plans to build low-cost heart hospitals across India with a collective capacity of 30,000 beds in the upcoming years. The chain has already commenced nine such low-cost heart hospital projects. One such project in Mysore with 300-bed capacity is likely to become operational in the next 3–4 months.
- Apollo Hospitals group is planning to invest Rs.650 crore in West Bengal over a 5-year period. This hospital will a have around 200 beds. The gastro-science and liver institute with 120 beds will be the first to come up.
- Virinchi Limited has expanded its footprint into healthcare sector by setting up a 600-bed super specialty hospital in up-market Banjara Hills, Hyderabad, at an investment of Rs.300 crore.
- The super specialty hospital to be built on the premises of the new Government General Hospital in Vijayawada will be completed by the next year. The hospital will be constructed at a cost of Rs.150 crore and will have strength of 240 beds.
- Camellia Group has announced its foray into the medical sector by setting up its first medical hub in Eastern India. The total investment for the project is estimated to be Rs.250 crore. The medical hub, Camellia Institute of Medical Science & Research, will have a 500-bed super specialty hospital.
- Ramesh Hospitals has tied up with Aster DM Healthcare to take telemedicine and emergency healthcare to Tier-II and Tier-III cities of Andhra Pradesh. The hospital is planning to invest Rs.250 crore over the next 3–4 years.
- Thumbay Group plans to invest Rs.100 crore in setting up multi-specialty hospitals in India. The group will be opening super specialty hospitals in Mangalore, Bengaluru, Mysore, and Mumbai shortly. The 250-bed Thumbay New Life Hospital has been set up with an investment of Rs.30 crore by taking over the existing New Life Hospital facility in Hyderabad. Another hospital would be opened soon in Jubilee Hills-Hitech City, Hyderabad.
- Thane will soon have a special hospital to treat epidemics. The proposal, backed by Thane’s guardian minister and mayor, will soon be passed in Thane Municipal Corporation. The hospital will have 100 beds and will be as per Indian medical standards. The hospital will be built at a cost of Rs.37.05 crore.
- The second phase of raising funds by Tata Medical Center’s oncology care hospital is likely to be operational by mid-2017. The phase, estimated to cost Rs.200 crore, will have 250 beds.
- Rainbow Group of Hospitals has drawn up a Rs.250-crore plan to set up one more hospital in Hyderabad, besides expanding its horizons to Chennai, Visakhapatnam, and Delhi over the next two-and-a-half years. The group, which currently has 750 beds spread across Hyderabad, Vijayawada, and Bengaluru, plans to expand its bed strength to 1300 of which 850 beds will be for Rainbow Hospitals and 450 for BirthRight, its new brand for perinatal services.
- King’s College Hospital, one of UK’s largest teaching hospitals, will soon set up a 1000-bed world-class medical facility in Amaravati, Andhra Pradesh, and make it their headquarters as they plan to set up 11 hospitals in different parts of India. A total of Rs.4.67 lakh crore investment has been promised by global investors in recent global investment conference held at Vishakhapatnam.
India is at the crossroads of an exciting and challenging period in its history. Making healthcare affordable and accessible for all its citizens is one of the key focus areas of the country today. The challenge is immense, as nearly 73 percent of the country’s population lives in rural areas and 26.1 percent is below the poverty level.
While on one hand, India lacks strong healthcare infrastructure, on the other, the country has several inherent weaknesses in its healthcare system. Private players today account for nearly 60 percent of all in-patient care, contributing to more than 70 percent of the bed capacity expansion in the last decade. At the same time, the public health system, which accounts for ~40 percent of the total bed capacity, is underutilized with a significant infrastructure deficit. Most of the organized private infrastructure is confined to the state capitals or Tier-I cities. Very few have made inroads in Tier-II and Tier-III cities. This presents the country with both a challenge and opportunity to not only increase the penetration of quality health services but also be the growth driver in these regions.
Though the costs involved in the complete upgrade of the healthcare sector are huge, there are enormous pay-offs in long-term investments in this sector. This will not only raise the quality of life for all but can also make the healthcare industry in India, a key enabler for economic growth.