SME hospitals in crisis: Report

As India aims to increase its healthcare spending from its current 2.4 per cent of GDP, SME hospitals will play a crucial role in expanding access to quality healthcare. Their success in navigating current challenges while capitalizing on emerging opportunities will significantly impact India’s progress toward universal health coverage, states a report “Hospitals for Bharat” by LoEstro Advisors, an Investment banking and consulting firm and Medium Healthcare, a healthcare consulting firm.

The report is the first in-depth analysis of India’s Small and Medium Enterprise (SME) hospital sector, revealing both an impending crisis and untapped opportunities in India’s healthcare delivery system. The report states while SME hospitals deliver 60 per cent of India’s healthcare and account for over 90 per cent of hospital beds, they face mounting pressures that threaten their sustainability. This comes at a time when India’s healthcare spending remains at a concerning 2.4 per cent of GDP.

“SME hospitals are the unsung heroes of Indian healthcare, especially in tier 2 and 3 cities,” Rakesh Gupta, Managing Partner at LoEstro Advisors, said. “Yet they operate with 40 per cent lower revenue per bed compared to large chains while managing longer patient stays and higher operational costs. Our report is an endeavor to help these hospitals to survive and thrive through the challenges by providing practical advice.”

Ratan Jalan, Managing Director at Medium Healthcare, adds, “The squeeze on SME hospitals from both premium chains is a brewing healthcare access crisis. As large chains focus on metropolitan areas, SME hospitals remain crucial for delivering affordable care to millions of Indians who need quality healthcare in close proximity”