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CRISIL SME Tracker: Ayushman Bharat a shot in the arm for MSE hospitals

CRISIL expects micro and small enterprises (MSEs) in the space to play an important role in implementing AB-NHPS

Business Standard 

Health care needs a digital transformation

The Ayushman Bharat-National (AB-NHPS), expected to be rolled out soon, will boost the fortunes of secondary care hospitals in smaller cities and towns.

Around 25 states and Union Territories have signed up to implement the scheme, which was announced in the Union Budget for the current fiscal year.

will provide pre- and post-hospitalisation cover to economically challenged families in both public and empanelled private secondary and tertiary care hospitals.

More than half of the hospital beds in India are in the private sector, and expects micro and small enterprises (MSEs) in the space to play an important role in implementing

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has rated more than 200 secondary-care MSE hospitals, of which 70 per cent are in Tier-II cities and smaller towns. Their average capacity is 70-90 beds and their annual revenue is less than Rs 100 million apiece.


CRISIL SME Tracker: Ayushman Bharat a shot in the arm for MSE hospitals

have been doing well because of lack of quality care and infrastructure in public hospitals, and limited access to tertiary care.

CRISIL’s analysis shows that hospitals in Tier-II cities and small towns had an average operating margin of 22 per cent, compared with 19 per cent for peers in metros and Tier-I cities. Their net profit (PAT) margins were also higher. This is driven by relatively higher in-patients and bed occupancy rates.

believes the government will tap such hospitals to make a success, which will require them to improve both bed capacity and infrastructure.

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Given their healthy average gearing of 1.1 to 1.4 times, good profitability metrics and assured patients under AB-NHPS, will have the flexibility to raise and service debt.

That, in turn, will provide ample opportunities for both investors and lenders.

First Published: Tue, July 24 2018. 21:38 IST
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