Big opportunity to grow in US market: IKS Health CFO Nithya Balasubramanian

Rakesh Jhunjhunwala-backed IKS Health sees significant opportunity in the US healthcare market, as the government pushes reforms aimed at reducing soaring healthcare costs

Rakesh Jhunjhunwala-backed IKS Health, which provides tech-enabled operational services to US healthcare organisations, sees significant opportunity in the US market as the government attempts to reduce healthcare costs.

 

IKS Health offers a range of technology-enabled operational services to US healthcare organisations, including clinical documentation, medical coding, revenue cycle management, and patient engagement. Essentially, the platform provides a one-stop solution, covering 16 distinct “chores” that physicians and hospitals currently manage.

 

Speaking to Business Standard, Nithya Balasubramanian, Group CFO at IKS Health, elaborated: “Physician organisations in the US typically generate revenues of around $1.5 trillion and spend approximately 15 per cent of their revenues on administrative tasks. Therefore, the total addressable market (TAM) is about $220 billion. Since we have also entered the acute care space, we can add another $40 billion, bringing the TAM to $260 billion.”

 

Of this, only $40 billion has been outsourced to digital solution providers like IKS Health, indicating a huge untapped market and significant growth potential in the US.

 

Total healthcare spending in the US stands at $5 trillion and is growing faster than GDP growth.

 

This makes the current system unsustainable, and the US is striving to reduce healthcare costs, starting with pharmaceutical prices and working to introduce more competition. They are also attempting to control hospital and physician group spending and increase efficiency in the healthcare system.

 

Balasubramanian explained that by outsourcing administrative tasks to players like IKS Health, healthcare setups can reduce their spending from 15 per cent of revenues to 10 per cent. “So, there is Day-1 savings of 5 per cent on the P&L, and over time, with improved efficiency, physicians can see additional patient volumes, generating another 5 per cent in revenue on the same fixed costs,” she said.

 

The outsourcing market is growing at around 12 per cent annually, and IKS Health hopes to grow faster than the market average. IKS Health posted revenue of Rs 740 crore in Q1 FY26, up 15.6 per cent year on year. The profit after tax (PAT) rose 58.7 per cent to Rs 151 crore.