Chairman and Managing Director's Message
As we prepare this year's Annual Report the world is confronting one of the greatesthealth challenges of a generation with COVID-19 (coronavirus) sweeping across the globe.
At the same time this year will go down in history not just for the pandemic but forthe many ways in which people are choosing to come together and support each other. Theselfless acts of essential services workers and several other groups reassure us thathuman spirit will eventually emerge triumphant. At Shalby we are humbled to be part ofthe healthcare industry that directly and powerfully affects the lives of so many. Inthese difficult times we reaffirm our commitment to protecting public health andsupporting the government in its battle to overcome this crisis.
The outbreak of the pandemic has reiterated the necessity for countries to invest inadequate and effective healthcare infrastructure. In India especially stepping uphealthcare allocation is a pressing priority as our average healthcare spend per person isamongst the lowest when compared to other countries. Additionally our bed-populationratio is nearly 1:1000 against the World Health Organisation's (WHO) recommendation of3.5 beds per 1000 people.
Recognising the gaps in the healthcare sector the government aims to double its publichealth spending to 2.5% of the GDP by 2025 from 1.28% currently. In line with thisobjective the Union Budget 2020-21 increased healthcare allocations by 3.9% over theprevious year's outlay to Rs. 671120 million. Allocation for AyushmanBharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) the largest government-fundedhealthcare insurance programme in the world was increased by 100% to Rs.64000 million. AB-PMJAY has the potential to provide cashless coverage to around500 million people at the empanelled public and private hospitals. Additionally thegovernment has also announced that the AB-PMJAY scheme would be expanded by setting upmore hospitals in the Tier-2 and Tier-3 cities under the public-private-partnership (PPP)route. The allocation of higher outlays and the launch of more targeted initiatives havethe potential to make way for significant scale-up in the sector.
During the year under review I am pleased to share that at Shalby Hospitals we onceagain delivered on our promise of meeting the expectations of our patients andstakeholders. We registered commendable growth both operationally and financially thusaccelerating our journey towards making quality healthcare available within the reach ofthe common man. Our revenues stood at 5042 million in FY 2019-20 as against 4706million in the previous year while Profit Before Tax for the year stood at 567.25 millioncompared to 503.88 million in the previous year. Both in-patient and outpatient countsrecorded a substantial increase over the previous year reflecting our unwavering patientfocus approach. The growing trust for our services was also evidenced in the fact that weperformed over 19835 surgeries during the year.
In pursuit of our vision to exceed expectations in health we continue to take bold andunique measures. During the year we emphasised more on homecare services to deliverefficient high quality treatment and care in the comfort of our patients' homes. As partof this offering medicines diagnostic solutions medical equipment and medical servicesreach patients at their homes instead of them having to step out. Our homecare serviceshave been tremendously beneficial for patients needing medical help at the time of thenationwide lockdown. Another important development was the expansion of our orthopaedicservices to newer geographies through an asset-light model at partner hospitals. At thesehospitals our orthopaedic team of doctors provide their expertise to drive excellentpatient outcomes. By pairing our world-class orthopaedic capabilities with an asset-lightexpansion model we envision an opportunity to scale our niche segment to newer heights.
We are also strengthening expertise across a wide range of specialities beyondorthopaedics with the aim to position Shalby at the pinnacle of healthcare provision inIndia. We now offer tertiary care services in areas such as cancer managementneurosurgery cardiac surgery urology and organ transplants among others. Our commitmentto provide superior quality and personalised service within the context of affordabilitywill be a strong growth driver for these clinical areas as well. Towards this end we areinvesting in our capabilities and hospital infrastructure and equipment with the objectiveof developing the best surgical resources. Our excellent reputation enables us to attracthighly qualified healthcare professionals in multiple areas of operation thus ensuringthat the patients receive the highest standard of care.
A truly distinguishing feature of Shalby's healthcare services is our multidisciplinaryapproach for delivering better patient outcomes. Our specialists from different domainslook at the unique needs of each patient and the most effective treatment is identified onthe basis of our collective opinions insights from outcome studies and wealth ofexperience. The strong culture of collaboration that we foster internally enables us toexcel in taking care of our patients. Documentation of clinical records as per globalstandards is an integral aspect of the way we operate to ensure continuity in patientcare especially important in the current environment where many different healthcareprofessionals are involved in the treatment of a single patient.
At Shalby with delivery of world-class services at affordable costs being our greatestdifferentiator we continue to make every effort to optimise our operational model. Theimplementation of advanced Hospital Information System (HIS) which provides automatedclinical electronic medical records (EMR) to be rolled out at all units by FY 2021 andSAP ERP to be rolled out at all units by FY 2022. These technology initiatives furtherempower us to improve patient outcomes and deliver cost-effective care. Further our fourmature hospitals which have been operating for more than six years are consistentlydelivering superior performance across key metrics. As operations at our new and recenthospitals stabilise we are confident they will mirror the performance of our maturedunits.
Our medium-to-long term growth expectations continue to be supported by strong industryfundamentals. High incidence of non-communicable diseases higher levels ofinsurance penetration and increasing levels of awareness of the benefits of good healthand wellbeing are expected to drive a double-digit growth rate for healthcare servicedelivery over the next decade. We have two upcoming hospitals in Maharashtra across Mumbaiand Nashik to enhance our patient access. Of these the Nashik hospital by FY 2022 and onefacility at Mumbai by FY 2023 are expected to be operational. Further our net cashsurplus balance sheet and low-cost expansion model set the stage for continued growth andserving more patients.
In closing delivering efficient high quality care and clinical outcomes for patientsin each of our hospitals across the country and at our outpatient clinics in India andabroad will continue to be a priority for us. Moreover through our strategic initiativesand focussed efforts we will work to be the trusted provider of choice for doctors apositive contributor to the industry and a strong partner to the government as they seekto reform and deliver healthcare services. I would like to take this opportunity to extendmy sincere appreciations to our entire medical team and all other employees and ofcourse to you our shareholders for being the pillar of strength and support that hasmade our rewarding and satisfying journey possible.
Dr. Vikram Shah
Chairman and Managing Director