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Hospitals: Medical tourism regains momentum; to bolster payer/case mix

ICICIdirect Research 15 Sep 2022 DISCLAIMER

What's Buzzing? 

After a long Covid-induced hiatus, hospitals in metros and Tier 1 cities with tertiary and quaternary care are reporting sustained growth in international patients. The footfall has reached almost 90% of the pre-Covid level as per latest management comments from major hospitals. 

Context 

According to Ministry of Tourism, pre-Covid medical tourists in India grew at a CAGR of 20% over 2009-19 from 1 lakh to 6 lakh tourists. India stands out among traditional medical tourism corridors such as South East Asia, the Middle East, Caribbean America, etc, due to world-class global standard medical treatments at ~40-50% discount to South East Asian medical economics and ~75-80% discount to Western world medical economics, JCI accredited world-class hospitals, skilled medical professionals and nurses. Travel bans for the last couple of years due to Covid-19 resulted in lower influx of medical tourists. According to the Tourism Ministry, India registered de-growth of 79.4% over 2020. 

Our Perspective 

We expect a further improvement in the international patients' component in the overall hospitals payee-mix (~10% pre-Covid average) as besides structural advantages, India is also well poised with resilient macros coupled with stable geopolitical quotient. A countrywide vaccination drive and good response to the same has put India among the most vaccinated large countries with 69% fully vaccinated population (global average- 63%), an important criterion for foreign travel. Large format-multispecialty hospitals in tier-1 cities like Max Healthcare, Fortis and Apollo Hospitals are likely to be the direct beneficiaries incrementally while Narayana Hrudayalaya, Aster DM, Healthcare Global and Shalby have also indicated an increase in share of international patients.

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