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Crisil SME Tracker: Ayushman Bharat a blessing for SME hospitals

Business Standard/ 10 Jun 19 | 06:57 PM

Ayushman Bharat — Pradhan Mantri Jan Arogya Yojana — which completed 250 days at the end of May (it was launched on September 23, 2018), has proved a good augury for the highly fragmented small and medium enterprises (SMEs) in the hospital segment. 

The scheme has helped improve health care penetration in terms of both number of people covered and amount of health care assurance, with nearly 15,224 hospitals empanelled and nearly 26 lakh treatments sought so far.

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Significantly, around 49 per cent of the hospitals empanelled under the scheme are private ones, which together account for about 64 per cent of the admissions.

But more significantly, SME hospitals (small private hospitals and nursing homes) account for the bulk of the treatments at private hospitals, as major hospital chains have so far refrained from empanelling. 

It is expected that big private hospitals and hospital chains will closely monitor package rates and the time taken in reimbursement of treatment costs before boarding the scheme. Also, the keenness of private players to adopt a business model based on volume-driven affordable provision of health care services depends on how financially viable they find the prospects to be.

Given this, the scheme is likely to see overall SME hospital revenue log a compound annual growth rate of 12-13 per cent between fiscal years 2019 and 2021, compared with 10-11 per cent between fiscal years 2017 and 2019.

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