The latest Crisil Ratings analysis of 98 private hospitals in India, accounting for nearly two-thirds of the sector’s revenue, projects a 14-15 per cent growth in FY2027. This is contingent on sustained occupancy and rising average revenue per occupied bed (ARPOB) due to a higher share of complex, high value treatments, like cardiology, oncology, neurology, gastroenterology and orthopaedics (CONGO). It is also projected that the share of insurance patients will improve due to GST exemptions on premia.
An expected Central Government Health Scheme (CGHS) rate revision will also improve viability for hospitals while decreasing out of pocket payments for patients. If this growth rate is achieved, it will be the fifth consecutive year of double-digit revenue growth.
Interestingly, the Crisil note also points out that there is now faster ramp-up of new facilities, (breakeven is achieved within 12-18 months compared to 3-4 years earlier) which is supporting operating margins. A major reason for faster ramp-up of new facilities is the shift in the expansion mix, from 60:40 (organic:inorganic) to 80:20, as large acquisition opportunities are now limited, with most remaining assets being smaller and regional.
As multi-speciality providers move their focus to CONGO areas, which give better ARPOB and also consider ways to reduce average length of stay (ALOS), this trend is making the case for single specialty care for treatments which do not need multi-disciplinary teams. A Bessemer Venture Partners report spotlights that single-specialty providers, like eye care, dialysis clinics, dental care, maternity care, and oncology clinics, among others, are projected to have a 22 per cent compound annual growth rate (CAGR), making it possibly the fastest-growing segment of India’s healthcare market.
India’s aging population and changing lifestyles is an important driver for this shift from the patient side. Importantly, the Bessemer report also projects an increasing ability to pay for specialised care, once again due to an increase in insurance coverage.
On the provider side, single specialty care calls for less upfront investments, and faster return on investments, attracting many doctor-entrepreneurs to these segments. Private equity has fuelled this surge, scaling up quality single speciality providers, and creating regional brands, growing them in time to national and even Asian brands, with a few of them having successful IPOs.
Given the relatively low capex, the surge in quality single specialty care has filtered from metros to smaller towns, with national brands acquiring smaller clinics in tier III and IV metros and scaling them up as per set protocols.
Given that both multi-speciality and single care facilities are pinning a sizable part of projected revenues on improving patient footfall due to increasing health insurance, insurers should take some cues from Aon’s first 2025 Insurer Wellbeing Benchmarking Report. The report underlines that compared to regional peers, India’s health insurance landscape reflects rapid digitalisation and expanding coverage.
However, the country still faces challenges in awareness, standardisation and affordability. Competitive pressures have reportedly led insurers (the report surveyed six insurers) and brokers to adopt data-driven plan design, embedded wellbeing services and cost containment strategies. Despite the increased market competition, only 50 per cent of insurers provided customisation support to clients with more than 1,000 employees compared to 92 per cent of insurers in China.
Perhaps one of the low hanging fruits that most insurers can take from the Aon report is on health screenings , which have low uptake and need integration. The report indicates that health screenings across Indian insurers show both untapped potential and current underutilisation. Although half of the surveyed insurers provide health screening services ranging from basic to comprehensive and specialist tests, employee uptake remains low to moderate.
While employees gain from early detection and prevention of disease, claims savings could be sizable for insurers. For instance, as per the Aon report, one insurer reported claims savings exceeding 5.1 per cent from health screening initiatives.
Yet another survey, this time by Care Health Insurance, flags disproportionately low levels of women’s personal health insurance ownership, despite the number of women proposers increasing steadily over the year. These stats highlight how women remain exposed to financial risks due to rising medical inflation rises and longer treatment journeys.
While insurers push for expanding coverage and gradually increasing premiums, it is only a matter of time before the insured ask for more from their insurance policies. Employers are in a unique position to advocate for health screenings but insurers must do their part too, in terms of incentivising health screenings, etc, and emphasising the win-win case for all stakeholders.
While all reports focus on the corporate growth of each sector, nothing will be achieved if India’s patients remain unable to pay for quality care, either due to inadequate awareness or low insurance levels. Thus creating patient awareness, ethically and responsibly, should be the first order of the day.
VIVEKA ROYCHOWDHURY, Editor
viveka.r@expressindia.com
viveka.roy3@gmail.com