Private Hospital Chains Announce Major Expansion Plans for FY25 Amid Rising ARPOB

In a robust response to the growing demand for healthcare services, India’s top private hospital chains have unveiled ambitious expansion plans for FY25, following a notable increase in the average revenue per occupied bed (ARPOB) per day during FY24. This strategic move comes as hospitals report significant growth in ARPOB figures, indicating a healthy uptrend in the sector.

Max Healthcare, a leading name in the industry, has announced substantial capacity additions for this financial year. The hospital chain plans to add 300 operational beds in Dwarka by June 2024 and expand bed capacity at its Lucknow and Nagpur units by December. Similarly, Fortis Healthcare aims to bolster its infrastructure with approximately 700 new beds. Apollo Hospitals Enterprise is set to lead the expansion race with plans to add 1,170 beds in FY25, as disclosed in its fourth quarter of FY24 investor presentation.

The surge in bed capacity is directly aligned with the impressive ARPOB growth reported by these hospitals. For the entire FY24 period, Max Healthcare recorded a 12% increase in ARPOB, reaching US$ 910.16 (Rs. 76,000) per bed per day, up from US$ 802.38 (Rs. 67,000) in FY23. Apollo Hospitals Enterprise and Fortis Healthcare also reported robust growth in their ARPOB figures, with year-on-year increases of 11.3% at US$ 688.47 (Rs. 57,488) and 10.7% at US$ 729.17 (Rs. 60,887), respectively.

Analysts attribute this ARPOB growth to several factors, including an improved specialty and case mix, a better payer mix, and a healthy recovery in the footfall of international patients. The increase is also linked to higher surgical volumes and a rise in high-end procedures, indicating a positive trend in the healthcare sector. Furthermore, price revisions and increased revenue from international and upcountry patients have played a significant role in boosting ARPOB, showcasing the sector’s robust performance amidst ongoing challenges.

This expansion by India’s leading private hospital chains underscores their commitment to meeting the rising demand for quality healthcare services. With analysts forecasting a further 5-6% increase in ARPOB per day for FY25, the sector appears poised for continued growth and enhanced service delivery, promising a brighter future for healthcare in India.

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