Healthcare or big business?
India’s hospitals are raking in massive revenues. Learn how the top 12 rank in ARPOB (per day), their founders’ fascinating stories, stock price trends, and the complex economics of healthcare. Find out why India is the global hub for medical tourism, and whether healthcare investments could be your next big opportunity.
Introduction
Picture this: a state-of-the-art hospital room with gleaming equipment, buzzing medical staff, and a patient looking relieved after a successful surgery. Behind this heartening image is a business generating crores every year. Healthcare in India isn’t just about compassion—it is a thriving industry where profits often take precedence over philanthropy.
How do India’s leading hospitals rank when it comes to revenue? How do they operate? Why is medical tourism booming? And, if you are considering an investment in this sector, what do you need to know? Let us unpack the intersection of health and business.
How much do India’s top hospitals earn?
The revenue of a hospital is a combination of many factors, but one key metric stands out: ARPOB (Average Revenue Per Operational Bed). It’s a measure of how much revenue a hospital generates per bed, per day.
Here’s how the top hospitals in India perform:
| Rank | Hospital | ARPOB (₹/Day) |
|---|---|---|
| 1 | Max Hospital | ₹77,000 |
| 2 | Fortis Healthcare | ₹67,000 |
| 3 | Medanta | ₹64,000 |
| 4 | Jupiter Hospital | ₹60,000 |
| 5 | Apollo Hospitals | ₹59,073 |
| 6 | HCG | ₹44,500 |
| 7 | Aster | ₹44,000 |
| 8 | Narayana Hrudayalaya | ₹42,000 |
| 9 | Shalby | ₹39,000 |
| 10 | Rainbow Hospitals | ₹38,500 |
| 11 | KIMS | ₹38,500 |
| 12 | Yatharth | ₹30,500 |
Max Healthcare tops the chart with an ARPOB of ₹77,000, reflecting its premium services and high-end treatments. Meanwhile, newer players like Yatharth, with an ARPOB of ₹30,500, focus on a broader patient demographic, balancing volume with affordability. Narayana Hrudayalaya is another top hospital center with ARPOB of Rs 41,369.
Also Read: A visit to the Kairali Ayurvedic Treatment Centre
The stories behind the giants
Every hospital empire begins with a visionary founder and a compelling mission. Here’s a glimpse into the origins of some of India’s most prominent hospital chains:
1. Max Healthcare
- Founder: Analjit Singh
- Founded: 2000
- Story: Analjit Singh envisioned Max as a hospital chain that could bring world-class healthcare to India. Starting in Delhi, it grew rapidly by focusing on affluent patients and complex treatments.
- Interesting Fact: Max pioneered the concept of health insurance tie-ups for seamless billing.
2. Fortis Healthcare
- Founders: Shivinder and Malvinder Singh
- Founded: 2001
- Story: The Singh brothers turned Fortis into a household name by merging patient-centric care with cutting-edge technology. Despite personal controversies, the hospital remains a beacon of corporate healthcare.
3. Medanta
- Founder: Dr Naresh Trehan
- Founded: 2009
- Story: A renowned cardiac surgeon, Dr Trehan wanted to replicate global healthcare models in India. Medanta’s state-of-the-art facilities and a multi-speciality approach made it an instant success.
- Anecdote: Medanta became famous internationally after successfully treating a British patient with a rare heart condition.
- Medanta focuses on tertiary and quaternary care, excelling in oncology, cardiology, and organ transplants.
4. Apollo Hospitals
- Founder: Dr Prathap Reddy
- Founded: 1983
- Story: Dr Reddy’s Apollo Hospitals was India’s first corporate healthcare initiative, combining expertise with a patient-first ethos. Today, it is a healthcare conglomerate.
- Fact: Apollo pioneered the concept of medical tourism in India.
5. Jupiter Hospitals
What are their share prices like?
The financial markets provide another lens to evaluate these healthcare giants. Here is a snapshot of their stock performance:
| Hospital | Stock Price (₹) | Market Cap (₹ Crore) |
|---|---|---|
| Max Healthcare | 605 | 60,000 |
| Fortis Healthcare | 320 | 24,000 |
| Apollo Hospitals | 6,500 | 99,000 |
| Aster DM Healthcare | 300 | 15,000 |
Note: Share prices are indicative and subject to change.
Investors are drawn to these stocks due to their consistent growth, rising revenues, and a market that continues to expand. Apollo, for example, commands a high share price due to its established reputation and vast network.
Must Read: Unhealed Trauma: Is it holding you back from the life you deserve?
Indian Healthcare Market projected to reach $638 billion by 2025: Bajaj Finserv AMC
Growth Drivers of the Indian Healthcare Sector
India’s healthcare industry is experiencing unprecedented growth, propelled by evolving demographics, increasing investments, and rising awareness about preventive healthcare. Let’s explore the key drivers shaping this transformation:
An Aging and expanding population
India’s demographic landscape is shifting rapidly. Life expectancy is expected to soar from 67 years in 2021 to 84 years by 2045. The median age is also predicted to rise from 28.8 years in 2025 to 38.3 years by 2050. These trends signify a significant increase in demand for healthcare services, particularly for age-related medical care such as chronic disease management and geriatric treatments.
Advancements in Healthcare infrastructure
India’s healthcare infrastructure has witnessed a remarkable expansion, especially in Tier 2 to Tier 6 cities. The number of medical colleges has surged by nearly 1.8 times over the past eight years, reaching 758 institutions in FY24. Concurrently, the availability of trained doctors has grown by 1.1 times in just four years. The number of hospital beds is anticipated to increase twelvefold by 2045, addressing a critical gap in healthcare delivery.
Despite these advancements, the sector has vast potential for further growth. To meet the World Health Organization's recommendation of 3 hospital beds per 1,000 people by 2025, India still requires an additional 3 million beds, along with 1.54 million doctors and 2.4 million nurses.
Rising Healthcare Expenditure
India spends significantly less on healthcare than many emerging and developed economies. However, with an increase in private and public sector investments, as well as rising household incomes, healthcare expenditure is expected to rise substantially. This upward trend will enable the sector to meet growing demand while improving the quality of care.
The Untapped Health Insurance Market
Health insurance remains one of the most underutilized aspects of India’s healthcare system. Out-of-pocket expenses account for a staggering 54.8% of India’s healthcare spending, compared to 17.1% in the UK, 11.3% in the US, 35.2% in China, and 12.9% in Japan.
Nevertheless, health insurance penetration is steadily improving. The Indian health insurance market is projected to grow from ₹91,000 crore in 2024 to ₹1.5 lakh crore by 2029. Premium collections have already jumped from $3.82 billion in FY16 to $13.07 billion in FY24, reflecting increasing awareness and adoption.
A Shift Towards Preventive Healthcare
India is grappling with a rise in non-communicable diseases (NCDs), which account for over 63% of all deaths in the country. By 2045, India is expected to have 134 million diabetics, while obesity rates are set to rise dramatically. Air pollution and unsafe water sources are contributing to additional health burdens, causing respiratory and gastrointestinal diseases.
As a result, more Indians are prioritizing wellness and preventive healthcare. Indian consumers now lead globally in spending on fitness and wellness, significantly outpacing their counterparts in countries like Canada and the US. This shift is driven by rising incomes, urbanisation, and increased health awareness, boosting the growth of India’s over-the-counter (OTC) health product market.
The boom in medical tourism
India is cementing its status as a global leader in medical tourism. By 2024, the number of medical tourists is expected to rise from 4.8 lakh in 2022 to 7.3 lakh, with the industry projected to grow from $7.69 billion in 2024 to $14.31 billion by 2029.
The country’s appeal lies in its combination of high-quality healthcare, advanced infrastructure, and cost-effective treatment options. Surgeries in India often cost just 20% of what they do in developed nations, making it an attractive destination for international patients. Medical tourism currently accounts for 10-12% of India’s healthcare revenue and is poised for exponential growth.
The Path forward
India’s healthcare sector is brimming with opportunities. From tackling infrastructure gaps to expanding health insurance coverage and capitalising on medical tourism, the industry has immense potential to grow into a global healthcare powerhouse. With focused investments and sustained innovation, India is set to revolutionise its healthcare landscape, making quality care accessible and affordable for millions.
How do hospitals make money worldwide?
Globally, hospitals generate revenue through a mix of direct and ancillary services:
- Direct Services: Surgeries, diagnostics, and in-patient care.
- Insurance Partnerships: In developed markets like the US, insurance reimbursements form the backbone of hospital revenues.
- Pharmaceuticals and Devices: Many hospitals operate in-house pharmacies.
- Research and Innovation: Especially in advanced economies, hospitals generate income by licensing medical innovations.
India vs the World: ARPOB Comparison
- United States: $2,400/day (~₹1.8 lakh/day)
- Singapore: $1,200/day (~₹90,000/day)
- India: ₹30,000-₹77,000/day
India’s lower ARPOB reflects its cost-competitive healthcare model, which attracts medical tourists.
Why is healthcare about capitalism, not socialism?
Healthcare has evolved from a service to a business. In India, this shift has been catalysed by:
- Demand-Supply Gap: Private hospitals have stepped in where public infrastructure lags.
- Corporate Models: Hospitals are run like businesses, with profit targets and growth metrics.
- Globalisation: Exposure to international healthcare standards has driven premium services in India.
- Rising Demand: With a growing population and increasing prevalence of lifestyle diseases, private players are stepping in to bridge the gap.
- Insurance Penetration: As more Indians adopt health insurance, hospitals have found a steady revenue source.
- Global Trends: Healthcare globally is becoming commoditised, and India is no exception.
What about dividends and profits?
Hospitals don’t just heal—they reward shareholders too.
| Hospital | Profit Margin (%) | Dividends (%) |
|---|---|---|
| Max Healthcare | 15% | 30% |
| Apollo Hospitals | 12% | 25% |
Is India a medical tourism hub?
With affordability, expertise, and infrastructure, India has potential to be a global favourite for medical tourists.
- Cost Savings: Procedures in India cost 70%-80% less than in developed countries.
- Expertise: Indian doctors are globally renowned.
- Technology: Hospitals here are equipped with the latest medical innovations.
Case Study: A hip replacement surgery costs $40,000 in the US but just $6,000 in India.
Challenges for new hospitals
For new players, the road is fraught with hurdles:
- High Capital Requirements: Setting up a super-speciality hospital can cost hundreds of crores.
- Regulatory Approvals: Obtaining licences is cumbersome and time-consuming.
- Patient Trust: Competing with established players like Apollo is a daunting task.
Where should Investors look for opportunities?
Investors can look at stocks like Narayana Hrudulaya, Apollo and Max, or explore healthcare mutual funds. Factors to consider:
- Growth Potential: Hospitals in emerging cities.
- Profit margins: Compare ARPOB and net margins.
- Debt levels: Avoid hospitals with heavy debt burdens.
Disclaimer: This is for educational purposes only. Please do your research before investing.
Books to read about healthcare economics
- The Healing of America by T.R. Reid
- Explores healthcare systems worldwide.
- An American Sickness by Elisabeth Rosenthal
- Unveils the business of healthcare.
- The Checklist Manifesto by Atul Gawande
- Discusses innovation in healthcare.
- Redefining Health Care by Michael Porter
- Offers a strategic framework for value-driven care.
- Complications by Atul Gawande
- Stories from a surgeon’s life, with a focus on medical ethics.
FAQs
What is ARPOB?
Q: Why is Apollo so expensive?
Hospitals in India are redefining what it means to care for patients—blending medicine with business. Whether you're a patient, a professional, or an investor, understanding these dynamics is vital.
Bio
Tushar Mangl is an energy healer, vastu expert, and author of The Avenging Act. He writes on personal finance, investments, mental health, and the art of balanced living.
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