Private hospital chains are gearing up for substantial expansion beyond Tier 1 and 2 metros, with projections indicating the addition of over 30,000 beds in the next four to five years, requiring an investment of approximately Rs 32,500 crore, as per a report by rating agency ICRA in January.

While major cities like Delhi NCR, Mumbai, and Bangalore are expected to remain focal points for this capacity expansion, hospital chains are also exploring mergers and acquisitions to diversify their geographic reach and specialty mix, alongside scaling up operations.

In the April edition, our cover story delves into how healthcare giants are navigating the healthcare landscape in Nashik, an emerging hub in Maharashtra. While corporate hospitals have made inroads, smaller standalone hospitals also play a vital role. Schemes like Ayushman Bharat and Maharashtra's Mahatma Jyotirao Phule Jan Arogya Yojana (MJPJAY) have enhanced awareness, access, and affordability to healthcare in the region.

Expansion to smaller cities holds promise for both patients and hospital chains. Patients gain access to advanced care closer to home, while larger chains expand their footprint and benefit from economies of scale. However, challenges abound.

Critics argue that private care is costlier, leading to closures of smaller nursing homes due to intense competition. These facilities, already operating on thin margins, struggle for cash flow and lose market share to chains with deeper pockets.

Moreover, smaller towns see a higher percentage of patients availing subsidized care under government schemes. Hospitals must strike a balance between subsidized and full-paying patients to ensure viability. However, some allege misuse of schemes by patients who can afford treatment but claim benefits.

Talent shortage poses a significant hurdle. Most doctors prefer metro locations, and trained nursing and paramedical staff are scarce in smaller towns. Specialist scarcity leads to poaching between hospitals, complicating full-time consultant requirements by national chains.

Despite challenges, hospital chains are keen on expanding brand presence. Greenfield facilities in locations with available real estate offer growth opportunities. Chains are upskilling talent through online courses and setting up connecting spokes in smaller areas, linking them to larger hubs.

Balancing unmet medical needs with corporate objectives requires a nuanced approach, focusing on demographic profiles, disease niches, and sustainable ecosystem creation. As hospital chains navigate these hurdles, they aim to bridge healthcare gaps while expanding their footprint across India's diverse landscape.