Annual Report Theme: Reflection
“After spending years on cost reduction, we made massive difference to the common man of our country and set an example for the rest of the world to follow. Dr. Devi Shetty’s first patient 31 years ago paid one and a half lakh rupees for a bypass grafting. Today, we are doing bypass for poor patients at the same cost. However, we have reached an inflection point on reducing costs. We can’t reduce costs further without compromising on the quality of the surgery.”
Low Cost Health Insurance
There is only a certain point till which cost of healthcare can be reduced and NH’s management is of the view that they are near it. The only way to provide access to affordable healthcare going forward is with innovation in low cost health insurance.
Out of pocket payment for healthcare is a third world phenomenon. India is no longer a third world country and we need to build new avenues to pay for healthcare. A financial intermediary pays for healthcare in most parts of the world. The cell phone revolution taught us a very interesting lesson – Indians are willing to pay a small amount of money in instalments for essential services. We believe that the future of healthcare services in India is closely linked to innovation in low cost health insurance. There are a lot of exciting companies developing satchet-sized insurance as well as integrated healthcare plans.
Electronic Medical Records
EMRs improve quality of care, patient outcomes and safety through improved management, reduction in medication errors, reduction in unnecessary investigations, and improved communication and interactions among primary care providers, patients, and other providers involved in care.
Mass adoption of EMR happened in USA because of $24 billion in grants given by the government to all hospitals. To improve the safety of healthcare in India, EMR adoption is critical. Today, small hospitals and nursing homes are reluctant to adopt EMR because of the time spent on learning a new system. If a small amount of money is paid per patient, nursing homes and clinics across the country will be incentivized to adopt electronic medical records. India is perhaps the only country which can do it at scale because of the extremely talented pool of software engineers who can develop most advanced electronic medical records and make it available at an affordable price.
Rapid expansion of Nursing and Medical Colleges
India requires a large healthcare staff to service its population. Currently, it is lagging developed countries by a huge margin in terms medical professionals required.
There are 2,600 nursing colleges offering nursing degree programs in USA. With less than a quarter of Indian population, USA graduates over 1,55,000 registered nurses per year. India has 2,500 colleges teaching General Nursing and Midwifery (GNM) and 1,900 colleges offering BSc Nursing. About 90,000 GNM and 100,000 BSc Nurses graduate each year. For 10,000 people, India has 21 nurses while USA has 116 nurses.
Business Performance
After the effects of the second wave of the pandemic subsided, there was a gradual recovery of business over the subsequent few months, with the Indian businesses reporting record profitability during the third quarter of the fiscal year, surpassing the pre-COVID highs for the first time, despite that being historically a seasonally moderate period. Unfortunately, the third wave of the pandemic again had a negative impact on our Indian operations during the fourth quarter, but ended the year on a strong note due to the recovery in March of 2022.
Operating Revenue: Rs. 3,701cr (vs Rs. 3,128 cr in FY20 which was largely a normal operating year)
EBITDA: Rs. 688cr (vs Rs. 447cr in FY20)
EBITDA Margin: 18.6% (vs 14.3% in FY20)
PAT: Rs. 342cr (vs Rs. 119 cr in FY20)
PAT Margin: 9.2% (vs 3.8% in FY20)
Operational Beds: 6,011 (vs 5,859 in FY20)
Overseas Business
NH’s Cayman Island hospital has shown strong financial performance and this has provided NH with increased confidence to expand its offerings and operations in the region. It is also exploring opportunities in other Caribbean countries.
Our overseas Cayman Island operations continued its excellent growth trajectory in FY 2021-22, delivering an impressive EBITDA of US$39.7 million, growing at over 50% on YoY basis in the FY 2021-22. During the course of the year, we inaugurated a state-of-the-art clinic in the heart of the city, which will be integrated into the larger new campus upon its completion. We look forward to launching the expanded operations on the new campus, beginning with the Radiation Oncology programme, in a staggered manner due to the global supply chain disruptions affecting an entirely import-reliant nation like Cayman Islands for building materials and equipment. During the period, our Caribbean hospital consultancy assignment in St. Lucia also contributed to the overall profitability. We are optimistic that this regional business will emerge a strong pillar of our future growth.
Portfolio Rationalisation
As part of its portfolio rationalisation, NH exited operations at its ophthalmology-focused centre in Kolkata, the Rotary Narayana Eye hospital, as well as its fledgling Cardiac Care operations in Chittagong, Bangladesh, to sustain the long term interest of the business.
Oncology
NH is trying to diversify its specialty-profile and Oncology seems to be one of the focus therapies for the company. It is already ugrading three of its centers to Comprehensive Cancer Centers, with primary focus on developing capabilities in tier-2 and 3 cities.
NH is one of India's major private cancer care providers, delivering Radiation Therapy, Medical Oncology, Hemato-Oncology, and Surgical Oncology services as well as complete cancer diagnosis and treatment. Over the years, our team of Hemato-Oncologists, Radiation Oncologists, Medical and Surgical Oncologists, nuclear medicine experts, radiologists, pathologists, and other experts have worked tirelessly to provide high-quality care to thousands of patients. NH is in the process of upgrading three more centers to Comprehensive Cancer Centers - Jaipur, Shimoga and Ahmedabad. LINAC at Delhi, Kolkata and Bangalore have been upgraded to provide latest treatments. A special focus is to develop additional capabilities in tier 2 and tier 3 cities and its showing results. Jammu, Raipur, and Guwahati have emerged as centers of choice for Cancer Care for regional population.
Cardiac Sciences
NH has a strong cardiac science franchise which it is leveraging to become an integrated, multi-speciality group with increased interdisciplinary collaborations.
NH’s top-ranked team of Cardiologists and Cardiac Surgeons diagnoses and treats close to 5 lac adults and children each year, including those with complex or rare conditions. Our Cardiac sciences is one of the largest and most comprehensive heart practices in the world. It includes more than 400 subspecialized experts trained in Congenital Heart Disease in adults and children, Coronary Artery Disease, Structural Heart Disease, Heart Rhythm Disorders and Aortic Artery Diseases. Our Cardiac sciences specialists are part of an integrated, multidisciplinary group, collaborating with experts in many specialties to provide our patients with comprehensive and seamless care. These experts include doctors trained in Surgery, Radiology, Pathology, Endocrinology, Nephrology, Pulmonology, intensive care and other areas, depending on the patient’s condition.
Neurosciences
Interventional Neurology services started at NH Mazumdar Shah Medical Centre (MSMC), Bengaluru in 2009. MSMC was the first Centre in India to do temporary endovascular bypass/ stent retriever for stroke (2010) and the first Centre to do mechanical thrombectomy for Paediatric patients in Asia. We were the first centre to use Artificial Intelligence(AI) in stroke imaging ( RAPID system) in India. MSMC has crossed 5500 cases in total.
Organ transplants
Our goal at NH is to offer the widest range of treatment options to patients with end stage kidney failure, liver disease, heart failure and bone marrow failure. Organ transplantations save lives in patients affected by terminal organ failures, and it immensely improves quality of life, reduces co-morbidities, allows our patients to get back to leading near normal life. Performance 50 Liver Transplant, 14 Heart Transplant, 560 Kidney Transplant and 200+ Bone Marrow Transplant.
Robotic Surgery
Robotic surgery, also called robot-assisted surgery, allows doctors to perform many types of complex procedures with more precision, flexibility and control than is possible with conventional techniques and is minimally invasive. NH has performed 227 robotic surgeries during the year under review representing growth of 132%
Orthopaedics
NH provides comprehensive and world-class orthopaedic services. This department offers specialized care in the field of complex trauma, poly-trauma and related sub-specialities. The Orthopaedic department at our hospitals delivers personalised care utilising the latest research and evidence-based medicine. The department provides management related to disorders of bone, joint and a variety of musculoskeletal disorders. During FY22 the NH performed 1500+ Knee Replacement, 500+ Arthroscopy, 500+ Hip Replacement.
Way Forward per Management