Following the resolution of its legal entanglements concerning the acquisition of Fortis Healthcare, Malaysian healthcare behemoth IHH Healthcare is now poised for an assertive expansion within the Indian market. This strategic acceleration, spearheaded by its domestic brands Fortis Healthcare and Gleneagles, aims to significantly enhance its footprint in a region increasingly recognized as a pivotal global healthcare and medical tourism hub. Dr Prem Kumar Nair, Group Chief Executive Officer of IHH Healthcare, and Ashok Pandit, Group Chief Corporate Officer, recently outlined the group’s robust strategy for growth in India to Surajeet Das Gupta and Sanket Koul, signaling a profound commitment to the nation’s burgeoning healthcare destination status.
IHH’s Global Footprint and India’s Strategic Importance
IHH Healthcare operates an expansive network across 10 countries, employing 76,000 individuals, solidifying its position as a major international healthcare conglomerate. While key markets traditionally included Malaysia, Singapore, and Turkey, India, particularly since the 2018 acquisition of Fortis, has rapidly ascended to a high-priority status within the group’s global portfolio. From an industry perspective, this strategic pivot underscores India’s growing influence in cross-border healthcare and its undeniable potential for international patient care.
Dr Prem Kumar Nair articulated the company’s perspective, stating, “IHH operates in 10 countries with 76,000 employees, making us a large global healthcare group. Our most impactful markets include Malaysia, Singapore and Turkey, along with India, where we acquired Fortis in 2018.” He further emphasized India’s current standing: “Indian healthcare has become one of the most vibrant markets globally in recent years. Today, India is a very high-priority country for IHH. Fortis will be our primary vehicle for growth.”
Despite prior constraints linked to the Mandatory Tender Offer (MTO) completion, Fortis demonstrated resilience, strategically divesting underperforming facilities while acquiring new ones, particularly in high-demand areas like Bengaluru, Punjab, and the National Capital Region (NCR). With the MTO now finalized, IHH is empowered to accelerate its growth trajectory, positioning India as a prominent market for substantial expansion.
Ambitious Growth Targets: Expanding Bed Capacity for International Patient Care
IHH Healthcare has set an ambitious target to significantly increase its bed capacity in India. Currently, the combined operations of Fortis and Gleneagles account for approximately 6,000 beds. The group aims to elevate this figure to 10,000 beds by 2030, a clear indicator of its confidence in India’s healthcare destination potential and the rising demand for quality of care.
Ashok Pandit clarified that leadership would not solely be measured by bed count. “Currently, we have around 6,000 beds across both Fortis and Gleneagles. We aim to have up to 10,000 beds by 2030.” He added, “However, our approach to leadership will go beyond bed count. It includes clinical excellence, patient experience and revenue share. While bed expansion is relevant in India due to unmet demand, globally, we are also focusing on ambulatory care.” This holistic view suggests a commitment to enhancing the overall patient travel experience and ensuring superior outcomes, which are critical for sustained growth in medical tourism.
Investment Strategy and Capital Deployment
While specific investment figures were not disclosed, Ashok Pandit highlighted Fortis’s robust financial health. “I cannot give a number, but the good thing is that Fortis today has a very strong balance sheet. So a large part of its transactions, especially brownfield and greenfield projects and internal capital expenditure (Capex), is self-funded.” This financial independence positions Fortis advantageously for organic growth and internal capital expenditure, with major merger and acquisition (M&A) opportunities potentially requiring additional funding. This approach demonstrates a prudent, yet aggressive, strategy for global healthcare expansion.
Strategic Expansion Pillars: Brownfield and Cluster-Based Growth
IHH’s expansion strategy in India is predicated on two primary pillars: brownfield development and cluster-based growth.
Dr Prem Kumar Nair explained the preference for brownfield expansion: “I would say our first pillar of growth, not just for India but almost every country, is brownfield expansion because it offers more immediate operating leverage.” He pointed out the high occupancy rates across Fortis’s 36 hospitals in India, often reaching 70 to 80 percent. “Almost all of them are operating at around 70 to 80 per cent occupancy levels, which in private healthcare means that patients are missing out on getting a bed in our hospital. So you have to increase the capacity.”
The second critical strategy is cluster-based expansion, focusing on regions where Fortis already has a strong presence, such as Punjab, NCR, Mumbai, Bengaluru, and Kolkata. This involves identifying and acquiring existing operational hospitals within these clusters to improve and integrate them into the Fortis network. This strategy is particularly effective for enhancing regional healthcare destination capabilities and streamlining international patient care.
Regarding expansion into Tier 2 and Tier 3 cities, Ashok Pandit clarified, “Our focus is on clusters. For example, in the northern cluster, we have Jalandhar, Amritsar, and Ludhiana, which are big Tier-2 cities. If you look at Delhi-NCR, we have Fortis in Manesar as well. So I think where we have the advantage of being in a cluster, that is where we will go.” Dr Prem Kumar Nair emphasized the core criteria for expansion: “I think the key criteria in any city, be it Tier 1 or 2, is availability. There must be demand for healthcare services. Then you must find good personnel. You must be able to hire doctors and nurses, and that is exactly what we are doing in some of these cities where we are present.” This pragmatic approach ensures sustainable growth and maintains quality of care.
Brand Architecture and Global Healthcare Reach
IHH Healthcare has a clear brand strategy for India, primarily centered on Fortis. While Gleneagles was an earlier acquisition, its operations have been rationalized and streamlined, now functioning as a Fortis Network Hospital under Fortis management for enhanced efficiency and cost reduction. This strategic consolidation underscores a commitment to a unified, strong brand presence in the Indian healthcare destination market.
Dr Prem Kumar Nair clarified the brand roles: “Fortis is a strong domestic brand, similar to Mount Elizabeth in Singapore or Pantai in Malaysia. It will remain India-focused.” He added, “Gleneagles, on the other hand, is our international brand. The original hospital is in Singapore, which then expanded to Malaysia, Brunei, Hong Kong, and India. So we can use Gleneagles to expand internationally.” This distinction allows IHH to leverage Fortis’s strong local identity while utilizing Gleneagles for broader global healthcare expansion.
Ashok Pandit confirmed that other IHH global brands are not slated for entry into India, reinforcing Fortis’s central role. “No. Our main entity here will remain Fortis.” He highlighted the advanced capabilities within the Fortis network, particularly hospitals like FMRI, which offer cutting-edge clinical outcomes through significant investments in advanced equipment like MR-LINACs and Gamma Knife, ensuring top-tier quality of care.
Tapping into Medical Tourism and Cross-Border Healthcare
India is inherently positioned as a premier medical tourism and health tourism hub, particularly for international patients from West Asia, Africa, the CIS states, and Central Asia. IHH recognizes this immense potential and is actively investing in facilitating patient travel.
Dr Prem Kumar Nair detailed the support mechanisms: “Wherever relevant, we will put facilitation offices, like we have in Africa, to help patients coming over in getting a visa and various other processes.” This proactive approach streamlines cross-border healthcare and enhances India’s appeal as a healthcare destination.
The ongoing conflict in West Asia has, however, impacted international patient revenue. Dr Nair observed, “We are seeing a drop in numbers from West Asia to the tune of 25 to 30 per cent.” Yet, he offered an insightful analysis of medical tourism resilience: “However, medical tourism is very interesting, as whenever there is a crisis or travel is restricted, medical travel is deferred rather than stopping completely. Most of these procedures are elective procedures, not emergencies. So, in such cases, the patient will defer it. But typically, what happens after the crisis ends is there is a big bump-up in patients because they all come back. That is what we have seen in all our markets as well.” This indicates a strong underlying demand for international patient care that tends to rebound post-crisis.
The Future of Care Delivery: Ambulatory Services and Specialised Excellence
IHH Healthcare sees significant growth opportunities in ambulatory care, which aligns with modern healthcare destination trends focusing on efficiency and patient convenience. Ashok Pandit stated, “I think the next phase of growth in India is going to be from ambulatory care, where procedures like chemotherapy, dialysis, and endoscopies can be done in a daycare setting. That is where the opportunity lies, but it will also be multi-speciality there and not single-speciality.” This shift towards multi-specialty daycare settings reflects a strategic move to address evolving patient needs and optimize resource utilization, further solidifying India’s position in global healthcare.
While Fortis has a single-specialty maternity care hospital, La Femme, the broader focus for future growth in ambulatory care leans towards multi-specialty offerings. This strategy ensures comprehensive international patient care capabilities.
Fortis has made substantial investments in oncology, including recruiting top clinical talent and acquiring advanced equipment like MR-LINAC, underscoring a commitment to providing high-quality of care while maintaining affordability. Dr Nair noted the evolving specialty mix: “Cardiology has declined due to better prevention, while oncology is rising due to higher cancer incidence and longer lifespans. Orthopaedics is also growing with ageing populations, and fields like immunology will grow.” This adaptability to epidemiological shifts is crucial for any leading healthcare destination.
Technological Advancement and Patient Outcomes
Fortis is dedicated to incorporating new technologies that offer real-world impact and remain affordable. Artificial intelligence (AI) is anticipated to revolutionize areas such as drug discovery and hospital operations, enhancing both efficiency and quality of care. Through initiatives like the IHH Catalyst Programme, Fortis actively collaborates with startups to implement scalable and practical innovations across its network.
Robotics adoption is also on the rise, driven by the emergence of more cost-effective options. Dr Nair highlighted this trend: “Robotics adoption is increasing, especially with more cost-effective options emerging. Our doctors have already trialled some of the Asian-made machines, which come at a lower cost but are as good as other machines.” This focus on accessible yet advanced technology further elevates India’s standing in global healthcare.
Public-Private Partnerships (PPPs) in India’s Healthcare Ecosystem
The Union Finance Minister Nirmala Sitharaman’s announcement regarding the establishment of daycare cancer centers through potential public-private partnerships (PPPs) presents a compelling opportunity for private healthcare providers. While no direct discussions have yet occurred with Fortis, the group expresses strong interest.
Ashok Pandit affirmed, “There have not been any such discussions with us yet, but it makes a lot of sense. If this happens, Fortis will be pretty happy to look at it.” Dr Prem Kumar Nair emphasized IHH’s extensive experience with PPPs in other markets: “In countries like Singapore and Malaysia, IHH has significant PPPs with the government, especially in cancer care. We are very happy to consider PPPs because it makes sense, as public systems are becoming very adjusted and under-resourced.” He noted the potential for offering services at lower rates for public patients, leveraging existing hospital capacity for such partnerships. This willingness to engage in PPPs showcases a commitment to broader societal health objectives while expanding healthcare destination accessibility.
Bottom Line
IHH Healthcare’s revitalized strategy for India, centered on Fortis, marks a significant chapter in the nation’s global healthcare journey. The core takeaways from this strategic outlook include:
- Prioritized Market Focus: India is now a top-tier market for IHH, with Fortis serving as the primary growth engine, signaling sustained investment in its healthcare destination potential.
- Ambitious Capacity Expansion: A target of 10,000 beds by 2030, driven by brownfield expansion and strategic acquisitions within established clusters, is set to significantly boost international patient care capacity.
- Holistic Leadership Metrics: Success will be measured not just by bed count, but also by clinical excellence, patient experience, and revenue share, ensuring high quality of care.
- Strategic Brand Consolidation: Fortis will remain the flagship domestic brand, while Gleneagles will continue its role as the international brand for global expansion, optimizing cross-border healthcare strategies.
- Robust Medical Tourism Initiatives: Despite short-term geopolitical impacts, IHH anticipates continued growth in medical tourism, backed by facilitation offices and India’s inherent appeal as a health tourism hub.
- Future-Forward Service Delivery: Significant investment in multi-specialty ambulatory care, advanced oncology, and affordable, impactful technologies like AI and robotics will redefine patient travel and treatment.
- Openness to Public-Private Partnerships: IHH’s willingness to engage in PPPs, particularly for cancer care, indicates a commitment to expanding healthcare access and leveraging shared resources within the global healthcare ecosystem.
IHH Healthcare’s strategic vision for India underscores a belief in the country’s capacity to not only meet domestic demand but also to solidify its position as a leading healthcare destination for international patients seeking advanced and affordable quality of care.
The news signal for this article was referred from: https://www.business-standard.com/companies/people/india-to-be-priority-market-post-fortis-deal-ihh-eyes-cluster-expansion-126040701089_1.html