Just what the doctor ordered

Is the fear of job loss stressing you out? WELL, even if you end up as a victim of the economic downswing, you might just be doing a favor to the fortunes of one sector: Health care. If this industry doesn’t get hit in a slowdown, it’s simply because people don’t stop falling ill; and, of course, there would also be those literally being worried sick.

“A slowdown is the best time for health care to consider growth,” avers G.S. Rao, Executive Director at Yashoda Hospital in Hyderabad. Rao is doing just that. He has set up an integrated and advanced cancer treatment center involving investments to the tune of Rs 100 crore; this includes over Rs 17 crore on installation of, what he calls, Asia’s first Rapid Arc Linear Accelerator, which is used for radiotherapy.

Rao also plans to invest Rs 250-300 crore on super-speciality services by 2010. His growth plans are driven by the fact that there is constant demand and it is only during a slowdown or recession that input costs come down. Funding isn’t an issue either, with Rao claiming that banks are vying with each other to offer good rates.

Yashoda is not the only hospital that’s using the headwinds of a downturn to take off. Industry major Apollo Hospitals is equally upbeat and is busy implementing its plans to add new hospital beds across various locations. The plan is to add 2,536 beds—to its existing 7,543 beds— by December 2010, including 900 in tier II and tier III cities. For this Apollo has drawn up a Rs 1,586 crore investment plan. “We had already put some of our funding in place pre-recession,” says Suneeta Reddy, Executive Director (Finance), Apollo Hospitals Group. She adds that over the past year, patient volumes are up 12 per cent. Net profits for the third quarter are up 27 per cent over the previous year’s December ended period.

The healthcare sector is also one of the few that creates employment in a downturn. According to the consulting firm Technopak: “When the dotcom bubble burst in the US, health care was the only sector where the number of jobs increased.”In the Indian context, Technopak adds that “the fiscal concessions given in last year’s Union Budget for a tax holiday in tier II and tier III cities has already resulted in a flurry of activity in these towns.” Besides hospitals, other emerging healthcare segments like healthcare retail, diagnostic chains, assisted living centres, day-care ambulatory surgery clinics and centers for alternative medicine are increasingly attracting investments.

So, what can one expect going forward? According to Technopak: “Given the highly-skewed demand-supply equation, we expect health care to sustain its growth even in the new paradigm of muted economic growth.” The foray into tier II and tier III cities and towns goes to show that the new markets are constantly evolving for healthcare delivery.

It seems then, even if you lose your job, it wouldn’t be a bad idea to head straight to the healthcare sector.