HEALTH

SERVICES INDUSTRY

HEALTH SERVICES INDUSTRY

India has made substantial progress in health determinants over the past decades. The
critical indicators of health, including Infant Mortality Rate, Maternal Mortality ratio,
Disease prevalence, morbidity as well as mortality rates have shown consistent decline
over the years. These achievements are the cumulative result of several interconnected
changes. The improved coverage and efficiency of Public Health delivery system as well
as expanding private health sector have contributed equal measures to ameliorating the
suffering associated with adverse health events. The overall economic upturn as well as
improvement in collateral determinants of health has assisted the country achieve critical
milestones like elimination of leprosy and reducing the burden of Tuberculosis.

Investment Opportunities
• Health Insurance

• Medical Tourism

• Hospital Management

• Curative and Preventive Services

• Infrastructure Facilities like Hospitals and Diagnostic Centre

• Training Manpower (doctors, nurses, technicians)

FDI Policy

100 percent is permitted for all health related services under the automatic route

Key Players

Private players have made significant investments in setting up state-of-the-art private

hospitals in cities like Mumbai, New Delhi, Chennai and Hyderabad. They have
introduced latest medical technology and have created a competitive environment. The
government's share in the healthcare delivery market is 20 percent while 80 percent is
with the private sector. Emergence of corporate hospitals has led to increased
professionalism in medical practices and use of hospital management tools.

• Apollo Group

• Fortis

1
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
• Max

• Wockhardt

• Primal

• Duncan

• Ispat

• Escorts

• Ranbaxy Group Company

Indian Medical Council Act. A total 5, 39, 00 MBBS doctors were registered
with the Medical council number of Physicians and specialists available is more than the
estimated requirements. The current doctor population ratio is 1:1800.

Public spending on health in India has itself declined after liberalization from
1.3% of GDP in 1990 to 0.9% in 1999. Consider the contrast with the Bhore Committee
recommendation of 15% committed to health from the revenue expenditure budget,
against the WHO, which recommended 55% of GDP for health. The current annual per
capita public health expenditure is no more than Rs. 160and a recent World Bank review
showed that over all primary health services account for 58% f public expenditure mostly
but on salaries, and the secondary/tertiary sector for about 38%, perhaps the greater part
going to tertiary sector, including government funded medical education.

NATURE

Combining medical technology and the human touch, the health services industry
administers care around the clock, responding to the needs of millions of people—from
newborns to the critically ill.

2
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
More than 460,000 establishments make up the health services industry; all vary
greatly in terms of size, staffing, and organization. Two-thirds of all private health
services establishments are offices of physicians or dentists. Although hospitals comprise
less than 2 percent of all private health services establishments, they employ nearly 40
percent of all workers (table 1). When government hospitals are included, the proportion
rises to almost half the workers in the industry.

Table 1. Percent distribution of wage and salary employment and establishments in

private health services, 1997
Establishment type Establishments Employment
Total, health services 100.0 100.0
Hospitals, private 1.6 39.6
Offices of physicians and osteopaths 41.8 18.5
Nursing and personal care facilities 4.3 18.1
Home health care services 3.3 7.3
Offices of dentists 23.8 6.5
Offices of other health practitioners 18.7 4.5
Health and allied services, not elsewhere classified 3.1 3.4
Medical and dental laboratories 3.4 2.0
The health services industry includes small-town physicians with private practices
who employ only one medical assistant, as well as busy inner city hospitals that provide
thousands of diverse jobs. Over half of all non-hospital health services establishments
employ fewer than 5 workers (see chart). On the other hand, almost two-thirds of hospital
employees were in establishments with over 1,000 workers (see chart).

The health services industry is made up of the following eight segments:

HOSPITALS:

Hospitals provide complete health care, ranging from diagnostic services to

surgery and continuous nursing care. Some hospitals specialize in treatment of the
mentally ill, cancer patients, or children. Hospital-based care may be on an inpatient
(overnight) or outpatient basis. The mix of workers needed varies, depending on the size,
geographic location, goals, philosophy, funding, organization, and management style of
the institution.

3
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
As hospitals work to improve their efficiency, care continues to shift from an
inpatient to outpatient basis whenever possible. Many hospitals have also expanded into
long-term and home health care services, providing a continuum of care for the
communities they serve.

NURSING AND PERSONAL CARE FACILITIES.

Nursing facilities provide inpatient nursing, rehabilitation, and health-related

personal care to those who need continuous health care, but do not require hospital
services. Nursing aides provide the vast majority of direct care. Other facilities, such as
convalescent homes, help patients who need less assistance. A growing segment within
personal care is assisted living facilities. These facilities house the elderly in a home-like,
independent setting and provide care appropriate to each resident’s level of need.

OFFICES AND CLINICS OF PHYSICIANS, INCLUDING OSTEOPATHS.

Doctors of medicine and osteopathy practice alone and in groups of practitioners

who have the same or different specialties. Group practice has become the recent trend,
including clinics, free standing emergency care centers, and ambulatory surgical centers.
Physicians are more likely now to work as salaried employees of group medical practices,
clinics, or health care networks than in the past.

HOME HEALTH CARE SERVICES.

Skilled nursing or medical care is sometimes provided in the home, under a

physician’s supervision. Home health care services are provided mainly to the elderly.
The development of in-home medical technologies, substantial cost savings, and patients’
preference for care in the home have helped make this once small segment of the industry
one of the fastest growing in the U.S. economy.

OFFICES AND CLINICS OF DENTISTS.

4
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Almost 1 out of every 4 health care establishments is a dentist’s office. Most
employ only a few workers who provide general or specialized dental care, including
dental surgery.

OFFICES AND CLINICS OF OTHER HEALTH PRACTITIONERS.

This segment includes offices of chiropractors, optometrists, and podiatrists,

as well as occupational and physical therapists, psychologists, audiologists, speech-
language pathologists, dietitians, and other miscellaneous health practitioners. Demand
for services in this industry is related to the ability of patients to pay, either directly or
through health insurance. Hospitals and nursing facilities may contract out for these
services. This industry also includes alternative medicine practitioners, such as
acupuncturists, hypnotists, and naturopaths. Demand for these services has grown with
public awareness of the professions.

Health and allied services, not elsewhere classified. Among the diverse
establishments in this group are kidney dialysis centers, outpatient facilities such as drug
treatment clinics and rehabilitation centers, and other miscellaneous establishments such
as blood banks and providers of childbirth preparation classes.

MEDICAL AND DENTAL LABORATORIES.

Medical laboratories provide professional analytic or diagnostic services to the

medical profession or directly to patients following a physician’s prescription. Workers
analyze blood, take x rays, or perform other clinical tests. In dental laboratories, workers
make dentures, artificial teeth, and orthodontic appliances. Medical and dental
laboratories provide the fewest number of jobs in health services.

Technological advances have made many new procedures and methods of

diagnosis and treatment possible. For example, information technology continues to
improve care and efficiency with devices such as hand held computers that record notes
on each patient. Information on vital signs and orders for tests are then transferred to a
main database, eliminating paper and reducing record keeping errors. Clinical
developments such as organ transplants, less invasive surgical techniques, skin grafts, and
gene therapy for cancer treatment continue to increase longevity and improve the quality
of life for many Americans, as well as redistribute the demand for health care workers.
Advances in medical technology have improved the survival rates of trauma victims and

5
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
the severely ill, who then need extensive care from therapists and social workers, among
other support personnel.

Cost containment in the health care industry is important as shown by the growing
emphasis on providing services on an outpatient, ambulatory basis; limiting unnecessary
or low priority services; and stressing preventive care that reduces the eventual cost of
undiagnosed, untreated medical conditions. Enrollment in managed health care programs
—predominantly Health Maintenance Organizations (HMO’s), Preferred Provider
Organizations (PPO’s), and hybrid plans such as Point-of-Service (POS) programs—
continues to grow. These prepaid plans provide comprehensive coverage to members and
control health insurance costs by emphasizing preventive care.

A growing phenomenon in the health services industry is the formation of

Integrated Delivery Systems (IDS) where two or more segments of the industry are
combined to increase efficiency through the streamlining of primarily financial and
managerial functions. According to a 1998 Deloitte & Touche Survey, only 34 percent of
surveyed hospitals expect to be stand-alone, independent facilities in 2003, as compared
to 58 percent in 1998. These changes will continue to reshape not only the nature of the
health services workforce, but also the manner in which health services are provided.

EMPLOYMENT

The health services industry provided over 10.8 million wage and salary jobs in 1998.
Almost one-half of all health services jobs were in hospitals; another one-third were in
either nursing and personal care facilities or offices of physicians. About 92 percent
worked in the private sector; the remainder worked in State and local government
hospitals.

In addition to wage and salary workers, an estimated 446,000 workers in the industry
were self-employed in 1998. Of these, about 70 percent were in offices of physicians,
dentists, and other health practitioners. Health services jobs are found throughout the
country, but are concentrated in large States, specifically California, New York, Florida,
Texas, and Pennsylvania.

Workers in this industry tend to be older than workers in other industries, especially in
occupations requiring higher levels of education and training, because they are more
likely to stay in such occupations for a number of years.

6
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY

OUTLOOK

Employment in the health services industry is projected to increase 26 percent

through 2008, compared to an average of 15 percent for all industries (table 5).
Employment growth is expected to add about 2.8 million new jobs—14 percent of all
wage and salary jobs added to the economy over the 1998-2008 period. Projected rates of
employment growth for the various segments of this industry range from 8 percent in
hospitals, the largest and slowest growing industry segment, to 80 percent in the much
smaller home health care services.

Table 5. Employment of wage and salary workers in health services by segment of

industry, 1998, and projected change, 1998-2008

(Employment in thousands)
1998-2008
Percent
Industry 1998 Employment change
All industries 128,008 15.3
Health services 10,829 25.7
Hospitals, public and private 4,909 7.7
Nursing and personal care facilities 1,762 25.6
Offices of physicians 1,853 41.2
Home health care services 672 80.5
Offices of dentists 646 29.9
Offices of other health practitioners 450 42.8
Health and allied services,
not elsewhere classified 339 64.9
Medical and dental laboratories 199 24.5
Employment in health services will continue to grow for a number of reasons. The
elderly population, a group with much greater than average health care needs, will grow
faster than the total population between 1998 and 2008, increasing the demand for health
services, especially for home health care and nursing and personal care.

7
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
As the baby boom generation ages, the incidence of stroke and heart disease will
increase. Advances in medical technology will continue to improve the survival rate of
severely ill and injured patients, who will then need extensive therapy. New technologies
often lower the cost of treatment and diagnosis, but also enable identification and
treatment of conditions not previously treatable. In addition, medical group practices and
health networks will become larger and more complex, and will need more managerial
and support workers.

Employment growth in the hospital segment will be the slowest within the health
services industry, as it consolidates to control costs and as clinics and other alternate care
sites become more common. Hospitals will provide more outpatient care, rely less on
inpatient care, and streamline health care delivery operations. Job opportunities, however,
will remain plentiful because hospitals employ a large number of people. The demand for
dental care will increase due to population growth, greater retention of natural teeth by
the middle-aged and older persons, and greater awareness of the importance of dental
care and ability to pay for services. Rapid growth in other health services segments will
mainly result from the aging of the population, new medical technologies, and the
subsequent increase in demand for all types of health services.

Also contributing to industry growth will be the shift from inpatient to less
expensive outpatient care, made possible by technological improvements and Americans’
increasing awareness and emphasis on all aspects of health. Various combinations of all
these factors will assure robust growth in this massive, diverse industry.

The fastest growth is expected for workers in occupations concentrated outside

the inpatient hospital sector, such as medical assistants and personal care and home health
aides. Because of cost pressures, many health care facilities will adjust their staffing
patterns to lower bottom-line labor costs. Where patient care demands and outside
regulations allow, health care facilities will substitute lower-paid providers and cross-
train their workforce. Many facilities have cut the number of middle managers, while
simultaneously creating new managerial positions as they diversify. Because traditional
inpatient hospital positions are no longer the only option for many future health care
workers, they must be flexible and forward-looking (chart).

8
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Besides job openings due to employment growth, additional openings will result
as workers leave the labor force or transfer to other occupations. Occupations with the
most replacement openings are usually large with high turnover due to low pay and
status, poor benefits, low training requirements, and a high proportion of young and part-
time workers. Many are service occupations, such as nursing aides. Occupations with
relatively few replacement openings, on the other hand, are those with high pay and
status, lengthy training requirements, and a high proportion of full-time workers, such as
physicians.

For some executive, administrative, and managerial occupations, rapid growth

will be countered by restructuring to reduce administrative costs and streamline
operations. The effects of office automation and other technological changes will slow
employment growth in administrative support occupations, but because the employment
base is large, replacement needs will still create substantial numbers of job openings.
Slower growing service occupations will also have job openings due to replacement
needs.

Many of the occupations projected to grow the fastest are concentrated in the
health services industry. By 2008, employment in all industries of personal care and
home health aides is projected to increase by 58 percent, medical assistants by 58 percent,
physician assistants by 48 percent, and health information technicians by 44 percent.

Technological changes, such as increased laboratory automation, will also affect

the demand for some occupations. For example, the use of robotics in blood analysis may
limit growth of clinical laboratory technologists and technicians, although the nature of
health care precludes wholesale productivity gains in many instances.

Although workers at all levels of education and training will continue to be in

demand, in many cases it may be easier for job seekers with health-specific training to
obtain jobs and advance. Specialized clinical training is a requirement for many jobs in
health services and is an asset even for many administrative jobs that do not specifically
require it.

EARNING

Average earnings of nonsupervisory workers in health services are slightly higher than
the average for all private industry, with hospital workers earning considerably more than

9
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
the average, and those in nursing and personal care facilities and home health care
services earning considerably less (table 3). Average earnings often are higher in
hospitals because their percentage of jobs requiring higher levels of education and
training is greater than in other segments. Segments of the industry with lower earnings
employ a large number of part-time service workers.

Table 3. Average earnings and hours of nonsupervisory workers in private health

services by segment of industry, 1998
Earnings
Industry segment Weekly Hourly Weekly hours
Total, private industry $442 $12.77 34.6
Health services 454 13.72 33.1
Hospitals, private 541 15.46 35.0
Offices of physicians 470 14.28 32.9
Offices of dentists 399 14.15 28.2
Offices of other health practitioners 397 13.13 30.2
Home health care services 334 11.50 29.0
As in most industries, professionals and managers typically earn more than other
workers. Earnings in individual health services occupations vary as widely as their duties,
level of education and training, and amount of responsibility (table 4).

Some establishments offer tuition reimbursement, paid training, child day care
services, and flexible work hours. Health care establishments that must be staffed around
the clock to care for patients and handle emergencies often pay premiums for overtime
and weekend work, holidays, late shifts, and when on-call. Bonuses and profit-sharing
payments also may add to earnings.

Earnings vary not only by type of establishment and occupation, but also by size.
Salaries are often higher in larger hospitals and group practices. Geographic location also
can affect earnings.

Table 4. Median hourly earnings of the largest occupations in health services, 1997
Occupation Health services All industries
Registered nurses $18.84 $18.88
Licensed practical nurses 12.34 12.46
Dental assistants 10.59 10.62
Medical assistants 9.71 9.71

10
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Receptionists and information clerks 9.19 8.69
General office clerks 9.05 9.10
Home health aides 7.94 7.75
Nursing aides, orderlies, and attendants 7.70 7.76
Maids and housekeeping cleaners 7.16 6.74
Unionization is more common in hospitals, although most segments of the health services
industry are not heavily unionized. In 1998, 14.9 percent of hospital workers and 10.7
percent of workers in nursing and personal care facilities were members of unions or
covered by union contracts, compared to 15.4 percent of all workers in private industry.

OCCUPATIONS

Health services firms employ workers in professional specialty and service

occupations in about equal numbers. Together, these two occupational groups cover
nearly 3 out of 5 jobs in the industry. The next largest share of jobs is in administrative
support occupations, followed by technicians and related support occupations. Executive,
administrative, and managerial occupations account for only 6 percent of employment.
Other occupations in health services comprise only 1 percent of the total (table 2).

Professional specialty occupations, such as physicians, registered nurses, social

workers, and therapists, mostly require a bachelor’s degree in a specialized field or higher
education in a specific health field, although registered nurses also enter through
associate degree or diploma programs.

Respiratory therapists often do not need a bachelor’s degree, but this degree or a
higher one is the most significant source of training for all other therapist occupations.
Professional workers often have high levels of responsibility and complex duties. They
may supervise other workers or conduct research, as well as provide services.

Service occupations attract many workers with little or no specialized

education or training. This group includes nursing and psychiatric aides, food
preparation and service occupations, janitors and cleaners, dental and medical assistants,
and personal care and home health aides. Service workers may advance to higher-level
positions or to new occupations, with experience and, in some cases, further education
and training.

Technicians and related support occupations include many fast growing health
occupations, such as health information technicians and dental hygienists. These workers

11
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
may operate technical equipment and assist health practitioners and other professional
workers. Graduates of 1- or 2-year training programs often fill these positions; these jobs
usually require specific formal training beyond high school, but less than 4 years of
college.

Most jobs in health services provide clinical services, but there also are many
in occupations with other functions as well. Numerous workers in executive,
administrative, and managerial occupations and marketing and administrative support
jobs keep organizations running smoothly. Although many health services managers have
a background in a clinical specialty or training in health services administration, many
enter these jobs with a general business education.

Each segment of the health services industry employs a different mix of health-
related occupations and other workers.

Major Achievements in Health Sector in 2008-09

• Addition of Human Resources: 2231 Specialists, 10,489 MBBS Doctors, 17,979

Staff Nurses, 32,321 Auxiliary Nurse Midwives [ANMs], 7,590 Para Medics
employed on contract under National Rural Health Mission.

• Conversion of Health Facilities into 24 X 7: A total of 11,135 Additional Primary

Health Centres [APHCs], Primary Health Centres [PHCs], Community Health
Centres [CHCs] and other Sub District facilities are functional 24 X 7.

• Janani Suraksha Yojana Beneficiaries: Over 1 crore women covered under Janani
Suraksha Yojana [JSY] so far.

• ASHAs/Link Workers: 6.25 Lakhs Accredited Social Health Activists [ASHAs]/

Link Workers selected, 5.40 lakh trained at least in 1st module and 2.43 lakh with
Drug kits in their respective villages.

• Rogi Kalyan Samitis: 547 District Hospitals(DHs), 4038 Community Health Centres
(CHCs), 662 other than CHC Hospitals, 16735 Primary Health Centres (PHCs) have
their own Rogi Kalyan Samitis(RKSs) with untied funds for improving quality of
health services.

12
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
• Village Health & Sanitation Committees: 2.98 lakh villages (nearly 50%) have
their own Village Health & Sanitation Committees out of which 2.10 lakh have
received Rs.10,000/- untied grant for local action.

• Village Health & Nutrition Days: 30.48 lakh in 2006-07, 44.76 lakh in 2007-08 and
13.35 lakh so far in 2008-09, Village Health & Nutrition Days organized at ICDS
Centres to reach basic health services.

• Mobile Medical Units [MMUs]: 212 MMUs functional so far.

• AYUSH: 4853 health facilities have co-located AYUSH services. 3933 AYUSH
Doctors and 831 AYUSH paramedics added to the system.

Assets

Health Services
Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Gross fixed assets 2276.75 2387.41 2603.01 2878.81 3344.52 3761.98

13
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Land & building 689.36 747.22 788.19 875.95 1017.02 1113.08
Plant & machinery 1045.62 1118.51 760.49 766.68 1658.05 1841.16
Transport & comm. equipment/infrastructure 20.96 22.75 26.4 31.92 37.32 43.24
Furniture,amenities & other fixed assets 212.71 288.3 787.36 1002.4 443.12 469.17
Capital work-in-progress 239.56 191.52 226.98 167.72 175.93 287.67
Intangible assets 4.86 19.31 27.24 29.73 18.55 15.79

Net pre-operative expenses pending allocation 63.68 0 0 4.66 9.8 7.14

Net lease reserve adjustment -1.41 0 0 0 0 0
Less: Cumulative depreciation 477.89 569.27 672.19 813.98 951.37 1043.28
Less: Arrears of depreciation 0 0 0 0 0 0

Net fixed assets 1797.45 1818.14 1930.82 2064.83 2393.15 2718.7

Investments 141.38 161.82 183.94 1046.06 1125.04 1548.81

Equity shares 88.97 103.92 104.96 845.46 865.07 1060.37
Preference shares 0 0 0 0 0 0
Mutual funds 34.67 25.66 43.4 133.05 149.66 398.88
Debt instruments 2.18 21.14 25.79 25.81 25.81 25
Approved securites (slr/statutory req.) 0 0 0 0 0 0
Assisted companies 0 0 0 0 0 0
Others 15.58 11.12 9.81 41.97 84.71 64.77
Less: Provision for dimunition in value of investments 0.02 0.02 0.02 0.23 0.21 0.21

Group companies 84.01 98.97 99.75 837.81 855.89 1048.93

Non-group companies 41.81 31.75 49.15 141.24 159.38 435.32

Market value of quoted investments 99.39 27.68 48.32 118.44 66.78 134.81

Deferred tax assets 28.05 30.86 39.51 51.19 63 56.8

Current assets 416.46 480.22 654.77 910.62 1128.7 1371.69

Cash & bank balance 75.02 75.77 113.6 165.77 236.36 289.25
Inventories 66.79 73.73 84.02 102.98 124.23 162.65
Receivables 229.05 271.51 374.04 500.78 581.42 699.8
Expenses paid in advance 45.6 59.21 83.11 141.09 186.69 219.99

Loans & advances 55.21 69.79 53.83 103.06 170.09 441.5

Deferred revenue expenditure 52.78 55.55 56.45 15.67 11.42 8.07
Total assets 2491.33 2616.38 2919.32 4191.43 4891.4 6145.57
No of companies 69 79 83 81 74 62

Liabilities

Health Services
Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Net worth 690.75 848.26 1047.47 1762.09 2127.46 3170.01

Authorised capital 979.68 1030.63 1080.78 1274.67 1360.82 1426.07
Issued equity capital 687.76 732.23 802.05 930.67 955.92 1007.49
Paid up equity capital (net of forfeited capital) 682.78 727.33 797.48 925.48 951.06 1002.89

14
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Forfeited equity capital 1.04 1.03 1.02 1.03 1.21 1.18
Paid up preference capital (net of forfeited capital) 5.64 5.09 30.13 6.15 68.11 52.51
Capital contibution, suspense and application money 20.21 12.7 23.08 290.97 48.55 200.23

Reserves & surplus -18.92 102.11 195.76 538.46 1058.53 1913.2

Free Reserves 308.82 365.73 465.23 826.84 1368.79 2266.45
Security premium reserves (Net of deductions) 174.64 180.27 229.63 540.14 958.37 1848.63
Other free reserves 134.18 185.46 235.6 286.7 410.42 417.82
Specific Reserves 80.85 83.33 86.47 58.98 55.58 16.27
Revaluation Reserves 56.37 42.34 41.27 54.18 53.41 53.27
Less Accumulated losses 464.96 389.29 397.21 401.54 419.25 422.79

Total borrowings 1149.7 1107.34 1200.85 1650.33 1857.77 1962.41

Bank borrowings 524.6 429.2 538.56 1051.06 1225.75 1262.46
Short term bank borrowings 57.31 65.25 82.39 84.1 145.64 199.73
Long term bank borrowings 467.29 363.95 456.17 966.96 1080.11 1062.73
Financial institutional borrowings 226.19 135.4 101.56 71.08 63.65 63.51
Central & state govt. (usually sales tax deferrals) 0 0 0 0 0 0
Debentures / bonds 64.73 72.32 72.4 53.23 39.78 34.72
Convertible 0 0 0 0 17.62 17.62
Non-convertible 64.73 72.32 72.32 53.15 15.3 0
Fixed deposits 48.85 42.21 26.31 15.76 19.28 16.83
Foreign borrowings 6.03 25.25 32.76 13.87 31.48 19.89
Of which : euro convertible bonds 0 0 0 0 0 0
Borrowings from corporate bodies 122.39 191.43 230.18 311.34 369.95 432.1
Group / associate cos. 66.95 69.57 122.31 198.72 182.78 205.48
Borrowings from promoters / directors 9.55 12.55 13.02 10.86 9.39 12.94
Commercial paper 0 0 0 0 0 30
Hire purchase borrowings 1.23 0.87 0.15 0.21 0.05 0.08
Deferred credit 2.61 0 0 16.8 17.57 10.81
Other borrowings 143.52 198.11 185.91 106.12 80.87 79.07

Secured borrowings 948.59 844.23 926.21 1268.38 1234.46 1412.85

Unsecured borrowings 201.11 263.11 274.64 381.95 623.31 549.56
Current portion of long term debt 35.01 79.93 52.62 529.88 663.09 102.19

Current liabilities & provisions 533.71 521.21 526.59 629.1 746.69 845.99
Sundry creditors 178.39 175.76 204.51 256.61 315.48 352.41
Acceptances 7.74 16.25 7.88 13.25 27.26 20.19
Deposits & advances from customers & employees 45.72 41.73 18.9 23.41 38.8 47.46
Interest accrued 150.9 85.37 45.15 46.35 34.11 44.93
Share application money 0.12 0.05 0.02 0.26 0.02 0.02
Other current liabilities 72.49 107.09 126.75 108.88 126.14 129.2
Provisions 78.35 94.96 123.38 180.34 204.88 251.78

Deferred tax liability 117.17 139.57 144.41 149.91 159.48 167.16

15
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY

Total liabilities 2491.33 2616.38 2919.32 4191.43 4891.4 6145.57

Net worth (net of reval & DRE) 581.6 750.37 949.75 1692.24 2062.63 3108.67
Contingent liabilities 284.59 228.31 282.98 312.58 619.18 902.64
No of companies 69 79 83 81 74 62

Profits

Health Services
Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

PBDITA 223.84 279.03 367.94 378.98 552.26 588.51

Depreciation 101.29 123.45 133.83 154.59 165.25 179.67
Amortisation 10.33 9.13 9.96 8.47 6.88 5.51

16
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY

PBIT 112.22 146.45 224.15 215.92 380.13 403.33

Interest paid 72.88 103 102.7 108.43 157.45 180.12
Financial charges on instruments 0 0 0 0 0 0
Fee based financial services expenses 0 0 0 0 0 0

PBT 39.34 43.45 121.45 107.49 222.68 223.21

Provision for direct tax 32.36 41.2 44.69 43.92 66.72 88.67
Corporate tax 14.63 21.64 37.93 44.56 57.44 62.68
Deferred tax 20.8 25.2 13.27 12.28 14.34 27.22
Less: Deferred tax assets / credit 3.09 5.67 6.59 16.75 9.53 7.11
Other direct tax 0.02 0.03 0.08 3.83 4.47 5.88
Fringe benefits tax 0 0 0.02 3.79 4.43 5.83
PAT 6.98 2.25 76.76 63.57 155.96 134.54
PAT (as reported by the Co.) -9.24 2.93 82.48 64.8 135.03 134.29

Prior period & extra-ordinary income 27.18 25.37 63.95 13.46 77 19.89
Prior period & extra-ordinary expenses 3.86 22.13 15.86 12.86 9.2 3.2
Net prior period & extraordinary transactions -23.32 -3.24 -48.09 -0.6 -67.8 -16.69

PBDITA net of P&E 200.52 275.79 319.85 378.38 484.46 571.82

PBIT net of P&E 88.9 143.21 176.06 215.32 312.33 386.64
PBT net of P&E 16.02 40.21 73.36 106.89 154.88 206.52
PAT net of P&E -16.34 -0.99 28.67 62.97 88.16 117.85
Distribution of profits (%)
PBDITA 100 100 100 100 100 100
Depreciation & Amortisation 49.8659757 47.5146042 39.0797413 43.0260172 31.1682903 31.4659054
Financial charges 32.5589707 36.9135935 27.9121596 28.6110085 28.510122 30.6061069
Tax 14.4567548 14.7654374 12.1460021 11.5890021 12.0812661 15.0668638
PAT 3.11829878 0.80636491 20.8620971 16.7739722 28.2403216 22.8611239
Non--provisions for: 9.28 25.66 0.26 0.26 0.26 0.06
Diminution in investement 0 0 0 0 0 0
Sundry debtors 0 0 0 0 0 0
Loans & advances including NPAs 0 0 0 0 0 0
Loans & advances to group cos. 0 0 0 0 0 0
Interest expenses 9.24 25.6 0 0 0 0
Power expenses 0 0 0 0 0 0
Gratuity 0 0.02 0.02 0.04 0.04 0.04
Others 0.04 0.04 0.24 0.22 0.22 0.02
No of companies 69 79 83 81 74 62
Income & expenditure

Health Services
Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Total income 1217.97 1527.09 1881.83 2263.92 2848.63 3294.15

Sales 1175.73 1476.36 1777.83 2206.27 2717 3166.29
Industrial sales 1.2 0.78 25.46 2.75 25.11 27.85
Income from non-financial services 1174.53 1475.58 1752.37 2203.52 2691.89 3138.44
Income from financial services 6.39 16.75 15.21 31.54 42.62 92.72
Interest 3.82 5.55 7.55 9.61 14.68 40.49

17
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Dividends 0.17 0.47 2.23 8.23 4.5 11.9
Treasury operations 1.56 9.24 2.88 5.29 6.44 19.53
Other income 8.67 8.61 24.84 12.65 12.01 15.25
Prior period income & extraordinary income 27.18 25.37 63.95 13.46 77 19.89
Change in stock 0.12 0.56 -17.39 6.83 4.33 7.55

Total expenses 1211.11 1525.4 1787.68 2207.18 2697 3167.16

Raw material expenses 0.25 0.21 50.1 0.87 1.32 0.92
Packaging expenses 0 0 0 0.13 0.13 0
Purchase of finished goods 9.59 12.1 27.78 16.72 21.65 48.44
Power, fuel & water charges 54.7 65.39 74 80.38 89.19 97.37
Compensation to employees 184.51 227.87 268 336.57 415.68 503.52
Indirect taxes 4.96 5.91 6.63 8.86 11.88 12.64
Royalties, technical know-how fees, etc. 0.12 0.33 0.36 0.4 0.5 0.3
Lease rent & other rent 23.17 28.83 36.48 46.81 58.01 80.09
Repairs & maintenance 43.3 53.18 64.92 79.98 93.79 109.69
Insurance premium paid 3.97 5.15 5.62 7.02 8.93 9.85
Outsourced mfg. jobs (incl. job works, etc.) 0 0.2 0.25 4.04 5.73 11.04
Outsourced professional jobs 16.81 34.25 45.65 37.81 45.24 54.26
Directors' fees 0.13 0.16 0.26 0.41 0.47 0.51
Selling & distribution expenses 28.94 35.8 32.56 52.02 49.83 63.8
Travel expenses 14.79 18.31 21.88 24.39 29.6 36.58
Communication expenses 7.25 8.78 10.63 12.43 13.57 15.34
Printing & stationery expenses 8.86 11.03 14 18.4 21.42 26.02
Miscellaneous expenses 42.01 26.99 32.37 32.04 37.53 46.42
Other operational exp. of indl. enterprises 0.18 1.09 18.47 5.79 2.91 0.04
Other oper. exp. of non-fin. service enterprises 537.02 688.74 770.44 1090.09 1366.94 1576.22
Share of loss in subsidiaries/JVs,etc. 0 0 0 0 0 0
Lease equalisation adjustment 0 0 0 0 0 0
Loss on securitisation of assets/loans 0 0 0 0 0 0
Fee based financial service expenses 2.98 3.09 3.41 7.49 7.02 10.25
Treasury operations expenses 0.11 0.05 0.04 0.99 0.05 0.14
Total provisions 2.55 4.12 4.56 7.61 3.84 6.62
Write-offs 7.74 6.55 7.39 7.97 13.9 9.98
Less: Expenses capitalised 3.55 11.64 15.16 0.31 7.59 10.01
Less: DRE & expenses charged to others 0 0 0 0 0.04 0.04
Prior period & extraordinary expenses 3.86 22.13 15.86 12.86 9.2 3.2

PBDITA 223.84 279.03 367.94 378.98 552.26 588.51

Interest paid 72.88 103 102.7 108.43 157.45 180.12
Financial charges on instruments 0 0 0 0 0 0
Expenses incurred on raising deposits/debts 0 0 0 0 0 0
PBDTA 150.96 176.03 265.24 270.55 394.81 408.39
Depreciation 101.29 123.45 133.83 154.59 165.25 179.67
Amortisation 10.33 9.13 9.96 8.47 6.88 5.51
PBT 39.34 43.45 121.45 107.49 222.68 223.21

18
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Provision for direct taxes 32.36 41.2 44.69 43.92 66.72 88.67
PAT 6.98 2.25 76.76 63.57 155.96 134.54

No of companies 69 79 83 81 74 62

Investments

Health Services
Mar- Mar- Mar-
Rs. Crore (Non-Annualised) 03 04 05 Mar-06 Mar-07 Mar-08

Investments 141.38 161.82 183.94 1046.06 1125.04 1548.81

In equity shares 88.97 103.92 104.96 845.46 865.07 1060.37
Group companies 84.01 98.97 99.75 837.81 855.89 1048.93
Other than group companies 4.96 4.95 5.21 7.65 9.18 11.44
In preference shares 0 0 0 0 0 0
Group companies 0 0 0 0 0 0

19
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Other than group companies 0 0 0 0 0 0
In debt instruments 2.18 21.14 25.79 25.81 25.81 25
Other than government debentures/bonds 2.18 1.14 0.54 0.54 0.54 25
Group companies 0 0 0 0 0 0
Other than group companies 2.18 1.14 0.54 0.54 0.54 25
In bonds/debentures of government/local bodies 0 20 25.25 25.27 25.27 0
In mutual funds 34.67 25.66 43.4 133.05 149.66 398.88
Group companies 0 0 0 0 0 0
Other than group companies 34.67 25.66 43.4 133.05 149.66 398.88
In others 15.58 11.12 9.81 41.97 84.71 64.77
Less: Provision for diminution in value of investments 0.02 0.02 0.02 0.23 0.21 0.21
Non-provisioning of diminution in investments 0 0 0 0 0 0
Book value of quoted investments 45.41 45.42 64.99 68.32 50.43 120.44
Market value of quoted investments 99.39 27.68 48.32 118.44 66.78 134.81
Marketable securities 80.02 70.76 88.6 192.8 184.48 457.01
Investment lodged as security 0 0 0 588.85 609.65 613.22
No of companies 69 79 83 81 74 62

Tools of Analysis

1. Current ratio
2. Operating profit ratio
3. Net profit ratio
4. Return on investment ratio
5. Ratio of current assets to fixed assets

Statistical Tools:

20
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
To predict the future values generally we apply trend analysis. The formulas are
as follows.
Trend Analysis:
Estimation of sales Using y = a+bx

∑ y = na + b ∑x

∑xy = a∑x + b∑x2

Correlation:
Correlation is the degree of association between tow variables and it is
represented in terms of a co-efficient know as correlation. The range of the correlation
co-efficient it is in between -1 and +1. If the correlation co-efficient is negative, then the
variable are inversely proportional and maximum when it is -1, If the co-efficient is 0,
there is bi association between the variables are associated directly and it is maximum
when it is +1.

: _ _

∑(x- x) (y-y)
r= ------------------------
_ _

√ ∑(x- x)2 √∑ (y-y)2

CURRENT RATIO:

The ratio of current assets to current liabilities is called “current ratio”. The
term current liabilities includes creditors, bank overdraft, bills payable, out standing
expenses, income received in advance,etc.Standard expected current ratio:
internationally accepted current ratio is 2:1i.e. Current assets shall be 2times to
current liabilities.

Current assets
Current Ratio = --------------------------
Current liabilities

Table: 1 Calculation of CURRENT RATIO during 2003-2008 (Rs in crores)

21
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
Current
Current
Years Liabilitie Ratio
Assets
s
2003 416.46 533.71 0.78
2004 480.22 521.21 0.92
2005 654.77 526.59 1.24
2006 910.62 621.1 1.44
2007 1128.70 746.69 1.51
2008 1371.69 845.99 1.62

INTERPRETATION
The above table shows the current ratios of the industry from the year 2003 to
2008.The ratio is high (1.62) in the year 2008. It is low (0.78) for the year 2003. It
indicates industry does not follow standard norms and liquidity position of the industry is
not satisfactory.

OPERATING PROFIT RATIOS:-

This ratio indicates the relationship between total operating profit and sales .Net sales
means total sales minus sales returns.
Operating profit
OPERATING PROFIT RATIO = --------------------- *100
Net sales

Table:2 Calculation of O.P.RATIO during 2003-2008 (Rs in crores)

Operating
Years Net Sales Ratio
Profit
2003 112.27 1175.73 10.39
2004 148.42 1476.36 10.05
2005 224.15 1777.83 12.60
2006 215.92 2206.27 9.78
2007 380.13 2717.01 11.34
2008 403.33 3166.29 12.73
Graph no 2

22
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
INTERPRETATION:
The above table shows the operating rations of the industry from the year 2003 to
2008. The ratio is high (12.73) in 2008,and low (9.78) in 2006. We observed the ratios
were continually increases it in last two years during the study period. We inferred that
the operating profit has sales of the industry.

NET PROFIT RATIO:

This ratio is called net profit to sales ratio. It is a measure of management’s
efficiency in operating the business successfully from the owner’s point of view.Net
profit includes non operating incomes and profits.
Net profit after tax
NET PROFIT RATIO = --------------------------*100
Net sales

Table:3 Calculation of N.P.RATIO during 2003-2008 (Rs in crores)

Years PAT Net Sales Ratio
2003 6.98 1175.73 0.59
2004 5.25 1476.36 0.15
2005 6.26 1777.83 4.13
2006 63.53 2206.27 2.88
2007 115.96 2717.01 5.74
2008 403.85 3166.29 4.24

Graph no 3

INTERPRETATION:
The above table shows net profit ratios of the industry from the year 2003 to
2008. The ratio is high (5.74) in year 2007 and it is low (0.15) in the year 2004.we
observed profit ratios were not constant during the study period. It indicates profit
earning capacity of the industry satisfactory.
RETURN ON INVESTMENT RATIO:

23
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
The Ratio is called return on Capital Employed. It measures the sufficiency or
other wise of profit in relation to capital employed Return on capital employed
Operating profit
Return on Investment Ratio = ----------------------- X 100
Capital employed
Table:4 Calculation of R.O.I. during 2003-2008 (Rs in crores)
Operating capital
Years Ratio
Profit Employed
2003 112.27 1840.45 6.09
2004 148.42 1955.60 7.59
2005 224.15 2248.32 9.96
2006 215.92 3412.42 6.32
2007 380.13 3985.23 9.53
2008 403.33 5132.42 7.85
Graph no 4

INTERPRETATION:
The above table shows ROIs of the industry from the year 2003 to 2008. The ratio
is high (9.96) in the year 2005 and low (6.09) in 2003. It indicates the earn capacity of
industry is not poor.

RATIO OF CURRENT ASSETS TO FIXED ASSETS:-

This ratio will differ form industry to industry and, therefore, no standard
can be laid down. A decrease in the ratio may mean that trading to slack. An increase in
the ratio may reveal that inventories and debtors have unduly increased or fixed assets
have been intensively used. This ratio worked out as follows
RATIO OF CURRENT ASSETS Current assets
TO FIXED ASSETS = --------------------------
Fixed Assets
Table: 5Calculation of R.O.C.A.F.A. during 2003-2008 (Rs in crores)
Years Current Assets Fixed Assets Ratio

24
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
2003 416.46 1797.45 0.23
2004 480.22 1818.14 0.26
2005 654.77 1930.82 0.33
2006 910.62 2064.83 0.44
2007 1128.70 2393.15 0.47
2008 1371.69 2718.7 0.48
Graph no 5

INTERPRETATION:
The above table shows current assets to fixed assets ratios of the industry from
the year 2003 to 2008. The ratios is high (0.48) in the year 2008 and low (0.23) in 2003.
The ratios were continually increased year by year during the study period. it indicates
the fixed assets of the industry were intensively used.
CORRELATION BETWEEN INCOME Vs EXPENSES:

Correlation: Coefficient of correlation is independent of change of scale and origin of

the variable X and Y. By change of origin we mean subtracting some constant from
every given value of x and y by change of scale. We can divide or multiply every value
of x and y by some constant.
Σ XY
r= ——————————————
_____ _______
√ Σ(X-X) 2 √ Σ(Y-Y) 2

(Rs in
Corers)
YEAR TOTAL EXPENCES TOTAL INCOME
2003 1211.11 1217.97
2004 1525.4 1527.09
2005 1787.68 1881.83
2006 2207.18 2263.92

25
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
2007 2697.00 2848.63
2008 3167.16 3294.15

Correlation between Expenses Vs Income is = 0.92

INTERPRETATION:
If the evidence from the above table that there is a strong relationship between
total income and total expenses. Because 1% change in total expenses that must be lead
to 0.92% change in total income. It is showing positive relationship between total income
and total expenses.
CORRELATION BETWEEN SALES AND PROFIT:

Correlation: Coefficient of correlation is independent of change of scale and origin of

the variable X and Y. By change of origin we mean subtracting some constant from
every given value of x and y by change of scale. We can divide or multiply every value
of x and y by some constant.
Σ XY
r= ——————————————
_____ _______
√ Σ(X-X) 2 √ Σ(Y-Y) 2

(Rs in Crores)
YEAR INVESTMENT PROFITS

2003 141.38 6.98

2004 161.32 2.25
20085 183.94 76.76
2006 1046.06 63.57

2007 1125.04 155.96

26
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
2008 1540.81 134.54
Correlation between Investment and profit =0.80

INTERPRETATION:

If the evidence from the above table that there is a strong relationship between
investment and total profit. Because 1% change in total expenses that must be lead to
0.80% change in total income. It is showing positive relationship between investment and
total profit
TREND ANALYSIS IN PROFIT

The method of least squires may be used either to fit a straight line trend
Is represented by the equation
Yc = a+bx
In order to determine the values of the Constance a & by the following to normal
equations are to be solved
∑Y= Na+b∑X
∑XY= a∑X +b

27
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
YEARS PROFIT
2003 6.98
2004 2.25
2005 76.76
2006 63.57
2007 155.96
2008 134.54
Estimated income for 2009 183.18

Estimated income for 2010 225.52

Estimated income for 2011 267.00

INTERPRETATION:
From the above table is observed that the trend analyses of health services
industry was increased year by year during the study period 2003 and 2008, because of
increase of sales

SWOT Analysis

Strengths:

• Manpower – English Speaking, highly qualified and techno savvy people

• Safe electronic official recognition for digital signature and E-transactions

• Lower costs of human Capital when compared to developed countries

• Strong and buoyant domestic healthcare industry that facilities upgradation of

skills and introduction of new products

• Hot bed for alternative medicine – Ayurveda, Unani etc.

Weaknesses:

28
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
• Indian Certification not recognized internationally

• Poor domain Skills

• No grading of healthcare orgationations, hence no incentives to standardize and

benchmark

• Lack of international marketing capabilities

• Weak & legal framework

• No openness and transparency in government policies etc.

• Inadequate infrastructure

Opportunities

• Health Insurance

• Medical Tourism

• Hospital Management

• Curative and Preventive Services

• Infrastructure Facilities like Hospitals and Diagnostic Centre

• Training Manpower (doctors, nurses, technicians

• HIPAA compliance of US service providers

• Remote disease Management

Threats:

• Interlinkages between different Modes of GATS

29
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
• HIPAA compliance for Indian service providers

• Too much dependence on the USA

• Backlash against outsourcing in USA

• Competition from other countries who are also strong in Technology Modern &
Alternative medicines EX.China

OBSERVATIONS
 During the study period the industry’s operating profit is high (12.73) in year
2008.because the operating profit shows more effect on sales of the industry.

 The investment was not maintained as for standards during the study period it
indicates the earning capacity of the industry was not good.

 The profitable ratios were in fluctuating position during the study period it
indicates profitability position of the industry was not poor.

 The industry does not follow standard norms while maintaining liquidity. it
indicates the industry’s liquidity position was not satisfactory.

 The industry contained continues increase in assets. it reflects the fixed assets
were intensively used.

30
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY
 The industry contains a positive correlation between investment and profit that is
for every 100% change in investment there is 80% change in profit.

 The industry also has a positive correlation between the income and expenditure
that is every 100% change in income there is 92% change expenditure.

 The trend in profit of the industry is ideal and increase in next years.

Conclusion

By the studying all relevant ratios such as operating Performance, Net

Performance, and the financial Performance of the HEALTH SERVICE INDUSTRY we
can conclude that the Total assets gradually increased but Net worth not Increased more
than operating expenses. The profit after tax is also increasing year by year expects
because the total Net worth is low increased than previous year. When we observe the
other development indicators such as growth performance of the industry it is also
showing the positive growth rate. The trend analysis of the industry which is more
important for the analysis process is also supporting this fact. By the overall observation
we can say that the Health services industry has the more opportunities and attracts many
investors to enter into this sector.

31
APGCMS, RAJAMPET.
 HEALTH
SERVICES INDUSTRY

32
APGCMS, RAJAMPET.