The rise of private equity (PE) investment in the healthcare will aide growth in infrastructure and ultimately benefit people, Preetha Reddy, Executive Vice Chairperson, Apollo Hospitals said.
Speaking to Moneycontrol on the sidelines of the World Economic Forum in Davos, Reddy said, “PE investors coming in healthcare is good because there is so much infrastructure that needs to be build. We still don’t have enough hospital beds and if they (investors) come, and the infra grows, it will benefit people.”
“We don’t even have 30% of the required hospital beds. We need more investments in healthcare,” she added.
In 2023, there was a heightened interest from PE and venture capital (VC) firms in hospitals, as investments surged by over 15 times, crossing Rs 30,000 crore over a four-year period from Rs 1,921 crore in pre-Covid 2019, according to the latest data from research firm Venture Intelligence.
On question of rising PE investment leading to higher costs for patients, Reddy said, “Cost of healthcare is an input cost which includes manpower and infrastructure. Those cost will depend on how much better options we can get, and we will. It is not about PE that will impact cost as we (hospitals) have a responsibility of providing healthcare at the right price.”
Recently, the healthcare major announced its plan to invest Rs 3,435 crore in the next three years to add 2,300 beds in metros and major cities.
Around 80 percent of the investment will be funded through internal accruals, with the remaining 20 percent sourced from debt financing.
Leveraging AI
Apollo is looking to increase the usage of artificial intelligence (AI) in medical practices and diagnosis. The company recently introduced the technology in health check-ups (Apollo pro health), wherein it predicts the risk of getting any one of major diseases.
“AI can overcome the challenge of access, pricing and cost, and more importantly shortage of skilled labor. In diagnosis, it can play a vital role to help clinicians decide on accurate diagnosis, in pathology help in looking at cancer markers, help surgeons plan better. AI can be leveraged in a lot of areas, and you will see more happening,” she said.
Global leaders at the WEF also pitched for collaborative effort towards climate change which may severely impact healthcare segment.
“We are a bit late, but if we take it up now, it will make a huge difference. The impact of climate change is directly related to health. Unless that can be tackled, we will have an additional problem to health,” she said.
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