The Indian healthcare landscape is currently navigating a transformative phase where it is moving from fragmented service delivery toward a consolidated, high-tech and insurance-driven ecosystem. As the industry eyes an $850 billion valuation by 2030, the balance between clinical excellence and business viability has never been more critical.
Radhika Bansal, Chief Sub Editor, FE B2B, sat down with Dr. (Prof.) Purshotam Lal, Chairman of Metro Group of Hospitals, to discuss the structural shifts driving this expansion, the complexities of hospital operations, and why trust remains the ultimate competitive moat in an era of private equity and rapid digitisation.
Q. Operating a hospital chain has become increasingly challenging. What are the main operational and financial challenges you see today and what are top performers doing to meet these demands?
The daily operation of hospitals is very complex nowadays. The biggest problem is simultaneous cost pressure from medical technology, consumables, pharmaceuticals and specialised manpower. Advanced cardiac cath labs, hybrid operating theatres and imaging systems require constant investment of capital, while skilled professionals remain in short supply. At the same point of time, pricing transparency, norms related to insurance and package-rate regulations restrict the ability to recover increasing costs. Leading hospital groups are responding through group procurement, consolidation of supply chain, and standardised consumable protocols.
Q. With the expansion of government schemes and private insurance, how is the relationship between hospitals and insurers evolving? Where does the friction still exist?
Government schemes have played a good role in the relationship between patients and insurers by expanding access to tertiary care. Patients who defend early procedures such as CABG or TAVI due to financial problems can now access medical treatments. However, major friction points still remain. Pre-authorisation delays are very disruptive, mainly in cardiac care, where time-sensitive decisions can affect results. Other factors such as claim rejections, coding-related issues, gaps in documentation and packaged disputes also create administrative and cash flow pressures for the hospitals. The way usually lies in standard medical treatment protocols, real-time digital pre-authorisation and stronger collaboration between hospitals, insurers, and regulators.
Q. The entry of private equity and health-tech firms has intensified competition. How is this changing the competitive landscape for traditional hospital groups?
Competitions have intensified greatly, but it is highly positive for patients. Private equity has accelerated professionalisation, better governance, financial discipline and quality measurement across hospital groups. Health tech firms are changing how patients are acquired through teleconsultations, AI-assisted diagnostics, and aggregator platforms. For all hospitals, the choice is now to build, buy or partner in the digital journey. However, capital and technology alone cannot replace clinical excellence. The legacy, trust and reputation of institutions remain powerful competitive moats that cannot be replicated quickly through investment alone.
Q. Digitalisation is often cited as the backbone of modern delivery. How are hospitals integrating digital tools into operations and continuity of care?
Digitalisation has become the foundation for the delivery of healthcare. In the acquisition of patients, research, social media, clinical content and physical visibility now influence the footfall, mainly for elective procedures and second opinions. Diagnostic intervention is even more powerful: when an ECG or report from a referring doctor in a smaller city can be reviewed quickly by a specialist team, geography stops being a barrier. For the continuity of care, electronic health records and interoperability are very much critical. Another major opportunity lies in physician-to-physician referral platforms and real-time availability of beds.
Q. There is a growing push for "on-demand" healthcare. Is it realistic to expect emergency procedures or complex diagnostics within a 30-minute window?
Healthcare is moving towards an on-demand model, but it must be applied carefully by care category. Primary medical consultations have already become in demand through telemedicine. Basic diagnostics such as ECG and blood tests can also achieve fast turnaround in urban areas, though neighbourhood-level access continues to remain a major challenge. However, complex cardiac procedures such as catheterisation, replacement of valve or arrhythmia ablation require teams, sterile environments, anaesthesia support and preparation. The 30-minute metric is meaningful for STEMI door-to-balloon time, but safety cannot be compromised under any conditions.
Q. As expansion into Tier 2 and Tier 3 cities accelerates, what are the key risks and opportunities from a business viability and ROI perspective?
The market of Tier 2 and Tier 3 cities provides a great opportunity since they continue to remain underpenetrated for tertiary care, mainly cardiology. Patients in some cities, such as Haridwar, Rewari, Meerut, and Vadodara, earlier had to travel to areas of Delhi NCR for complex medical interventions. As income increases and insurance penetration deepens, demand is becoming more viable. Low real estate and operating costs also support better unit economics. However, risk still remains. Recurring experienced cardiologists are very hard to find in non-metro markets, and utilisation of the cath lab takes time to build. Long term healthcare leadership will come only from trust, not from scale alone.
