The number of Indian patients paying for medical treatments in cash is dwindling every day, says Bali. These patients once formed the majority, with health insurance policyholders and government scheme beneficiaries paling in comparison. They ensured the lifeblood of a hospital—cash—flowed freely through it. But as more of them opt for health insurance or the government chooses health insurance for them, hospitals are feeling the pinch. Bali doesn’t see this trend reversing. It will only grow, he says.

As a result, smaller, standalone Indian hospitals have been looking to get acquired by larger chains who can absorb the cash flow shocks for a while. But even these larger chains are not immune to the crunch. Delayed and deducted payments from insurance companies are enough to help them operate and maintain hospitals. To help them survive. But they aren’t enough to let corporate hospitals thrive and expand. For this, corporate chains will have to explore other options.

Bali believes that the hope for Bengaluru-headquartered NH and other Indian hospitals is to get more cash-paying international patients. Or, alternatively, take healthcare to them by commissioning new hospitals abroad. The former has limits, as travelling to India for treatment is not viable for most people. A majority of patients in Africa, for instance, cannot afford to travel. With this in mind, Indian hospitals are increasingly looking to expand to developing countries in Africa and Asia.

Home is where the hurt is

The opportunity seems clear as day. There’s demand from people, doctors and governments. NH’s first experiment at this—a multi-specialty hospital in the Cayman Islands—has proved to be a raging success. Its optimised costs have left US healthcare providers insecure. Buoyed by this, the group is looking at more such endeavours. Meanwhile, Indian single-specialty hospitals like HealthCare Global Enterprises (HCG) are in the process of establishing a cancer care network in Africa, and private equity-funded Nephroplus is expanding its dialysis centres in Asia this year.

A silver bullet for the woes of Indian hospitals? Potentially. But as with all opportunities, there are pitfalls and hurdles. The supply of doctors—a key reason Indian healthcare has flourished—is getting scarce in India and even rarer abroad. In addition, while a multinational model for hospitals is something of a Holy Grail in healthcare, no one has really cracked this. Fortis Healthcare tried its hand at multinational expansion 10 years ago. It failed.

Can Indian hospitals overcome these hurdles and make a mark on the global stage? A growing number of players seem to think so. And with Indian regulations rubbing hospitals the wrong way, many are already testing foreign waters in their quest for growth.

For NH, which earned a revenue of Rs 1,866 crore ($260.9 million) in the last financial year, the conversation to look for greener pastures abroad began in April this year. Once its 211-bed multi-speciality hospital in Gurugram, NH’s third in North India, was inaugurated.

Since the inauguration of the Gurugram hospital, NH has tied up to operate the cardiac sciences department for Imperial Hospital in Dhaka, Bangladesh, for a hospital that is expected to be commissioned in the next two months. NH also considered tying up with a hospital in Nairobi, Kenya, but put those plans on hold.

The Gurugram hospital is the perfect example of why Indian hospitals are drawn to foreign shores. A 17-minute drive from India’s busiest international airport, this hospital may have only 60 occupied beds, but about 80% of these patients—either medical tourists or Indians—pay in cash. As soon as the hospital enrols with government schemes and health insurers, it will have more occupied beds. But the share of cash-paying patients, says Bali, will go down.

“As cash-paying patients are being eroded to insurance or scheme patients across the country, cash flow becomes a problem for a hospital. Money starts coming late and with deductions,” Bali says with a sigh.

For instance, payments from the majority of government schemes to NH’s hospital in Delhi—one of the three hospitals Bali manages—have been pending for over 180 days now. The hospital’s chief financial officer spends a couple of hours each day managing a team whose sole job is to get government departments to pay up, he says.