Taking on Cancer

Acute demand and affordability of technology have led to boom in oncology hospitals.

- Rita Dutta

If there is one single super specialty that has caught the attention of investors in recent years, it’s oncology. After the boom in cardiac hospitals and cath labs around two decades back, the current spurt in oncology hospitals has been no less remarkable.

The profile of investors in the segment is unique. Firstly, there is oncology focused chain like Health Care Global Enterprises (HCG) with presence of over almost two decades in the market. Secondly, single location existing cancer hospital like Hyderabad based American Oncology Institute which is on growth trajectory pan India after receiving a funding of $33 million from TPG Growth. Thirdly, there is tertiary care hospitals like the Sterling Group that has recently forayed into standalone oncology hospitals. Fourthly, new entrants like Cytecare Cancer Hospitals.

But interest in oncology was feeble, a decade back. Several multi specialty hospitals that invested in centre of excellence, say, in cardiac, ortho and neuro, shied away from starting oncology as they perceived it as an incremental cost. Setting up an oncology department with radiation therapy required an investment of around Rs 15 crore to Rs 20 crore. The cost of setting up a bunker itself is Rs 1.5 crore.

So, what has led to the sudden spurt of oncology hospitals? First is the burgeoning demand. Around 1 million new cancer cases are added every year. The prevalence of cancer in India is expected to increase to ~7.1 million people by 2020 mainly due to demographic changes, increased exposure to risk factors like tobacco and alcohol consumption and growing awareness. According to Dinesh Madhavan, director, HCG “Due to increase in awareness and cutting edge technology, today more number of patients come in the early stage of the disease.”