India's new health cover 'game changer', implementation key - Jefferies

Healthcare Global Enterprises

05/09/2018 08:57

** Jefferies says India's 'Ayushman Bharat', the recently
launched National Health Protection Scheme, addresses the demand
challenges facing hospitals and gives government a tool to
improve affordability and access
    ** Prime Minister Narendra Modi said in August the medical
insurance scheme will kick off on Sept 25, providing about 500
mln poor people annual health cover of 500,000 rupees ($6,966)
to treat serious illness  urn:newsml:reuters.com:*:nL4N1V6299
    ** Jefferies says while scheme is a game changer,
implementation will be key; payment cycle will be key to
generate hospital interest
    ** Says scheme will be a major positive for hospitals in
Tier-II cities and for new centres which are loss-making and are
struggling to boost occupancy
    ** For tertiary care, pricing should be on par with current
scheme to attract higher enrolment with focus on reduction over
time
    ** Given the challenges, it will take over 12 mln
(enrolments) for material benefits to be reflected - Jefferies
    ** Prefers companies with a large presence outside Tier-I
cities and targeting the affordable segment; expects growth in
Tier-I/premium segment to be lower
    ** Jefferies says Healthcare Global Enterprises Ltd
 HEAC.NS  is its preferred pick, retains TP of 315 rupees and
"buy" rating; Narayana Hrudayalaya Ltd  NARY.NS  is best
positioned though execution needs to improve, cuts TP to 290
rupees, retains "buy" rating
    ** Says Apollo Hospitals Enterprise Ltd  APLH.NS  has
remained focused on premium segment and so the new insurance
scheme benefits will be low; retains "hold" rating, raises TP to
1,150 rupees from 1,140 rupees
 ($1 = 71.7700 Indian rupees)

 ((Reuters Messaging:
krishna.vkurup.thomsonreuters.com@reuters.net))