How to start a hospital?
Setting up a hospital requires skills that you may not learn in medical schools. These skills can be devising a sustainable business plan, obtaining finances, being more visible to potential patients, and so on. The process is undoubtedly long-drawn and, without prior knowledge, can be a series of trials and errors before bearing fruit.
Nonetheless, the below-mentioned sections cover certain aspects you should know if you want to start your own hospital.
How to open a hospital?
A slew of formalities precedes a hospital set-up. You need to obtain several licences and permits, which include:
- Land and construction
Select a non-agricultural land and acquire permission from the local authority and government to open a hospital wing. Obtain approvals on documents like architect’s plan, land deed, and the sorts.
- Sewage
Seek permission from the local board concerning a sewage and drainage system.
- Electricity and water
Procure permit for water supply and electric meters in the hospital. Gauge the water supply required beforehand to ensure you have sufficient finance for your medical business.
- Fire and health licence
Obtain a fire licence from the local municipality council to attest that the hospital will not pose dangers to the life of patients and health workers. A health licence is necessary before you can open the hospital facility and start treating patients.
Other than these, you need to register the hospital under the Clinical Establishment Act, 2010 (if applicable), Companies Act, 2013, and a one-time registration of the concerned directors. Acquire MSME loans for doctors and hospitals to get these licences.
Importance of Starting a Hospital in India
Starting a hospital in India is crucial for addressing the nation's healthcare challenges. With a large population and significant disparities in access to medical services, new hospitals can help bridge the gap. Quality infrastructure and healthcare facilities are essential to improving overall health outcomes. Hospitals play a vital role in providing necessary treatments, emergency care, and preventive services. Additionally, they create employment opportunities and stimulate local economies. Ensuring the availability of modern medical equipment and trained professionals is key to enhancing the quality of care. Therefore, investing in hospitals is a step toward a healthier, more equitable society.
What licence is required to open a hospital in India?
To open a hospital in India, you need several key licences and approvals. These include the certificate of registration from the local governing body, the licence from the Health Department of your State/UT, a Fire NOC from the fire department, pharmacy license and bio-medical waste authorisation. All these are necessary for the legal functioning of the hospital.
Can a non-medical person open a hospital?
Yes, a non-medical person can open a hospital in India. However, they would still need to employ qualified medical professionals who are registered to practise in India, to run the clinical operations of the hospital. They will also have to comply with all the necessary licensing and registration procedures as stated by law.
How much land is required for a hospital?
The area of land required to set up a hospital depends on the scale of the hospital and the number of beds being planned. However, there are certain guidelines in place, such as Indian Public Health Standards (IPHS) and National Accreditation Board for Hospitals (NABH) which mandate certain minimum area requirements according to the number of beds, departments, and facilities that the hospital plans to provide.
How can one start a hospital?
Starting a hospital requires a mix of proper planning, recruitment of medical staff and managerial personnel, licensing and permission from the necessary authorities, and of course, adequate funding. The first step is to formulate a detailed business plan. This would include project costs, potential revenue, target customer base, and strategic marketing. After that, you need to secure the required licences and get approval from the authorities. The next step would be constructing the hospital building, following the guidelines laid down by IPHS and NABH. Finally, hiring the right medical and support staff, and acquiring the necessary medical equipment is crucial.
Strategies to set up a hospital
Start with a basic plan to open a private hospital business. Two of the foremost considerations are its location and the facilities that you intend to provide. Location plays a determinant role in the undertaking’s success. Evaluate factors like competition and accessibility via public transport facilities to select a suitable location. Decide the services your establishment will encompass after factoring in the local population’s median age.
Once your sort out these details, consider the steps mentioned below. These steps will guide you on how to start a sustainable hospital business.
1. Devise a business plan
Prepare a comprehensive business plan. It should detail every minute expense you need to account for in setting up the hospital facility and carrying out day-to-day activities. This step should ideally be the first step when considering setting up a hospital.
Then, estimate revenue projections and chalk out the roadmap to achieve the same. Spread out expenses only with potential revenue in mind and set aside a nest egg for daily activities when preparing the hospital plan. A detailed plan is also vital to obtain the necessary finance for the endeavour.
2. Acquire hospital finance
Once you have a comprehensive plan, approach financial institutions to set things in motion. In this regard, Bajaj Finserv offers dedicated doctor loans, which you can obtain by submitting only a handful of professional and personal documents.
In most cases, the application gets approved within 24 hours*. Before applying for a loan for doctors, evaluate all the expenses you intend to address with it to avoid under or over-borrowing. Consider the cost of procuring or leasing equipment or hiring staff before proceeding.
3. Buy equipment and machinery
To gain a competitive edge, buying state-of-the-art equipment is imperative. Consider a medical equipment loan to cushion the strain of such investments. Also, you can set up advanced communication systems and computers to speed up administrative processes.
These factors, although initially expensive, pave the way for a profitable and sustainable medical facility. Develop a comely décor, institute strict hygiene measures across the board, and keep sizeable spaces to accommodate more patients as and when necessary. Obtain a doctor loan if any of these outlays exceed the owned capital.
4. Marketing the hospital
Knowing how to open your own hospital is not sufficient for it to be gainful. It is also essential to be visible and effectively communicate your services to the targeted audience. Create an online presence and be consistent. Provide valuable information to establish credibility among patients.
Starting a new hospital can be an overwhelming undertaking. It is important to devise and evaluate everything to the last detail. You need to gain a robust understanding of finance for the business to ensure sustainability.
How much does it cost to set up a hospital in India
The cost of setting up a hospital in India depends on several factors. Are you looking to start a small private hospitalwith specialised care or a hospital with several facilities for general care? How many patients should your hospital be able to accommodate? Once you answer these questions, you will need to find suitable land for the construction of the hospital. The cost of land and construction will depend on the location of your hospital.
Your hospital plan will have several departments such as administration, OPD, emergency care and others. A basic OPD can cost Rs. 50,000 onwards. Each department will require specific equipment to operate. The cost of a high-end dental chair can be around Rs. 2-3 lakhs.
In-patients wards with around 10-20 beds can cost Rs. 5 lakh and upwards. Add around Rs. 5 lakh for purchasing an ambulance with life support. In addition, you have to spend more than Rs. 10 lakh for basic operation rooms and storage facilities. If you plan to put advanced medical equipment in diagnostic rooms, your cost will go up by more than Rs. 20 lakh.
In addition to the infrastructure, you will need funds to hire doctors and specialists who can operate the high-end equipment in your hospital. There will be hospital maintenance costs as well.Other than the essential expenses, you have to set aside funds to cover unexpected requirements in your plan while setting up your hospital business
Frequently asked questions
Yes, many hospitals nowadays are run purely as businesses by businesspeople. Having a degree in hospital management can really help. If you do not have one, hire the best person for the job and keep a close watch on how things are managed.
This is subjective. Usually, the newer ones run on losses for a few years and then achieve profitability. Larger, established ones generally run on profit.
The major permits required to start a hospital are:
1. For land and construction: Including permits for zoning compliance, building approvals, building permits and licenses, occupancy and completion certificates
2. For leased or rented properties: Including lease agreement, owner approvals
3. For utilities and waste management: Including water and electricity permissions, sewage disposal permit
4. Safety and health certifications: Including fire safety license, healthcare certificate
No matter if you run a small clinic or a large multi-specialty hospital, you must have a registration certificate under the Clinical Establishments (Registration and Regulation) Act, 2010. Each state has its own rules, so the process for getting the license will vary depending on where you are.
