Growing with Care: Apollo HealthStreet

Friday, 01 September 2006

With a growth rate of more than 70% over the last 3 years, Apollo HealthStreet recently cemented its position in the segment with the acquisition of US-based Armanti Financial Services (AFS). The deal was valued at $31 million.

Apollo HealthStreet Limited (AHS), the BPO unit of Apollo Hospitals Group, with two centers in Hyderabad and Chennai, is one of the top three healthcare outsourcing companies in India. With a growth rate of more than 70% over the last 3 years, the company recently cemented its position in the segment with the acquisition of US-based Armanti Financial Services (AFS). The deal was valued at $31 million.

	Apollo HealthStreet	Armanti Financial Services
Expected revenue for next year	$16-19 million	$26 million
Number of employees	1200	350
Services offered	Revenue cycle management, medical billing, medical coding, claims administration, claims adjudication and clinical information systems implementation	Health care financial management, physician practice management, hospital revenue recovery and patient financial services outsourcing
Future Outlook
By 2008, Apollo Health Street is aiming at:
Revenue	$100 million
Clients	125
Employees	3,750

Source: Published material and ValueNotes Research

Apollo Health Street is a leader amongst the providers of healthcare revenue cycle management services. It has the solid backing of the Apollo group, which has a large network of medical establishments, and 16,000 employees in India. Apollo Health Street is now looking to grow across geographies with acquisitions of companies.

The company caters to the entire value chain of outsourcing in the healthcare industry - with medical transcription and data entry services at the bottom of the value pyramid, to diagnosis, coding and expert services at the top end.

Estimates by ValueNotes suggest that medical transcription alone presents a $5 billion opportunity. The market for medical coding and billing outsourcing is worth $20 billion. Healthcare offshoring is expected to grow faster than offshoring in general, and presents a huge opportunity.

India, which has emerged as the preferred destination is likely to be a significant beneficiary of the trend towards greater outsourcing. However, the most exciting opportunities of the future lie in higher value adding services. In this context, competition to players like Apollo is scarce, considering that stringent regulation and high skill requirements impose significant challenges on scaling up both in terms of size and services.

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