Apollo Economics

Apollo Hospitals is a healthcare provider in India. The healthcare system in India is oriented towards private enterprise, as government provides very little care, something that is matched with atrocious health outcomes. Most health spending is on an out-of-pocket basis, with only 15% of the people using health insurance to cover their costs. Within this milieu, Apollo Group emerged to win a substantial share of the private hospital market. Growth now depended on rising incomes that would increase demand, but also on improvements to the insurance system that would bring more Indians, in particular the rising middle class, into the health care system. Apollo is examining a couple of different options with respect to enhancing its revenues. The first such option is to establish an insurance system and the second is to differentiate via the creation of super specialty hospitals.

There are two competitive advantages to the insurance...
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