Hospital stocks surge on major CGHS rate overhaul

Hospital stocks surged up to 12% after the government reportedly announced a major update to healthcare rates under the Central Government Health Services (CGHS) scheme.

According to the media reports, the new rates, covering nearly 2,000 medical procedures, will take effect from October 13 and mark the first major revision in over 15 years.

Fortis Malar Hospitals (up 12.58%), Fortis Healthcare (up 6.83%), Max Healthcare Institute (up 5.36%), Krishna Institute of Medical Sciences (up 4.59%), Yatharth Hospital & Trauma Care Services (up 4.77%), Narayana Hrudayalaya (up 4.23%), Aster DM Healthcare (up 3.98%), Apollo Hospitals Enterprise (up 2.49%), Artemis Medicare Services (up 2.60%), Global Health (up 2.02%), Indraprastha Medical Corporation (up 1.63%), Jupiter Life Line Hospitals (up 0.07%) surged.

The old CGHS rates were outdated and too low, forcing many hospitals to deny cashless treatment. Patients had to pay large amounts upfront and wait months for refunds. The new system fixes this by setting fairer prices based on four factors: hospital accreditation, type, city tier, and ward type.

Now, NABH-accredited hospitals will get standard rates, while non-accredited ones get 15% less. Big super-specialty hospitals with over 200 beds can charge 15% more. This is expected to boost hospital revenues, improve cash flows, and encourage more hospitals to accept CGHS patients.

Analysts estimate an average 5-30% rise in procedure rates, which could lift earnings for well-known hospitals. The move also supports sector growth, as private hospitals add thousands of new beds to meet rising demand.

Powered by Capital Market - Live News