The healthcare sector is growing faster than the overall global economy, with healthcare making 10% of the global GDP according to WHO. Empirically speaking, there’s a two-way positive correlation between healthcare spending and economic growth as well, with healthcare spending having a positive impact on labor productivity, personal spending and GDP and economic growth causing an increase in spending on healthcare.
Hospital and Healthcare Industry: An Analysis
The hospital market has been growing at an unprecedented rate. The size of hospital industry was $820 billion in 2021 and is anticipated to reach the $2 trillion figure by 2028 with a Compound Annual Growth Rate (CAGR) of 12.5% according to a report published by Facts and Factors. The report highlights aging population, rise in chronic diseases, improved reimbursement policies, advances in medical science and technology as the key drivers of growth in the hospital industry but also stresses that high service charges and operational costs at private hospitals is a limiting factor in the industry’s growth. The report acknowledged the role Covid-19 pandemic could play in widening the increase in hospital market size.
The recent pandemic showed just how important a role hospitals play in the times of emergency, especially when lives are at stake. The role of hospitals as primary care centers was put to the test during the peak Covid-19 waves in 2020. Approximately 4.6 million people were hospitalized in the US due to Covid-19 according to American Hospital Association report of 2022. Hospitals with proper and surplus equipment as well as well-trained staff played a significant role in flattening the curve around the world while many people lost their lives wherever there was shortage of hospital staff or equipment.
However, it is also noteworthy that hospital industry was under significant financial stress in the short term during the height of the pandemic. The hospitals’ management had to form strategies to increase ICU capacity by re-purposing hospital beds and reassigning nurses and clinicians to staff Covid-19 emergency wings either voluntarily or due to government mandates, leading to a decline in treating non-critical medical problems.
This was coupled with expenses related to unbudgeted procurement of Personal Protective Equipment (PPE) to protect staff, overtime-pay for front-line caregivers as well as procurement of surplus drugs and ventilators to care for the desperately ill constantly coming in. By the end of 2021, drug and ICU expenses incurred by hospitals were 28% and 31% higher than pre-pandemic levels respectively according to the American Hospital Association report.
All of the capital spending and laying-off of non-essential staff and hiring of additional essential staff among other measures led to a dramatic decline in profitability. As a result, hospitals had to suffer significant revenue loss and had to cut expenditures in other areas of medical service. The American Hospital Association report highlighted that 33% hospitals were operating on negative margins due to pandemic stress.
However, with the vaccination drive in full swing, hospitals are set to recover to normal operations and hospital companies could soon see significant inflow of investment. In fact, the larger healthcare industry is already performing significantly better than the past couple of years. Its intraday returns on May 13 were at 1.05%.
Pfizer Inc. (NYSE:PFE), Tenet Healthcare Corporation (NYSE:THC) and HCA Healthcare, Inc. (NYSE:HCA) were some of the prominent names that were in the spotlight in the US in the wake of the pandemic. The last two of these are hospital companies that are included in the list of 10 biggest hospital companies in the world.
With that said, let’s discuss 10 of the biggest hospital companies in the world.
Our Methodology
For this list of 10 biggest hospital companies in the world, we’d be using different metrics that are publicly available like the company’s total assets, net annual income, number of employees and number of branches preferably but not strictly in the first quarter of 2022. However, the net annual income is of course from the year 2021. While all these variables are somewhat mutually dependent, we’d be using total assets as the ranking factor on the list.
Let’s move down to the list of 10 biggest hospital companies in the world.
10. IHH Healthcare Berhad (SES:Q0F.SI)
Total Assets: $10 billion (2021)
IHH Healthcare Berhad (SES:Q0F.SI) is one of Asia’s biggest healthcare groups. It operates and provides healthcare facilities like clinics, hospitals and acute medical services across the world in Asia and Europe. The types of services it provides include primary care like routine check-ups and vaccinations. The secondary and tertiary care include diagnostics, local surgeries and acute treatment.
The company also provides quaternary care services including organ transplants, neurosurgery, plastic surgery and cardiac surgery etc. Its complementary ancillary services include physiotherapy, therapeutic radiology and molecular diagnostics.
IHH Healthcare Berhad (SES:QOF.SI) is based in Kuala Lumpur, Malaysia and employs over 65,000 people, providing services in its 80 hospitals in ten countries with over 15,000 licensed beds. IHH Healthcare Berhad (SES:Q0F.SI) has an annual net income of $360 million.
9. Sonic Healthcare Limited (OTC:SKHHY)
Total Assets: $12.12 billion (2020)
Sonic Healthcare Limited (OTC:SKHHY) is an Australian company that provides diagnostics services in radiology and pathology among other lab services. It operates in Europe, Oceania and North America and employs 37,000 people worldwide. It’s also known for general practice medicine and corporate medical services.
When it comes to profitability, Sonic Healthcare Limited had a net annual income of $900 million in 2021. The company has diversified and expanded farther outside Australia due to limited opportunity within the country.
Sonic Healthcare Limited is not quite as big as Tenet Healthcare Corporation and HCA Healthcare, Inc. as far as total assets go but it is still one of the 10 biggest hospital companies in the world.
8. Ramsay Health Care Limited (ASX:RHC.AX)
Total Assets: $12.43 billion (2020)
Ramsay Health Care Limited (ASX:RHC.AX) is an Australian multinational company and hospital network providing healthcare services across Australia, Europe and Asia. Ramsay Health Care Limited provides specialized services in surgery, rehab and psychiatric treatment. Its UK branches also offer weight-loss surgeries, cosmetic surgeries and hip & knee replacement surgeries. While Ramsay Health Care Limited ranks fifth in the UK, it is the largest healthcare corporation in France, Sweden and Australia.
Ramsay Health Care acquired Elysium Healthcare in December, 2021 which is exclusively focused on mental and neurological health care and provides mental health as well as neurological services in specialized hospitals and community homes across the United Kingdom. The company’s team includes qualified psychologists, psychotherapists, psychiatrists and neurosurgeons for the treatment of wide ranging mental and neurological illnesses.
Ramsay Health Care Limited was founded by Paul Ramsay in Sydney, Australia. It has 77,000 employees worldwide and operates 235 hospitals, rehabilitation centers, treatment facilities and psychiatric units. Ramsay Health Care Limited generates an annual net income of $311 million.
7. Universal Health Services, Inc. (NYSE:UHS)
Total Assets: $13.14 billion (Q1, 2022)
Universal Health Services, Inc. (NYSE:UHS) is a hospital management company based in Pennsylvania, US. Universal Health Services, Inc. owns and operates across the world through 28 primary care hospitals, 335 behavioral health inpatient units, 40 outpatient units and ambulatory centers in 39 US states, the UK and Puerto Rico and employs 89,000 people. Universal Health Services, Inc. generates a net annual income of almost $1 billion.
6. DaVita Inc. (NYSE:DVA)
Total Assets: 17.08 billion USD (Q1, 2022)
DaVita Inc. (NYSE:DVA) specializes in kidney dialysis and provides its services through a network of 2816 outpatient dialysis centers in the US, serving over 200,000 patients. Outside the US, it operates 321 dialysis centers in 10 countries and serves over 3,000 patients. DaVita Inc. employs 69,000 people worldwide
DaVita Inc. has a 37% share in the US dialysis market and generated an annual net income of $162 million in 2021. The company saw a dramatic decline in net profit in 2021 when its net income for 2020 was at $903 million. The company treats End-Stage Renal Disease which requires patients to receive dialysis treatment 3 times a week for the rest of their lives unless they’re lucky enough to receive a donor kidney. DaVita Inc. ranks at 271 on Fortune 500 companies.
The company has several high profile acquisitions to its name. It acquired Healthcare Partners for $4.42 billion in 2012. In 2014, DaVita Inc. acquired Colorado Springs Health Partners with 600 employees and 110,000 patients.
DaVita Inc. is a big healthcare corporation though not comparable in size to Pfizer Inc., Tenet Healthcare Corporation and HCA Healthcare, Inc. but it commands comparable popularity.
5. Aier Eye Hospital Group Co.Ltd. (SHENZHEN:300015.SZ)
Total Assets: $22.3 billion
Aier Eye Hospital Group Co.,Ltd. (Shenzhen:300015.SZ) is China’s foremost ophthalmology hospital group that operates over 720 hospitals in total out of which 611 hospitals are operated in mainland China and 7 in Hong Kong. Aier Eye Hospital Group operates the rest of the hospitals in other parts of the world. The company has 90 hospitals in Europe, 1 in the US and 12 in Southeast Asia.
As of 2020, the number of employees working at Aier Eye Hospital Group across the globe amounted to 36,000. Of these, around 7400 were ophthalmologists and optometrists. The hospital group primarily treats ophthalmic diseases. Their treatments include myopia surgery, cataract, pediatric ophthalmology, fundus disease and lacrimal pathology among others. The foundation of Aier Eye Hospital Group was laid by Bang Chen and Li Li in 2003 and it is based in Changsha, China.
4. Tenet Healthcare Corporation (NYSE:THC)
Total Assets: $26.6 billion
Tenet Healthcare Corporation is a Texas based multinational healthcare company that operates 65 hospitals along with more than 450 healthcare facilities. The daily operations are run by over a 100,000 employees as of 2021. In the same year, the company’s annual net income was over $900 million. Tenet Healthcare Corporation also operates provider-based outpatient centers through its various subsidiaries. The company acquired United Surgical Partners International (USPI) in 2015 that resulted in Tenet Healthcare Corporation becoming the biggest operator of outpatient surgical centers in the US. The company ranked on 167th position in Fortune 500 in 2021.
3. Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)
Total Assets: $39 billion
Fresenius Medical Care AG & Co. KGaA is another company on the list of biggest hospital companies in the world. It provides kidney-dialysis services around the globe. It does so with over 4000 dialysis centers and over 125,000 employees and serves almost 350,000 patients. The company has 38% share in the dialysis market in the US. It is not to be confused with Fresenius SE which has 32% of ownership in Fresenius Medical Care AG & Co. KGaA.
2. HCA Healthcare, Inc. (NYSE:HCA)
Total Assets: $52.20 billion
HCA Healthcare, Inc. is the largest hospital group in the US, operating and networking 226 hospitals. It is headquartered in Nashville, Tennessee and was founded in 1968. As of 2021, the number of people working at HCA Healthcare, Inc. is 285,000 across all its hospitals which generated a net income of $6.80 billion in the first quarter of 2022. Apart from hospitals, the HCA group also operates roughly 2000 sites of primary care as well as urgent care, surgery centers in 21 of US states as well as the United Kingdom. Most of HCA’s hospitals are situated in Texas and Florida with Texas having 45 hospitals and 632 sites of care alone.
The scale of HCA’s operations inside the US are large according to the company, which claims to be responsible for the care and treatment of 50,000 stroke patients annually on average while claiming to be 30% faster than the national standard in DTN treatment for strokes.
1. Fresenius SE & Co. KGaA (XETRA:FRE.DE)
Total Assets: $83.81 billion
Fresenius SE & Co. KGaA (XETRA:FRE.DE) is arguably the giant on the list when it comes to the biggest hospital companies in the world. Fresenius SE & Co. KGaA.
Three of the companies’ ventures and divisions are involved in developing, operating and managing hospitals, care centers and dialysis centers. One of these, Fresenius Medical Care, has already been discussed but for a quick refresher, it operates kidney dialysis centers as well as dialysis-at-home services after Fresenius Medical Care bought NxStage Medical, Inc.
The division Fresenius Helios is a hospital operator with the company owning and operating 110 hospitals with over 30,000 licensed beds. Fresenius Vamed on the other hand, develops, oversees and manages treatment centers.
You can also take a peek at 10 Biggest Healthcare Companies By Revenue and 5 Largest Drug Companies in the World
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This article is originally published at Insider Monkey.
