Shares of Indian hospitals, including Apollo Hospitals Ltd, Max Healthcare Ltd, Global Health Ltd, Narayana Health Ltd, Yatharth Hospitals, and Fortis Healthcare Ltd, soared almost 6% on 6 October after India’s first significant redesign of the Central Government Health Services Scheme (CGHS) since 2014.

All of these equities rose after the government revised pricing for roughly 2,000 medical treatments covered by the CGHS. The revised pricing will take effect on 13 October.

Apollo Hospitals shares are up more than 2%, while Max Healthcare, the Nifty 50’s newest entrant, is up about 4%. Yatharth Hospitals and Healthcare Global’s shares are both up more than 4%. Fortis Healthcare shares are also trading higher, up to 6%.

Previously, many institutions with exposure to the CGHS refused to provide cashless treatment, forcing patients to pay out of pocket and then wait months for reimbursement. According to the hospitals, the existing CGHS packages were outdated and did not account for medical inflation since 2014.

The redesign, the first since 2014, will result in a multi-dimensional pricing structure based on four separate parameters. Rationalisation has been done based on accreditation, hospital type, city categorisation, and ward entitlement (a 5% decrease in General Ward).

Hospitals accredited by the National Accreditation Board for Hospitals and Healthcare Providers (NABH) will be treated as the standard base rate, while prices in non-accredited healthcare organisations will be 15% lower than those of accredited ones.

Tier-1, tier-2, and tier-3 cities will all have different rates, with the latter two being 10% to 20% less expensive.

According to hospitals, the move would have a favourable influence, and receivables are in a better shape than before.

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