Summary: A leading hospital group set out to build a 500-bed tertiary care hospital but faced soaring capital costs and design inefficiencies. Camomile Healthcare stepped in to reimagine the project—from space planning to sourcing—ensuring every square foot and every rupee served a clinical purpose.
By shifting from “overbuild” to “right-build,” standardizing designs, phasing construction, optimizing spaces, and leveraging global procurement, the team unlocked ₹60 crore in savings without compromising quality.
The result: a smarter, leaner, future-ready hospital blueprint built for sustainable growth.
Exhibit 1: A large hospital group embarked on developing a 500-bed tertiary care hospital to strengthen its regional presence and expand high-quality healthcare access. With a capital requirement of ₹450 crore, the project demanded deep expertise in planning, design, and financial optimization.
Camomile Healthcare was appointed as the advisory partner to guide the organisation across each stage of development. The engagement focused on creating a future-ready, efficient, and right-sized hospital blueprint. Through strategic planning and value-driven design, the partnership aimed to ensure that the investment translated into sustainable operations and superior patient care delivery.
Exhibit 2: The project was challenged by weak financial viability, with an IRR of just 13%—barely equal to the cost of capital—making the investment unattractive. A long breakeven period of 9–10 years further strained feasibility, delaying returns for the hospital group.
Difficult site conditions added significant construction and development costs, pushing budgets upward. Additionally, the project showed marginal NPV, indicating limited long-term value creation.
To complicate matters, future patient demand remained unpredictable, making it risky to commit to a large-scale tertiary facility without redesigning the approach.
Exhibit 3: Camomile tackled the project’s challenges by redesigning the hospital with a value-first mindset—cutting unnecessary costs while safeguarding care quality. The team eliminated gold-plated specifications through right-spec design, ensuring every element aligned with actual clinical needs.
Standardized templates reduced design variability, while phased construction allowed capacity to scale with real demand. Global sourcing strategies lowered equipment costs, and a lean organisational structure improved accountability and efficiency. Space utilisation was re-evaluated across medical and non-medical areas, creating a smarter, more economical hospital footprint.
Exhibit 4: Camomile restructured the hospital’s economic model by focusing on three key drivers that determine long-term financial health—revenue enhancement, operational efficiency (EBITDA), and capex optimization. By balancing these levers, the team created a more resilient and sustainable business model for the 500-bed project.
This integrated approach ensured that infrastructure planning supported cost control while also enabling stronger revenue growth. Together, these strategic shifts positioned the hospital for improved profitability, reduced financial risk, and faster return on investment.
Exhibit 5: The project from an overbuilt design to a right-sized, efficient hospital layout. Medical areas like IP rooms, ICUs, OTs, and OP spaces were optimized to match realistic demand, while non-medical zones such as parking and lobby areas were right-sized to reduce excess.
Construction benchmarks were recalibrated to cost-efficient standards across civil works, MEP, and finishing. This holistic redesign significantly lowered capex while preserving functionality and patient flow.
Exhibit 6: Lean design fundamentally transformed the project’s financial outcomes. With capex optimization alone, IRR improved from 13% to 16% and breakeven dropped to Year 7.
When all levers—design, cost, efficiency, and revenue—were applied together, IRR jumped to 25%, breakeven accelerated to Year 5, and NPV increased dramatically to ₹270 crore. This demonstrates how strategic redesign can unlock over ₹60 crore in value and reshape project viability.
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For guidance on achieving capex optimisation, efficient hospital planning, and stronger financial outcomes, contact raghava@camomilehealthcare.com
