Dr.REDDY,Apollo Hospital Group on the group's plan and nations state of health.
apollohospitals.com
P C Reddy, chairman of the Apollo hospitals group, is putting in place a three-tier system to ensure that quality healthcare is available to all, in at least the bigger towns.
The group is also planning to enter the health insurance business, which Reddy sees as a natural business extension. Reddy spoke to Sridevi Srikanth in Chennai on his group's plans and the state of the nation's health.
Business Standard: Apollo has set up its first overseas venture in Dubai, is this a new growth strategy for the group?
P C Reddy: There has been tremendous demand for world-class healthcare services in West Asia. Apollo, with its established presence in India, is cashing in on the tremendous cost advantage that we offer. In Dubai and Muscat we are tying up with locals to provide world-class facilities at far more affordable prices. For instance, a bypass surgery costs $3,000 in India, while it is about $30,000 in the West. A liver transplant costs $60,000 here and $500,000 in the West.
In fact, there is a study that says that by 2005, two-thirds of bypass surgeries in the world will be done in India and China given the cost advantages. We have had patients coming in from Hungary and Athens, simply by looking up our website.
West Asia apart, I am sending a team to East Africa in the next couple of weeks to study the healthcare needs of Kenya, Uganda, Tanzania and Angola. Very soon there will be at least one reference hospital in East Africa. But, although we are taking our expertise and brandname overseas, there remains lot to be done within the country. Apollo's main focus will continue to be India.
How can India, as a nation, cash in on these advantages?
There is urgent need to give infrastructure status to the healthcare industry in the country. This will help attract private investment in a big way into the sector. According to a study done by the Indian Healthcare Federation, India has one hospital bed for 1,300 people while the ratio is 1:250 in the West and 1:90 in Japan. To come anywhere near these figures, we will need Rs 25,000 crore of investment every year for the next 10 years.
My main plea to the government is to put in policies that will help the country emerge as the “healthcare destination” over the next 15 years. The significance of this sector—the largest contributor to global output at 12 per cent—is yet to be realised here. The world healthcare industry is worth $2.6 trillion annually, and if India can capture even 1 per cent of this, it will make a significant contribution to the country's income.
The spinoff to the economy in terms of employment, foreign exchange et al will be tremendous. In a 600-bed hospital, like the one in Chennai, we employ 3,000 people directly. On an average, every hospital bed will provide employment to seven or eight people directly and indirectly.
The general perception is that corporate hospitals like Apollo are expensive and the much-touted health insurance will only make healthcare even more expensive...
At Apollo, we provide our share of free and subsidised treatment for the needy. Besides, for the first time, this year—beginning April—we have held the price line for patients. Otherwise, there will be a routine 10 per cent hike, every year, to cover inflation and routine wages hikes.
Last year, we set up a central purchase committee for all three centres—Delhi, Hyderabad and Chennai—which has been able to effect a Rs 5 crore savings on our purchases. This has been able to absorb the impact of wage increases and hence the bill to the patient remains unchanged.
On insurance hiking medical costs, the US experience cannot be directly related to India. We can learn from their experience and still hold prices down. The primary aim of insurance is to provide access to quality healthcare to all. And, contrary to popular belief, even in the US there has been a conscious effort to reduce medical costs over the last couple of years. Insurance companies are now in direct contact with healthcare providers to reduce costs. While it is true that healthcare prices increased in the past, they have been brought down of late. The aim is to reduce them further.
Is your group readying to enter into health insurance?
That is a natural, logical extension of our business. Insurance companies from the US and UK are already in talks with us, but we would like to wait till a firm policy is in place before formalising any tie-up. Still, we are well placed to play a key role in this sector. We have with us complete health data on some 200,000 people. This could be invaluable resource for any insurance company.
Have you already done some ground work in this regard?
Yes, we have. I believe it is only a matter of time before the insurance sector is opened up. Apollo has already lined up 1,150 hospitals that range from small 20-bed nursing homes to speciality hospitals—and some 4,500 doctors to be part of the Apollo network.
A three-tier system is being set up to ensure that quality healthcare is available within a 5 km radius, in at least the bigger towns. At the lowest level there will be the consulting doctors while at the second, medical centres will be set up. Equipped with diagnostic facilities, these centres will screen patients who have been referred to it by the primary-level clinic. At the apex level, there will be full-fledged hospitals like Apollo and other tertiary care hospitals that join up to be part of the system. A similar system with some 12 hospitals is already working well in Chennai.
How will the system be linked and work as one cohesive unit?
We have commissioned a Hyderabad-based company to do the software for us. The three Apollo hospitals at Chennai, Delhi and Hyderabad that cater to the south, north and central regions will be the primary headquarters while the proposed 23 medical centres will work as secondary headquarters.
The Rs 35 crore software package, when commissioned, will help all three tiers to have online communication and consultation. The main objective is to ensure that patients do not travel long distances to access healthcare unless absolutely necessary. At least preliminary consultation should be within easy reach. A privately held company—Family Health Plan—is being set up to administer the system.
Finally, is India a healthy nation?
First, Indians set appalling standards with regard to health awareness. For example, it is estimated that some two million people die of heart diseases every year. Of this, 30 per cent do not even reach the hospital in time for treatment and die with perhaps the first heart attack.
At Apollo, Chennai, we have at least two cases every week of patients in their prime—age group 25-40—coming in for treatment of heart diseases in advanced stages. This, when technology provides us with facilities to detect the onset of heart diseases even 10 years in advance.
Our Dubai centre, in fact, has this facility. Indians still resist check-ups in the fear that an ailment will be detected. While treating ailments is one part of the story, the easier and less-expensive option is to prevent or at least begin treatment at the very onset of a problem.
Here too, insurance can play a useful role here as it necessarily involves screening of patients. We at Apollo are doing our best to spread awareness on preventive health check-ups but there has to be a public movement, like the anti-smoking campaign in the US in the sixties and seventies, if dramatic results are to be achieved.
Even more disturbing, there really is no authentic data on what diseases we as a race and country are prone to, and if there has been any deterioration or improvement in health standards over the past few decades.
The Indian Health Federation is a small step in this direction. With some 200 members, we as healthcare providers hospitals, equipment providers are trying to do our bit to fill this yawning gap and keep track of the nation's health.
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