'Global Hospitals is a large player in the niche area of organ transplant'

Dr K Ravindranath

An edited version of this Q&A first appeared in DNA Money edition on Wednesday, August 08, 2012.

Starting operations over a decade ago from Hyderabad, Global Hospitals Group is currently among the fastest growing multi super-specialty tertiary care hospital brands with state-of-the-art healthcare centres in Bangalore, Chennai and soon to open in Mumbai. Dr K Ravindranath, chairman and managing director, Global Hospitals Group, in conversation with Ashish K Tiwari, shares his views about the current scenario in the super-specialty healthcare space and their company’s plans in this direction. Edited excerpts...

 

Could you briefly take us through the journey of Global Hospitals Group? How did it really come into being? 

Global Hospitals was started way back in the year 1999. Basically, I am a gastrointestinal surgeon specialising in laparoscopic, liver and pancreas surgery. My heart lies in liver transplantation. I was in Kings College Hospital, London, UK, where several Indian patients used to come for treatments spending huge money (over Rs 70 lakh). Majority of them would die because of non-availability of organs would be first given to local patients and outside patients would always get second priority.

Over a period of time I realised that something needs to be done back in India to facilitate organ transplant. I decided to come back and since the Transplant Act took really long time to get approved in India I did not do transplant surgeries for several years. But when the Act finally came by, we decided to set up a hospital and that is how Global Hospitals was instituted.

Transplant as an area of specialisation requires dealing with a lot of complexities... 

In fact, transplant is the most complex procedure and requires significant back up from other specialties in addition to lot of cutting-edge technology. And when you put all those things, it has to be utilised properly hence we conceptualised a multi-super speciality tertiary care and multi-organ transplant healthcare services facility. We are a very comprehensive centre of excellence offering everything from routine operations, tests, to complex operations like transplants. 

What are your views on organ donations in India? 

It is a huge challenge. Organ donation has to happen and promoted in India in a big way. It is a regular practice in some of the smaller countries like Spain but there is a huge shortage in our country. Awareness about the need for organ donation has to be created with the people in India. Karnataka is the first Indian state where a declaration is made in the driving license itself that the person has agreed to donate organs post his / her death. This approach is very prominent in foreign countries and I’m told the Tamil Nadu government will follow suit soon. Organ transplant has to be done within 4-48 hours of the death of the donor depending on which organ is being transplanted. Each organ has a limitation on how long can it be kept. 

What factors differentiate the various healthcare services offered by your hospital chain? 

We started the hospital focusing on multi-organ transplant because there was no point in doing just standalone transplants. When doing a liver transplant, one should have a high-end facility with complete gastroenterology, liver, pancreas diseases centre. Same is the case with kidney and bladder diseases and transplants. We do heart and lung transplants along with bypass surgery, valve replacement, angioplasty etc. We had recently done one small intestines transplant in our Chennai hospital and that’s something we will start doing across our existing and new hospitals now. Neuroscience is another area that we specialise in and have done a lot of work on brain and spine. We have expertise in stem cell transplantation which is a huge speciality area coming up and we are a major player doing a lot of work in Bangalore and Hyderabad with plans to start soon in Chennai.

Is bone and joint replacement also part of your services offerings? 

Yes it is. In fact, we are now planning to start bone banking in Chennai. Once that happens, the patient will not have to undergo the whole joint replacement if the cartilage is gone as only the cartilage will get replaced. Tissue banking is going to be the future. It’s like a spare part to the body that is why we are creating a bone, cartilage bio, tissue, skin, blood and blood products bank. This apart, stem cell therapy is coming in a big way in the bone and joint replacement area and we will be starting that as well. Out next focus area is Cancer wherein we have started the most advanced centre in Bangalore. We are in the process of starting it in Chennai in the next couple of months and Mumbai will follow soon. In cancer, we do bone marrow transplantation and other things. 

Will it be correct to say that a niche play is what you are really banking on? 

A niche but a larger niche is what we are positioned in the market. We are a very big player in the niche area and that’s the only reason why we are not going beyond the tier I cities in India. We get lot of doctors relocated from other countries like UK, USA, Australia etc. They prefer to come to the metros as compared to small towns and cities. We are already present in three key metros of Bangalore, Hyderabad and Chennai in South India. Adding the fourth Indian metro to our network, we will soon open in Mumbai. Thereafter, New Delhi and Kolkata will happen in the next 3-5 years from now. We will be in all the six metros where we have easy access to human resources. High quality and well-trained human resources is very important for any healthcare services provider like us because only then can we deliver the best. 

What is the mix of domestic and international patients at your facilities in the country? 

The technical expertise and cutting edge work that we do is something which is not only in huge demand in India but also with a host of international countries where advanced procedures and quality healthcare services is still a distant dream. There are many countries like the Middle-East, Africa , Sri Lanka, Pakistan, Bangladesh, Malaysia and so on that lack the quality of medical services like what is offered in India that too at a fraction of the cost they would have to pay in any of the developed economies. Approximately 25% of patients visiting our healthcare facilities are foreign nationals and we see the number growing in the coming years. 

What are the most common transplants and how much do they generally cost? 

Today the number of liver transplants is high mainly because liver disease is becoming very common. Kidney is the next organ that sees large volumes followed by heart and lung. There are just 5-6 centres in the country doing such surgeries of which 3 are from the Global Hospitals’ chain as a result majority of the transplants are done by our centres in Hyderabad, Bangalore and Chennai and Mumbai will get added to this network once it gets operational. A liver transplant would cost around Rs 20 lakh, while it will be 8-10 lakh for heart and lung transplant. The cost involved in a kidney transplant is Rs 4-5 lakh. 

By when do you intend to make the Mumbai hospital completely operational? 

It will be a stage-wise launch. We will start with the out-patients-services followed by day care surgeries post which the hospital will get fully operational. All this will be done in the next 6-8 weeks. The Mumbai centre will have 450-beds taking the total number of beds in the Global Hospitals chain to 2,100.

The doctors, are they on consulting basis or full-time? 

We have partners. In the Mumbai facility, we have 7-8 top-notch doctors who are equity stakeholders-cum-partners and will be working full-time in the hospital. This apart, there will be some doctors on part-time consulting basis. Our model is such that a large number of full-timers provide continuity of care and some exclusive doctors associate with us on a case to case basis. The ratio between full-time and part-time doctors is 70:30 and that is how we drive the organisation. The advantage of full-timers is that they are here for most of the day and night. The patient gets full care and attention. Besides, transplants are such complex procedures we will require full-time doctors to do justice to the patient’s treatment. 

Are your other hospitals based on a similar (equity stake) arrangement with doctors? 

No. Mumbai is the first hospital we have experimented with this model and I am quite happy to have excellent partners. We will be exploring the same model for our Delhi and Kolkata centres when they happen in the coming years. I think this will be a model that many other hospital groups will replicate because the partnership approach gives doctors a sense of ownership. Besides, in the coming years, top-notch doctors would like to have a say in the hospitals they associate with and the partnership model works really well. 

The Mumbai hospital must have called for significant investments. What was the overall cost like? 

Putting up a hospital is capital intensive in general and the Mumbai hospital is no different. Fortunately, land for this hospital was given to us by a family trust (M/s Verma Medicine Research Trust) at a very low cost. So our land cost is very negligible allowing us to build a very high quality state-of-the-art hospital with an overall investment of Rs 350 crore. Given the fact that doctors are also stakeholders in the Mumbai hospital, the project has a debt equity ratio of 65:35.

So if you take off the land cost, Rs 70-80 lakh would be the per bed cost. I try to pursue the asset light model because the brick and mortar approach puts a lot of stress on the hospital and the doctors (management) thereby making it difficult to pass on the benefits to the patients. My view in the long-term is that hospitals should be developed through either asset light (management contract) or public private partnership (PPP) wherein land is leased to the hospital chain. 

In terms of the audience you will be catering to, will it be largely those in the upper middle-class and above? 

We will be available for all the three sections of the society as routine healthcare services will also be offered in the hospital. Our positioning in the market will be among the best in the super-specialty segment however approximately 10% of our beds will be allocated for the weaker section of the society and this is a standard practice with all our hospitals. All services to these patients will be offered at a subsidised cost though medicines and materials will have to be bought by them. In fact, this is part of our arrangement with the Verma Medicine and Research Trust. 

What is the staff strength like in your hospital chain? 

Healthcare industry offers great employment opportunities right from housekeeping boys, nurses and doctors. In fact, every bed created generates employment opportunities for 7 people. While we currently have over 5,000 employees in the hospital chain, we will very easily cross 10,000 employees in the coming 2-3 years.