Global Hospitals to start Mumbai centre, give stakes to top doctors

Global Hospitals Group, which started a decade ago in Hyderabad, is among the fastest growing multi- superspecialty tertiary-care hospital brands in the country. It has centres in Bangalore and Chennai and plans to open  a centre in Mumbai. K Ravindranath, founder and chairman and managing director, spoke to DNA Money about the current healthcare scenario and his company’s plans. Excerpts:

Could you take us through the journey of Global Hospitals?
I am a gastrointestinal surgeon. When I was in Kings College Hospital in London, several Indian patients there, in spite of spending huge money (over `70 lakh), would die because of non-availability of organs. I realised that something needs to be done back in India to facilitate organ transplant. When the Transplant Act got approval in India, we started Global Hospitals in 1999.

What are the various services offered by your chain?
We started the hospital with a focus on multi-organ transplants. We perform heart and lung transplants along with bypass surgery, valve replacement, angioplasty, etc. We recently performed one small intestines transplant in our Chennai hospital and that’s something we plan to start across our hospitals now. We also specialise in neuroscience and stem cell transplantation.

Is it the niche play that you are banking on?
We are a big player in the niche segment and that’s the only reason we are not going beyond Tier I cities. We are already present in three key metros -- Bangalore, Hyderabad and Chennai. We will soon open in Mumbai. Thereafter, we plan to launch in New Delhi and Kolkata in 3-5 years.

What are the most common transplants?
Today, the number of liver transplants is very high. 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 three are from the Global Hospitals chain.

By when do you intend to make the Mumbai hospital completely operational?
We will start with the out-patients-services followed by day-care surgeries. The hospital will get fully operational in the next 6-8 weeks. The Mumbai centre will have 450 beds, taking the total number of beds in our chain to 2,100.

Are the doctors 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. There will also be some doctors on part-time consulting basis. The ratio between full-time and part-time doctors is 70:30.

Are your other hospitals based on a similar equity stake arrangement?
No. Mumbai is the first hospital we have experimented with this model. We will be exploring the same model for our Delhi and Kolkata centres.

What is the overall cost for the Mumbai hospital?
Land for this hospital was given to us by a family trust at a very low cost. This allowed us to build a very high quality hospital with an overall investment of `350 crore. As doctors are also stakeholders, the project has a debt equity ratio of 65:35. So if you take away the land cost, `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, making it difficult to pass on the benefits to the patients. In the long-term, hospitals should be developed through either asset-light (management contract) or public private partnership model, wherein land is leased to the hospital chain.