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Apollo Hospitals – First-World Health Care at Emerging-Market Prices - page 10 / 19

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705-442Apollo Hospitals

Our practices are on par with the best international hospitals and the general infrastructure is slowly getting better.”  Seizing this opportunity, the family agreed, was not going to be easy.  Suneeta Reddy noted: “Different pieces of the puzzle need to be in place to make medical tourism attractive.  Right now, the broader infrastructure environment is lacking, and Thailand is ahead of the game.   Another important issue is after-care.  A part of our strategy could be to build a clinic in the UK.  This clinic could provide the postoperative care that patients need.”

A critical question for the Apollo managers was how competitive the market for medical tourism would be in the future.  K. Padmanabhan was concerned about China:

One of the big questions is how much medical tourism will go to India and how much will go to China.  At this point, India has a much better private health care system than China.  But the Chinese will spend as much on health care as Indians, and this will act as a catalyst for the development of private health care services.  In terms of skills, we are way ahead of China, but ultimately, the competitive advantage comes from the number of patients doctors are seeing and from their skill sets.

International competition was not the only concern related to a strategy that emphasized international patients.  In an editorial on medical tourism, the Times of India remarked critically:

While aspiring to become a world-class supplier of health care services, India cannot wish away its ailing masses who lie unattended for want of decent health care.  The current health care situation in India is dismal.  The number of hospital beds per 1,000 population, for example, is around one, which is well below the WHO prescribed norms, or even the low-income countries' average of 1.5.  The same shortage extends to the availability of medical and paramedical staff…  Given all this, does it make sense to promote medical tourism?  To be sure, the development of medical tourism will alter India's health care landscape.  While it will give a boost to the private health care industry by catering to wealthy foreign and domestic consumers, it could adversely hit the low-income population.  Medical personnel and infrastructure would be geared to serve the elite.  Moreover, medical tourists will end up driving up health care costs.

A New Vision for Apollo

Dr. Reddy had given his daughters Preetha, Suneeta and Sangita a month to come up with a new vision for Apollo.  The group faced ample opportunities.  But which strategies were most promising?  Much seemed to depend on the future development of the health care market.  Was health care fundamentally a local business?  If there were global opportunities, why did the very best hospitals in the world – institutions like the Mayo Clinic, for example – operate as single institutions in only a few locations?  Moreover, the Reddy family was acutely aware that medical services were unlike other commercial services.  Caring for patients brought great responsibility, and all members of the family deeply cared about public health in India.  Given the enormous challenges at the domestic front, was it perhaps best to focus on developing the market in India?

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