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Apollo Hospitals – First-World Health Care at Emerging-Market Prices - page 9 / 19





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Apollo Hospitals Group705-442

Apollo’s managers identified four international customer segments likely to come to India for medical treatment.  First, they hoped that members of the 20-million strong Indian diaspora might combine a home visit with medical treatment.  A second target were countries with rationed health care.  To patients in the United Kingdom and Canada, Apollo hoped to provide relief from the famously long National Health Service (NHS) waiting times (see Exhibit 11).  The legions of uninsured in the United States were a third target segment.  At any one time, about 43 million Americans under the age of 65 had no health insurance (see Exhibits 12 and 13).  Some of these uninsured had turned to Indian hospitals in the past.  For instance, a North Carolina carpenter replaced his heart valve at India’s Escorts Heart Institute & Research Centre for a total expense of $10,000, including round-trip airfare and a side trip to the Taj Mahal.17  In the United States, the surgery would have cost  $200,000, with a required initial deposit of $50,000.  The fourth segment were patients from regional markets in which top-quality hospitals and health professionals were hard to find. For residents of neighboring Pakistan, Nepal, Bangladesh, Mauritius and the Maldives, or citizens of African and Middle Eastern countries India was a quality health care location.18

Although the target population for medical tourism was large, for the time being at least, Apollo’s patients were mostly domestic.  Out of the 5,200 hospital beds run by Apollo in India, foreign patients usually occupied about 100 beds.  Most of them came from the Middle East, Africa and countries of South Asia.  Consumer attitudes did not appear to be the problem.  In a recent survey in Europe, two thirds of respondents indicated they would be interested in going abroad for treatment if it was possible to use their national funding.19  And at least in the European Union, it appeared to get easier to travel abroad for treatment.  In a landmark decision, the European Court of Justice forced the German Labor Office to pay for the spa treatment of one of its civil servants.  The employee had decided to take his healing soak in a spa in Italy.  Some private insurers had also started steering clients to countries with cheaper care.  Dutch insurance giant OHRA BV, for example, sent many of its patients with knee problems to a center in Alicante, Spain.  “We pay for airfare and all travel expenses.  In spite of that; it’s still cheaper than caring for them here,” an OHRA spokesman said.20  US health insurer Blue Cross Blue Shield insured patients for treatment at the Wockhardt Hospital & Heart Institute in Bangalore, as did the British health insurer Bupa.21  In general, however, it was not easy to get coverage for treatment abroad.  The NHS, for instance, reimbursed patients only if they received care at a facility that was within three hours of flight from Britain.

To market its services to international patients, Apollo partnered with SITA Incoming, a division of Kuoni Travel (India).  SITACARE, the SITA division dedicated to medical tourism, operated more than 200 offices in India and seven offices in the European Union.  On its website (http://www.sitacare.com), patients were able to choose medical treatments and select hospitals with a few clicks of the mouse.  For example, Coronary Artery By-pass Grafts (CABG), offered at $6,940, were available at seven different Apollo hospitals, including the facility in Colombo.  The website also offered basic medical information and performance data for the Apollo hospitals.  Prospective patients learned that the group had performed 49,000 heart surgeries with a 98.5% success rate.   80% of the bypass operations were done using the beating heart technique.

Apollo and SITACARE co-financed marketing campaigns directed at medical tourists.  “They have a strong handle on the tourism market.  We participate in marketing blitzes with them.  We also develop joint brochures and contact health care brokers,” explained Ashok Anathram, President of Business Development.  In the United Kingdom, health care brokers assisted patients, typically referred by their general practitioner, with packages that included treatment, hotel and travel arrangements, functioning as de facto one-stop shops for medical tourism.  SITACARE received a commission of about 10% to 15% for each patient, about 2% to 5% of which it paid out to referring doctors.

Preetha Reddy, Apollo’s Managing Director, was optimistic about the prospects of developing medical tourism: “Our chairman kept saying that India could be a major health care destination but no one believed him.  Now people have woken up.  India has the potential to be a significant player.  


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