We are thinking of a mega-app for Manipal Hospitals: Dilip Jose, MD&CEO

India’s second largest private hospital network Manipal Hospitals says integration of Columbia Asia business will be over by September, and it expects one-third of its revenues to come from acquired entities. In a chat with Sohini Das, Manipal Hospitals’ MD and CEO Dilip Jose says that the group is working on a mega app that will be a one-stop shop for patients and increase its geographic reach. It is also looking for more acquisitions in the East.

Any acquisition plans after Columbia Asia and the recent Vikram Hospitals?

Our network offers a complete range of therapies across specialties and we do not see any gaps at this point that need to be filled. Acquisitions would help us enter a new territory of interest or to deepen our presence in an existing location. For example, we are looking for opportunities in the East, which we feel is an under-served market. There is room for growth. We are looking for targets in West Bengal, Odisha. These could be larger acquisitions in that region. Patients from the East always drain into our hospitals in Bangalore.

The scale and geographic spread that we have also enables us to invest in skill sets and technology that can cater to the requirements of multiple hospitals in our chain – for example, organ transplants or robotic surgeries.

How is the integration of Columbia Asia going and by when will the rebranding be over?

The integration of Columbia Asia is going well. While we pushed back some of the related plans by a few weeks to focus on fighting the second wave of Covid-19, we are now catching up on that. Functional integration, internal to both the organisations, is nearly complete and we would now turn our attention to the remaining areas including that of brand transition. We expect to complete it by September this year.

We expect that about a third of our footfall and revenue in FY22 would come from these additions.

Apollo has created an omni-channel digital health company. What are your plans in this space?

Imperatives of the past 15 months certainly brought about changes in customer behaviour in healthcare too. The ecosystem consists of important components outside of a hospital setting – for example, management of chronic diseases involves monitoring, medication and lifestyle elements. Similarly home-based care and digital consultations are growing. Therefore omni-channel capability would be important for healthcare companies. Whether a hospital chain does it all in-house or chooses partners for some of the components is a matter of choice. So long as the customer gets a seamless service across this spectrum, the operating structure should not matter.

We are thinking of a mega-app where the customer or patient gets everything under one roof. We are working on partnerships in this space, which could be region-specific too. We do not want to invest in logistics, and not get into something which is not our core area of strength – for example pharmacy or medicine delivery.

Such a move would enable us to have virtual presence in regions where we do not yet have a physical presence, for example, the North Eastern states. A patient can log in to our app, consult a doctor, book a test (which our diagnostic partner delivers there), order medicines and get them home-delivered. If need be, he or she can be brought into our hospitals in other cities for treatment. Omni-channel thus increases the catchment area.

Is the hospital industry out of the woods yet? Are the revenues and margins back to pre-Covid levels?

Yes, revenues and margins are back to pre-Covid levels and in fact, have exceeded them. A third, or further waves of the pandemic could cause temporary impact, but I do not think it would affect this trajectory of recovery and growth.

However, I am not sure if it is true for the whole private hospitals sector. A very large proportion of it consists of small hospitals and nursing homes which were hit hard by the pandemic and many are still grappling with the challenges, especially the financial ones. Therefore, it might be some time yet before we can say that the entire sector is out of the woods.

However, I think that the underlying features that were driving the demand for healthcare in India over the last decade are un-affected by Covid and we should see a return to that path as we put Covid behind us.

When do you think international patients will be back?

This has clearly been an area that saw large erosion. Given the restrictions on international travel, the number of patients coming to India for treatment has fallen steeply.

For Manipal Hospitals, this segment reduced from about 10% of the revenue to nearly half of that. While growth in the domestic market has off-set this for us, the larger issue is whether this group of patients would return to India or has any other country been able to step in to meet this requirement. The cost advantage that India offered to international medical travellers, along with high quality of outcomes, had resulted in the growth of this stream. While these features would hold good in future too, the gap in the last year might have helped alternate destinations emerge as well.

What are your contingency plans in terms of beds, staff, etc if a third wave strikes this year?

The second wave, both in terms of peak number of hospitalisations as well severity of cases, has tested hospitals to the extreme. We had scaled up our bed counts by 15-20% with temporary modifications and were able to adapt staffing to handle the higher numbers. In addition, we operated Covid care centres attached to several of our hospitals, where we could manage hundreds of patients.

This is the template that we would use in the event of a third wave. The worry of course is about the peak, whether that would cross that of the second. While all hospitals could try and squeeze the infrastructure further, staffing – especially in areas like critical care — would remain a big challenge for the entire sector. Hospitals would also require scaled up support from pharma and medical consumable producers to ensure that the shortages of the kind that we witnessed earlier this year do not recur.

What is the contribution of Covid-19 in your FY21 turnover? Do you see this as a regular and steady revenue stream now?

Covid formed a major segment of the revenue only during the peak months and thereafter other cases returned to access hospitals. Going forward, once reasonable levels of immunity are achieved as a population, this may become one more form of flu that remains in the community.

As rural vaccinations pick up next, can corporate hospitals play a role?

The coverage in metros has been good so far. These were supported by the private healthcare players in most instances. The need now is for an enhanced focus on semi-urban and rural areas to reach the vaccination goals of the nation. This calls for a concerted effort by the entire sector – public and private, to move out of their normal geographies to accelerate the coverage. We are open to do so by sending our teams.

For instance, how we use our teams in Bangalore to support vaccination in other parts of Karnataka or similarly how Manipal Hospitals Vijayawada could assist in other districts of Andhra Pradesh.

What are your plans of scaling up your vaccination drive?

We already have a separate team that is only focussed on the vaccination programme. We have recruited nurses and junior doctors into that team and have a template in place that can collectively administer about 1.5 million doses a month if supplies are available. We are working with all three vaccine providers who are currently approved in the country and would see how we can use our delivery capability in places that are currently under-served and away from the location of our hospitals.

Why did you exit your Malaysia business?

Healthcare delivery in India is a growth sector with significant untapped potential and our intent is to focus on that opportunity. While Malaysia has been a very good experience for Manipal Hospitals and demonstrated our ability to operate successfully overseas, the current context of priorities prompted us to exit.

Disclaimer: This post has been auto-published from an agency/news feed without any modifications to the text and has not been reviewed by an editor.

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