APOLLO GLENEAGLES

HOSPITALS

The next steps for growth

Team Members
• Akshit Jain 19P006
• Deepanshu Jain 19P016
• Kumar Gaurav 19P026
• Saurabh Chhabra 19P045
• Shivam Aggarwal 19P049
• Yashi Mittal 19P060
 Healthcare Industry Overview

GROWTH DRIVERS: INDIA HEALTHCARE

Public healthcare system: - PRIVATE HEALTHCARE SYSTEM IN INDIA SECTOR GROWTH
TRENDS
 Primary Healthcare centres • India accounts for 20 per cent of the world’s disease (US$ BILLIONS)
 Secondary and tertiary care burden
institutions • Government’s spending on healthcare is 1.2 % of the GDP Year Growth
 Medical institutions versus 4.6 % globally
• Inadequate healthcare infrastructure in India (1.1 beds 2008 45.0
per 1,000 people versus the global average of 3 beds per
2009 51.7
1,000 people)
 Market Size (2015) : US$ 200 billion • Increasing medical tourism from patients outside of India 2010 59.5
 Healthcare spending: 4.2% of GDP
(global average of 10.6%)  Patient demographics are changing: 2011 68.4
 Increased working population 2012 72.8
Private healthcare system: -  Increased number of elderly persons
 Increased penetration of health insurance 2014 81.3
 Global healthcare trends  The disease profile is changing: 2015 100.0
 Changing lifestyle and demographics  Lifestyle-related chronic diseases
 Increase in non-communicable diseases 2017E 160.0
 Public healthcare system
implementation issues  Increase in women’s need for healthcare 2020E 280
 Increase in need for timely healthcare in Tier 2 and
 Limited government funding
Tier 3 cities
 Company Overview
Description Revenue Break-up
 Established in 2003 at Kolkata as a multi-specialty tertiary care hospital
[PERC
 Set-up as a joint venture between Apollo Group Hospitals and Parkway Pantai ENTA
[PERC
Limited GE]
ENTA
GE]
 Positioned itself as a leading end-to-end tertiary healthcare institution catering to 80%
Eastern India and the adjoining countries

Financial Performance West Bengal North & East India

Neighbouring Countries
Revenue Growth Profit Growth No. of Surgeries
5,000 350 18,000 Customer Segments
4,500 16,000
300 The patient mix included the following:
4,000 14,000
0%  Self- Sponsored
3,500
GR
:2 250
A G 12,000
G
3,000 C A 200 C 50 10,000
CA 8  Individual Insurance holders
R: %
2,500
R:1
150 8,000  Corporate Insurance holders
2,000
6,000
1,500
1,000
100
4,000 % AHG had tie ups with more than 230
50 2,000
500 corporates contributing more than 32% of
- - 0
09 10 11 12 13 14 15 09 10 11 12 13 14 15 08 09 10 11 12 13 the total revenue
 Service Offerings
Cancer Care Centre
• Covered the spectrum of oncology care- screening,
evaluation, diagnosis, palliative care and rehabilitation.
• Procedures included surgery, radiation, chemotherapy
and bone marrow transplant
Cardiac Centre
• Provided comprehensive cardiac care with specialized
surgical theatres and cardiac intensive care units
• Procedures included angioplasty, valve treatments,
bypass surgery, pace maker implantation etc.
Neuroscience Centre
• Offered treatments ranging from genetic, chronic, aging
to stroke and trauma treatment
• Services included neurology, dementia, memory
disorders, neurosurgery and neuroradiology
Orthopedics
• Offered the entire spectrum of modern orthopedic
management including fractures, joint replacement,
spinal surgery, arthroscopy, sports medicine etc.
Gastroenterology Centre
• Provided specialty treatment for diseases of
stomach, intestines, pancreases and liver.
• It also offered treatment for lever, kidney and
pancreatic cancers and bronchogenic tumors
Multispecialty Surgery Institute
• Provided effective, minimally invasive alternative
to both open surgery and laparoscopy
Apollo Institute of Transplant
• Provided liver and kidney transplant services
• Was backed by comprehensive pediatric and adult
hepatology, nephrology and urology services
Emergency Medicine
• Round the clock critical care facility capable of
handling any emergency anytime, anywhere
following international protocols
 Apollo Gleaneagles Hospital
FOCUS AREAS

QUALITY TECHNOLOGY INNOVATION

CARE
• Differentiated Value
• Accreditation from NABL Offering through • Benchmarking of global
in 6 categories (Clinical integration of modern processes & metrics - Cost,
Biochemistry, technologies Productivity, Customer
Cytopathology, Pathology) Practices, Employees etc.
• Largest Telemedicine
• International Network in Eastern India • Adoption of Six Sigma
Accreditation- JCI (Global Initiatives in areas like
standards) • Diagnostic Robotic & Disposal of Bio- Medical
Digital Technology with Waste & Energy Savings
• Accreditation from BSI better precision 
Group in Food & Beverage
Department
 Customer Orientation & Relationship

Employee satisfaction and retention

• Consultants: supportive culture, comfort factor and flexible compensation

Hiring & retention of • Nurses and paramedical staff: continuous training & skill-building including soft
the best talent skills and career rotation flexibility

Physician’s choice of hospital for secondary & tertiary care

referrals

• Focus on strong and trust-based relationship with the primary care physicians
Engaging the through regular continuing medical education events
physicians
• Critical care specialist team available to visit physician’s clinic

Customer pull and loyalty

• Educational video television series and flexible outpatient department hours

Engaging the end • Mentoring & interactive patient network and guest relations officer under the
customers patient connect program
 Objectives

Maintain leadership
• AGH was widely acclaimed and recognized as the number one tertiary care
01 hospital in Eastern India

• Its success, drew the attention of several leading tertiary care hospitals to the
untapped healthcare delivery potential in Eastern India, which led to increased
competition

Business growth
• India’s healthcare sector had grown at 9.9% CAGR over 2009-15, while AGH’s
02 revenue and EBITDA grew at 20.2% and 15.5% CAGR, respectively over the
same period

• However, India healthcare sector was expected to grow at 22.9% CAGR over
2015-20E and with the trend of increasing share of the private sector, AGH’s
business growth becomes a critical factor
 Challenges regarding Customers

Challenges
Addressing the perception of AGH in the
Actions target segment as a premium facility in terms
of pricing and offerings
Developing a trust-based relationship with
physicians to get referrals for patients Lack of customer loyalty due to the increasing
requiring secondary and tertiary care number of new tertiary care institutions
across Eastern India
Connect marketing and communication
orientation Maintaining customer loyalty and retention
considering the competition and increasing
customer awareness and expectations
 Online awareness sessions
 Setting up flexible outpatient
department timings
 Enabling real-time customer feedback
 Providing strong customer service
 Holding regular interactions between
treated and new patients
 Growth

Challenges

Achieving an annual growth rate of 28–30% against the existing growth rate of 20–22% and the
industry average of 14–15%
01

Actions

Increasing the bed capacity by undertaking an expansion of the hospital at the same location
01

Increasing the average revenue per bed by increasing the number of patients and reducing
the average length of stay for patients by integrating the latest technologies across different
02

specialties

Developing long-term partnerships with physicians to increase the number of patient

referrals
03
 Challenges regarding Operations
Actions
Standardization would ensure quick hospital-to-
home mobility of patients as well as higher
utilizations and returns per bed
Setting up the end-to-end care process of continuous
integration of new technologies with diagnostics,
pharmacy, and the telemedicine network that linked AGH
with the wider Apollo network
Setting up the processes and policies for hiring
the best talent with detailed verification
Conducting continuous training and skill-building
programs for professional satisfaction and growth of
nurses and support staff
Implementing the grouping approach by segregating the
beds, consultants, nurses, and support staff among the
specialties so patients received specialized treatment by
specialized doctors and support staff without a reduced
chance of error or lack of judgment
Challenges
Standardizing the integrated tertiary care
cycle and segregating the care process for
critical versus chronic patients
Scarcity of skilled resources like consultants,
nurses, and support staff
Attrition of skilled resources to the
competitors
Balancing optimal capacity with the need
for grouping, localization, and
decentralization of beds, resources, and
support staff by specialty
Maintaining the standards of clinical
excellence, especially in light of increasing
competition and continuing technological
advancements
 Apollo Gleaneagles Hospital
Key Decision Points to sustain leadership position
 3C’s Analysis

• Need to focus on the self-sponsored and individual

sponsored segment. 32% of the hospital’s patients
were corporate insurance holders
• Need to change consumer perception and spread
awareness: Understood of the hospital as “premium-
CONSUMER
priced tertiary care institution for economically
secure, upper-segment”
• Important to move close to the customers and try be
present in their neighbourhoods COMPANY
• Mission to advocate affordable healthcare and
enable accessibility to underprivileged
segment
• USP: Standard operating procedures,
experienced doctors, tech and cost innovation
• Cardiac was the fastest growing segment
(Exhibit 3) and the company had a centre of
excellence to focus on this

• Largest telemedicine network in eastern India

• Saw potential in the eastern markets for service in remote areas but physical
• Adopted a diversified growth model presence was mandatory to pull patients
COMPETITOR
• Provided facilities at each location depending on • Undertaking six sigma decreasing the average
the customer needs and potential length of stay – beneficial from the POV of
• expansion
Able to attract talent from AGH which helped
them create leverage
 Concentrated Growth Model – Stakeholder Analysis

Patients Nurses and paramedical staff

• Low stickiness because the patients had • Training at a central location allows
to travel all the way to Kolkata for more collaboration but
treatment
• Even high branding interupts the
customer journey due to proximity of
competition

Physicians Doctors
• For physicians in other cities only • Better training and reinvention of
medium of communication is online practices in a centralized format
• Even their perception of the hospital
might be “premium-priced” which is
propagated to the end-customers

Consultants
• Ease for consultants as they can guide
and consult a large number of
physicians, doctors online
Community
• Only virtual engagement with the larger
community
• Mobile services might not be enough to
change the perception and build trust
 Diversified Growth Model –Stakeholder Analysis
Patients
• Focus segment: self-sponsored
• Can closely engage with the hospital
without the need to travel
• Develop trust and brand credibility
• Increased stickiness
Physicians
• Large number of physicians can collaborate
with Apollo and visit it’s hospitals
• Easier to gain referrals and build a bond
Consultants
• Might be unwilling to travel/move to
smaller cities which can lead to a
compromise with quality services
Nurses and paramedical staff
• Would be willing to join the hospital as
presence in their own city
• Manage attrition rate
Doctors
• The underutilization of specific segments
of doctors can be taken care of by
making doctors visit these centers
Community
• More benefit and engagement with the
community
• Can leverage the awareness built
through Mobile Medical Unit Initiative
 Implementation Readiness

McKinsey 7S Framework

Shared Values Skills Style Staff

Focused on continuous Leveraged superior High amount of Hired staff has all the
quest for quality care and human skills to cooperation and required competencies
cure differentiate itself from participative leadership and additional skill
competitors building programs are run

Strategy Structure Systems

Bringing healthcare of The team structure was An integrated system
international standards marked by high amount of comprised of
within reach of every collaboration to elicit the comprehensive facilities
individual. Focus on being best diagnosis and backed by diagnostic,
both ‘quality driven’ and treatment plans pharmacy and support
‘cost efficient’ services
 Your text here Your text here Your text here Your text here

Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet, Lorem ipsum dolor sit amet,

Icons in boxes 4
consectetur adipiscing elit. consectetur adipiscing elit. consectetur adipiscing elit. consectetur adipiscing elit.
Aliquam eget scelerisque Aliquam eget scelerisque Aliquam eget scelerisque Aliquam eget scelerisque
turpis. turpis. turpis. turpis.

Nam ut erat quis purus sagittis Nam ut erat quis purus sagittis Nam ut erat quis purus sagittis Nam ut erat quis purus sagittis
convallis eget eu tellus. convallis eget eu tellus. convallis eget eu tellus. convallis eget eu tellus.