Expanding healthcare

Tourists and businessmen with a history of heart disease who travel to Udaipur, Jaipur, Jodhpur, Agra, Moradabad, Kanpur, Vadodara or Kanpur, no longer need to frantically call or SMS their cardiologists back home if they experience discomfort.

They can simply rush to the new Escorts Heart Institute and Research Center's (EHIRC) Heart Command Centres located in these cities. Now belonging to Fortis Healthcare, which acquired EHIRC, these centres are an addition to Fortis' core model of spokes and hubs.

Harpal Singh, chairman, Fortis Healthcare, which is a part of the Ranbaxy Promoter Group of Companies, says that the company is also looking at tying up with travel agencies so that information about the facilities can be given along with brochures and bookings.

"Many tourists, especially foreigners, have a perception that medical facilities in these smaller cities are abysmal. This will make travellers aware that these fully-equipped centres can be approached if need be," says Singh.

Fortis Healthcare, which serves close to 4.5 lakh patients every year, is also pumping the required money into Escorts' 150-bed Jaipur hospital, which had remained neglected because of lack of resources during Rajan Nanda's time.

Singh also has his mind set on a pan-India presence for Fortis. Be it under the Fortis brand name or Escorts, the company is all set to cash in on medical tourism, which is making India a preferred destination.

To start with, Fortis is looking at one or two hospitals each in Bangalore, Hyderabad, Mumbai and Kolkata. But Bangalore is a priority.

"We are already in talks with a couple of hospitals in Bangalore and we hope to close the deal in two or three months' time. After the acquisition, we will not take more than six months to redo the hospitals according to specifications and designs that other Fortis hopsitals have," says Singh.

He also adds that the company does not want to wait for the two-and-a-half to three years that any greenfield project takes, and therefore acquisition is a better route.

Why Bangalore? According to Singh, Bangalore is already on the global map and the southern region has a good clinical talent pool, complementing its number of medical colleges that churn out good doctors.

Besides, the region has a nursing and service staff which is the best in the country, especially in terms of handling patient sensitivities. "India's quality healthcare system combined with the low cost of treatment is getting recognition the world over and for Fortis, which is the second-largest healthcare company, having a hospital in Bangalore is a big opportunity," says Singh.

The Bangalore hospital will have a typical Fortis model of multi-speciality coupled with a core strength "" a super-speciality. The company is looking at a size not less than 200 beds, and if market sources are to be believed Fortis will zero in on hospitals like Mallaya and Imperial.

"We will try to own at least one hospital in every large city that can act as the hub for spokes distributed in and around that city," says Singh. And the route taken will be a combination of greenfield projects, acquisitions and management control.

With 250 beds in Mohali and 325 in Escorts, the company is already number one in heart care. And with 165 beds in Amritsar, 250 in Faridabad, 200 in Jaipur and 180 in Noida, the company is aiming at being a 4,000-plus bed hospital by 2011. But the company is not just looking at geographical spread.

Oncology is a new area in which Fortis wants to become a big presence. The company is ready to spend over Rs 1,000 crore on this and facilities are being developed in Gurgaon's Medicity. Medicity will also have a high-end research centre especially focussed on oncology.

With an investment of over Rs 1,200 crore in the last two years and Rs 650 crore that the company spent on buying EHIRC, the company seems to be sound on finances.

However, it will take the company some time to come out of the legal tangle that Escorts is embroiled in. The company clarifies that Fortis has acquired 90 per cent stake in EHIRC and the transaction is complete with respect to the transfer of money, shares and management.

The company also feels the process of conversion of a charitable society into a non-charitable society and then into a part IX company under the Companies Act was also completed in the year 2000, a time when Fortis was nowhere in the picture.

On the issue of free beds under the lease conditions of land allotment by the DDA, the company says it is committed to meeting any obligation that it is required to meet under contractual commitments.

However, it clarifies that since its inception, EHIRC received eight allotments of lands with a total of approximately seven acres. In only one of these eight allotments was there the condition for free beds, making it around 10 per cent of the total land. Even though sources in the company say that EHIRC made an offer to pay less than Rs 20 crore last year in order to be released from the free bed condition, the matter is presently sub judice.

Since the company feels it has made a transparent deal, it is moving ahead with its plans for Escorts hospitals in Delhi, Amritsar, Jaipur and Faridabad.