Doctor to the world

The Apollo Group is opening state-of-the-art healthcare clinics in half a dozen countries

Is the Apollo Group about to become the McDonalds of the global medicare business?

It is tying up with franchisees and opening healthcare clinics in countries such as Kuwait and Bangladesh. And it aims to open between 30 and 40 clinics in around eight or nine countries in the next two years.

It's an ambitious gameplan. Apollo already has two fully-fledged hospitals in Colombo and Dubai. A third will open in Dhaka in one-and-a-half years and others are being planned in Ghana, Nigeria, Mauritius and Yemen.

"These are the ones we are looking at immediately, says Dr Pratap Reddy, chairman, Apollo Group.

But the focus isn't entirely on giant, multi-speciality hospitals. In fact, Apollo is moving swiftly to open scores of new clinics in the coming months.

Four will be operational by 2004-end. Agreements have already been signed with franchisees in Saudi Arabia, Kuwait, Nigeria and, most recently, Bangladesh, Apollo eventually expects to have a presence in Pakistan, Nepal, south east Asia and even the UK.

Healthcare is a growth sector in India. So, why is Apollo making this foreign foray? The fact is that the group believes there are clear niches in foreign markets which it is well positioned to fill.

"Our research indicates that primary healthcare overseas "" or at least in the countries we are looking at "" is as fragmented as it is in India," says Ratan Jalan, chief executive officer, Apollo Health and Lifestyle Limited (AHLL).

In fact, the Apollo Group seems to be reacting to opportunities rather than drawing up a specific list of countries that it aims to enter.

Says Jalan: "In fact, the move to go to other countries has largely been a reactive one. People have been approaching us."

Why are foreign businessmen keen to tie up with Apollo? Jalan points out that it's a well-established fact that the Indian doctor is a global brand.

"That's another factor which will draw people to our clinics initially, even in places where Apollo is not a big brand name."

The timeframe for project varies. For instance, Apollo's franchisee in Kuwait, the Yiaco Medical Group, has a building ready, so the clinic there will be opened by June.

But in Riyadh the building has to be constructed from ground up so it will take a little more time.

It's overseas foray isn't going to be at the expense of the Indian market. Two years ago, the Apollo Group set up its first day-to-day healthcare clinic in Delhi through its subsidiary, AHLL.

Today, 15 such clinics are operational "" including nine in the national capital region (five in Delhi) and others in cities like Bangalore, Kolkata and Ahmedabad. But Apollo now has much bigger plans.

By 2006, the clinic tally is projected to be 200 out of which 40 will be overseas.

Apollo likes to call the typical consumer experience at one of its clinics "the 40-minute experience".

The idea behind the clinics was to provide specialist consultation, comprehensive diagnostic services, preventive health check packages and a 24-hour pharmacy available under one roof. "It's about convenience, about providing a one-stop shop of its kind," says Jalan.

The setting up of each Apollo clinic is preceded by an exhaustive feasibility study involving research into "" among other factors "" the demand-supply gap and what medical areas need to be focused on for each region.

The services offered by each clinics will vary depending on the specific needs of each region. For instance, there is a relatively high demand for cosmetic surgery in the Middle East, which is a factor that will come into play for Apollo's clinics in that region.

But then such differences exist even within India. "Our clinic in Gurgaon has physiotherapy, which the others don't have," says Jalan, "because there's greater demand for it in that region."

However, the base model "" specialists' consultancy "" will remain the same across all clinics.

"There isn't as much scope for customisation in our profession as there is in, say, McDonald's," quips Jalan. "After all, the human body is basically the same everywhere."

Fees charged also vary depending on region. Jalan explains how the process works. "Once we've identified a region where we want to set up a clinic, we do a study on the best existing service providers in that region," he says.

"Our tariff structure is then benchmarked against that of these service providers." Accordingly, Apollo tries to offer its services at as low a premium as possible. "What we offer is significantly superior service at competitive pricing."

Jalan expects each clinic to bring in a turnover of around Rs 4 crore within its first three to four years. With 200 clinics planned by 2006, that works out to around Rs 800 crore.

However, the group's 15 operational clinics currently fetch around Rs 10 crore between them. Jalan is quick to point out, "they've only been around for a short time".

The Apollo Group has worked hard to take the grimness out of a hospital or a clinic visit. The clinics have been designed by architect Alfaz Miller, while the staff uniforms have been designed by Ravi Bajaj.

"The layout will be standardised across all our clinics, both in India and abroad," says Jalan.

While the franchisees provide the investment in the overseas clinics, Apollo carries out the research and also helps its partners to get the best deals for equipment procurement.

It also plays a key rol;e in clinic management and staff selection. Each Apollo clinic has between 30 and 35 people working in it, including doctors, nurses, pharmacists, customer care executives and technicians.

The company places great emphasis on product knowledge training. "We hire people based on their attitude, the skills can be taught later," says Jalan.

To ensure that the staff have the right attitude, the company has taken the help of Ma Foi consultants to administer psychometric tests that profile potential employees on various personality factors.

The franchisees also undergo a rigorous customised training programme at Indian Institute of Management Bangalore, to orient them to the needs of the service economy.

Will these overseas clinics eventually become the feeder for something bigger "" like full-fledged Apollo hospitals in other countries?

Says Reddy: "In regions where both clinics and hospitals are operational, the two will work in synergy to provide primary, secondary and tertiary health services."

Jalan adds that some franchisees are keen on bigger projects. "Some of our franchisees have already discussed setting up hospitals with us," he says.

"There is a precedent already," he points out, referring to the 1,000-staff Apollo hospital in Colombo. "For now, though, we want to consolidate the overseas clinics and then take one step at a time."

Apollo aims to have 40 overseas health clinics by 2006 in a range of countries from Bangladesh to Saudi Arabia

It will team up with franchisees in each country and will help to hire staff and get the best bulk deals for equipment procurement

Each clinic should have a turnover of around Rs 4 crore after its third year