Metropolis Health inks pacts with two Kerala hospitals

To provide lab management services

Metropolis Health Services (MHS), a leading chain of diagnostic centres in the country, has cemented its presence in Kerala in a major way by signing agreements with two hospitals in the state for extending lab management services.

In an exclusive interview with Business Standard, G S K Velu, managing director, MHS, said that it had inked deals with Credence Hospital in Thiruvananthapuram and Wellcare Hospital in Palakkad in this regard. He said these hospitals would outsource the entire lab operations.

MHS currently provides lab management services at the multi-specialty Malar Hospital in Chennai and Ramaiah Hospital in Bangalore, besides the Nawaloka Hospital in Sri Lanka.

MHS is currently in parleys with various hospitals in Kozhikode , Kannur and Kottayam too in this regard, according to Velu.

MHS offers lab management services to hospitals for a period of 7-10 years after entering into contract with them. Velu said the agreement ensures a revenue sharing deal between MHS and its client hospitals.

The Metropolis chain, which posted revenues of Rs 75 crore for the fiscal ended 31 March, 2006, expects to boost the earnings to Rs 150 crore in the current fiscal.

"As most hospitals have diverse activities, they are not able to concentrate on lab services. Earlier, they were not interested in giving these services to third parties. In the past one year, there has been a huge change in the mindset and hospitals have started showing keen interest in partnerships," said Velu, explaining why hospitals seek to have an agreement with firms like MHS these days.

Pointing out that "hospitals have to outsource work to referral labs", he added that, "as we do a larger number of investigations and have centralised purchase, we would be able to bring costs down."

According to estimates, the market for lab services in the country is around Rs 4,000 crore, with around 80 per cent being offered in hospitals. This area has turned itself into a focus area for MHS and the chain hopes to earn one-third of its revenues from lab management in five years.

MHS, which has transformed itself into a leader in hospital lab management (HLM) in the country, provides over 1,500 specialised tests ranging from oncology to genetics and molecular biology.

HLM involves conducting tests to diagnose diseases by an independent professional provider who specialises in pathology, rather than employing hospital staff for the same.

The Metropolis chain of laboratories has 43 franchisees across the country and its own centres in Mumbai, Pune, Chennai, Thrissur, Kochi, Bangalore, Coimbatore, Delhi, Gurgaon, and Jaipur. It operates overseas centres in Dubai, Bahrain, Sri Lanka and Seychelles.