Apollo Hospitals of India

Jins Jose Navneet Kumar Vivek Kumar Singh

Overview • Dr. Prathap Reddy had founded Apollo Hospitals

Madras in 1983 as the first corporate hospital in India.

• Apollo Hospitals started as a 150 bed hospital in Chennai in 1983

• It was first comprehensive, for profit hospital in India.

• Today it has over 8500 beds across 50 hospitals in India and overseas

• Apollo Hospitals Enterprises Limited’s turnover for the last 4 years has improved from US $ 13.22 mn. to US $ 55 mn., indicating a compounded annual growth rate of 42.81% p.a. 

Service package @ Apollo Hospitals

basic management principles• respect for individuals & encouragement of

individual growth,• an open and constructive organizational climate• decentralized management• a personal rapport between top management and

all employees

Apollo Hospital Madras(AHM) - Overview• 120 consultant doctors, many of whom had

impressive academic and clinical credentials from North America or the United Kingdom, formed the hospital's elite medical staff.

• It served middle- to upper-income patients who could pay for medical care, and employees of companies that provided a medical care benefit.

• It mainly emphasised on tertiary care—advanced therapy and surgery for patients with advanced or complicated medical problems.

5 Star of Apollo Hospital Madras

AHM – Medical personal• Consultant doctors operated on a fee-for-service

basis.• They paid Apollo rent for the rooms in which they

saw patients, but kept the entire fee they received from patients.

• They set these fees themselves, their own rates, within broad limits set by the hospital.

• Apollo provides strong academic forum for its doctors which help to retain them.

AHM-Medical Technology

• Two of the primary consideration for Apollo was a) High utilization of M/cb) Availability of M/c

AHM -Employees• Employees were the “middle star” for Apollo.

Hence formed core in any planning.• Motivation: employees understood Apollo’s larger

ambitions.• Culture: The1995 awards recognized dozens of

employees, many from the maintenance and housekeeping departments.

• Compensation: Apollo's wages were 10% to 20% higher than those at other local, private hospitals.

AHM- Hospitality

Each employee had to take responsibility for meeting each patient’s every need and desire. And hence• Employees at all levels were trained annually. • The housekeeping staff attended a 30-hour course

over 15 days• Behavioural training focused on communication,

teamwork, attitudes, values, and understanding patients’ expectations.

AHM-Value

It encompasses a number of ways in which Apollo strove to serve its patients better than its competition. And this was achieve by • Patients’ health was the most important measure

of success, so the hospital aimed to provide the best medical outcomes.

• Kidney transplantation at Apollo Madras was well-known, and its 88% success rate met the highest international standards.

• mortality rates for bypass operations was close to 2% to 3%

• Total opportunity cost of hospitalization was kept low by Quick diagnosis and treatment.

Conti..• Quality assurance: The Guest Relations

Department’s 50 staff members interviewed each patient upon admission and again at discharge.

• CHANGE: In the summer of 1994, Dr. Reddy challenged the Apollo Madras family to rejuvenate the hospital’s service through a program of CHANGE.

Management Issues

Reconciling Medical and Business Goals: • Doctor have strong loyalties to their patients, and

hence have strong individual identities. • However, administrators have corporate loyalties

and corporate identities.• Hence potential for conflict was always there.• The hospital resolved many important issues

through committees of consultants and administrators.

Conti..

Marketing Apollo:• Apollo's served individuals, referring physicians,

and corporations throughout India that paid for their employees' health care.

• Apollo offered six categories of rooms, ranging from General Ward, at Rs. 230 per day, to Super Deluxe, at Rs. 1,750 per day, to cater to as wide a market as possible.

Conti..

Individual consumers:• Apollo focused encouraging awareness of

preventive health measures, with the goal of developing long-term, trusting relationships with patients.

• Efforts to reach out to potential patients included programs like “Healthy Hearts Club," "Well Women’s Club," and outreach programs for local schools.

Conti..

Referring doctors:• Primary-care physicians represented a critical

market for Apollo, because their referrals brought in most new patients.

• But Persuading physicians to refer their patients was difficult because they could perceive Apollo as a competitive threat.

• Hence to assuage potential referrers’ worries, Doctors were allowed to join their patients during consultations and visit whenever they wished.

Conti..

Corporations: • Apollo had contracts to provide preventative care

and advanced treatment for employees of about 150 corporations.

• Master Health Check, a popular program, catered mainly to corporate clients.

Hyderabad Apollo Hospital• In 1988, Apollo opened a new, 250-bed hospital in

Hyderabad• It offered the same facilities and services as the

Madras hospital, except magnetic resonance imaging (MRI).

• It was located on 38 acres of land in the hills outside the city.

• It has taken 6 years to show its first profit in balance sheet.

The various reason for the same are

Private competition• Several local, private hospitals had preceded

Apollo in Hyderabad and offered lower prices to both individual and corporate clients.

• And also Hyderabadis and residents of Andhra Pradeshwere more price-sensitive than Madrasis are.

Less famous consultants• The Hyderabad hospital began with a less famous

medical team than Apollo Madras, but built its reputation over time.

• Accordingly, the marketing department publicized the accomplishments of the key consultants.

• To create a self identity it changed its name to “Hyderabad Apollo Hospital”.

Uncertain non-medical quality• There had been some criticism of quality control

in non-medical operations.• Test results came back slowly.• the cafeteria was dirty.

Distance from the City• Apollo had anticipated the problem of the

hospital’s remote site by opening a satellite facility, the Apollo Medical Center, in the center of Hyderabad in March 1988.

• It contained two operating theaters for minor surgery and facilities for stabilizing cardiac arrest and trauma patients.

• The 16 inpatient beds included four in an intensive care unit.

Expansion plans

Licensing:• Dr. Reddy had created Indian Hospitals Corporation

(IHC) as a consulting group to help entrepreneurs build and manage new medical facilities.

• The Apollo group was considering licensing the Apollo name to groups of doctors or entrepreneurs, as long as they retained IHC to manage the facility according to Apollo’s standards.

Health Maintenance Organization:• it would provide all medical care as needed to

members in return for a fixed, annual premium.

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