Abhay Soi, CMD of Radiant Life Care, is firm on bringing about a turnaround in quaternary healthcare. Countrys two iconic hospitals “ New Delhis BLK Super Speciality Hospital and Mumbais Nanavati Super Speciality Hospital “ which Abhays firm Radiant Life Care manages stands testimony to his commitment. Collectively these two hospitals “ both inaugurated by Indias first Prime Minister in the 1950s “ have 1000 beds and Abhay has plans up his sleeves to scale this up to 2600 beds, which shall make Radiant one of countrys biggest health care management firms. A finance whiz kid, Abhay has come a long way since his initial years at Anderson where he helped in setting up their financial restructuring business and then his stints at E&Y and KPMG where he led the restructuring services teams. Prior to Radiant, Abhay also co-founded a USD 300 million Private Equity fund
Your specialization has been consultancy in restructurings, turnarounds and later Private Equity, how did you enter the healthcare sector?
Our entry into the healthcare delivery sector was partly by design and substantially by default. In 2008, while we were wrapping up our special situations fund due to the shift in such opportunities to the US and Europe, we had identified healthcare and education as sectors of interest. At that time we got an opportunity to assist in the restructuring and turnaround of IHHS, India a company involved in redeveloping, operating and managing Dr BL Kapur Memorial Hospital. During the course of this exercise the erstwhile promoters of IHHS, India wanted to explore an exit. We acquired the company for USD 40 million and renamed it Radiant Life Care. The trustees of Lahore Hospital Society were familiar with us and encouraged our stepping into the shoes of an operator.
Please tell us about your business model.
We are clear that we are establishing Institutions, which are also commercially viable, rather than a chain of multi speciality hospitals or multiplying our bed capacities. In Delhi, BLK Super Speciality Hospital is a 650-bedded facility, which we are expanding by another 900 beds over the next 5 years. In Mumbai, Nanavati Super Specialty is a 350-bedded facility, which is to be expanded by another 500 beds. We have avoided imposing our own brand name by suffixing or prefixing the same, so as not to dilute the legacy of these institutions. In fact one of the first steps we took was to engage Alok Nanda, a firm specializing in brand architecture for urban infrastructure to help us articulate our aspirations through our logo and brand identity.
In my mind institutions across sectors have certain criteria such as fulfilling social needs of that time, being multi-disciplinary, melting pot for talent, possessing state-of-the-art technology, strong focus on academic, research and in some measure having a history of service. Consequently, most institutions are either state funded or dependent on grants for their survival.
We believe health care institutions are not only viable but commercially attractive propositions. However, there are certain conditions such as location, size and people-connect, perhaps in that order, that are essential.
Location is a key imperative for setting up viable healthcare institutions. On the demand side, metros have the highest purchasing power, growing healthcare issues and lifestyle diseases and the highest shortage of beds in relation to population. On the other hand, not only does the largest and best pool of clinical talent choose to reside in metros but also deployment of high cost technology is most viable there. Delhi and Mumbai are not only the two most attractive cities for healthcare providers in India but we are now present in arguably the best micro markets within these metros.
As healthcare issues become more complex, they require an inter-disciplinary approach. Hosting multiple specialities of reasonable critical mass necessitates large bed inventory at single locations. A successful cardiac sciences programme or an established Oncology or Neuro-centre themselves would require an inventory of 100 to 150 beds each. How would you be able to address requirements for Orthopedics, Solid Organ Transplant program, Digestive and Liver Diseases, Mother and Child program, etc if the bed strength is less than 600 to 700 beds. Case in point was the 18-hour nonstop procedure performed successfully by 40 of our super-specialists across six specialities on 10-month old Nigerian conjoint-babies. The fact that we hosted so many specialties under one roof was essential to undertake this procedure.
An important characteristic of an institution, especially an healthcare institution, has to be peoples faith in it. This faith gets established over years and matures over generations. It helps if the place has been around for a while rather than having to build that faith and confidence from scratch. Interestingly, Pandit Nehru laid foundation stone for both BLK and Nanavati in the 1950s and both these institutions have a legacy of serving citizens in their regions for decades now.
“With commissioning of BLK Super Speciality Hospital, Radiant has registered immense growth and established itself as a unique model in the healthcare delivery sector”
How are you geared to win?
Our business model is different from most healthcare providers. I also believe it is necessary to have an appropriate capital structure to attain this vision. In the first 5 to 7 years of the life cycle of each healthcare institution it is important that leverage is low and source of capital is neither private equity nor public in order to set up the fundamental building blocks of values which have long gestation periods but significant upfront costs. One cannot be on a quarterly treadmill being forced to compromise long term values for short and medium term gains. At Radiant, we do not encourage leverage and would not consider public markets for another 3 years.
My background as a turnaround specialist and private equity enables me to undertake distressed transactions which are inherently undervalued and provides me both an understanding and access to capital.
Radiant has enjoyed phenomenal success and has an enviable track record with BLK Super Speciality Hospital. Are you satisfied?
I am an outsider in the business who initially brought learnings from other sectors and objectivity to the table. First few years there was both skepticism and apprehension amongst both clinicians and management to join me. Over the years, however, we have been able to establish our reputation of being transparent, forthright and employers of choice within the sector. Consequently, we are enjoying both financial and reputational success whether by winning the gold award in the Asian Health Care Awards 2013, 2014 amongst over 300 entries from 9 countries or being named among the top 10 multi speciality hospitals in the NCR region consistently or winning the Lumen Award for fastest response in acute heart attacks. We obtained NABH accreditation within the first 8 months of our existence and are in line for JCI in the current year. On the other hand our Occupancy, Revenue and EBITDA has increase by CAGRs of over 40%, 55% and 100% respectively since commissioning in 2010.
Are we satisfied? Not in the least.
For how much did you acquire BLK Super Speciality and now Nanavati Super Speciality hospital?
We have not acquired either facility. We have entered into Operations and Management arrangements with Trusts which continue to own the facilities both movable and immovable. Under this arrangement, we assist in developing, financing, managing and operating hospitals in accordance with the trusts objectives. Most of the hospitality players, both domestically internationally, operate under Operations and Management arrangements and many hospitals under the larger corportate chains of hospitals in India are managed in the same manner. However, there is a slight difference. We do not impose our brand on these properties but build on the legacies of these institutions by reintroducing them in contemporary avatars.
What made you choose Dr Balabhai Nanavati Hospital?
Dr Balabhai Nanavati Hospital is truly an iconic institution in Mumbai, intricate to both its history and social fabric. The foundation stone of the hospital was laid by Pt Jawaharlal Nehru and Mahtama Gandhi visited the facility to bless it. On Gandhi Jis request the first patient at the hospital was a harijan. Mother Teresa inaugurated the cancer centre and was even admitted for ailments to the hospital a few times. Even today the Sisters of Charities bring the destitute to the hospital who are looked after free of cost. So many in the city and region have pleasant memories of being looked after with compassion here.
Besides its rich legacy, the location, pool of skilled clinicians and workforce, ability to scale up in near future were attractive propositions. In terms of technology, it has amongst the best facilities in Mumbai including 10 modular OTs, 3 Tesla MRI, 4D sonography and a brand new cath lab. In all it fulfilled all the criteria of being a long lasting institution.
Any healthcare provider would be immensely proud to be associated with such legacy. I am happy that the trustees reposed their faith in our abilities and chose us subsequent through a long drawn screening process in which almost all major healthcare players had participated.
What all learnings and achievements do you seek to acquire while working along with Nanavati Super Speciality hospital?
All sorts. We look forward to a fruitful journey along with all stakeholders such as clinicians, management, workers and most importantly the patients. I hope this journey is both a source of learning and achievements in all aspects, and only then would it be truly rewarding and fruitful.
We have now reintroduced Dr Balabhai Nanavati Hospital as Nanavati Super Specialty. In doing so we have stated our aspiration and pledged a high end Quaternary care facility.
Tell us about the charitable work at Nanavati.
The Charity Commissioners Act in Maharashtra necessitates 10% of beds for free services and another 10% for subsidized services to indigent patients with overall cap of 2% of revenues. At Nanavati the extent of free services has always exceeded their obligations. We not only intend to help continue this practice but through expansion would be increasing the total extent of charitable obligations to the underprivileged.
Has there been any change in organizational hierarchy and authority, If yes what are they?
None really. The trust continues to manage its own affairs through its erstwhile trustees, utive council and office bearers and remains in ownership of all assets and employer of personnel while we strengthen management, institutionalize processes, introduce state of the art technology and global best practices, infuse financial resources and help raise finance. The chairman of the board of trustees Mr Priyam Jhaveri is truly a forward looking individual.
What are the challenges faced by the BLK Super Speciality Hospital at the moment and how do you plan to resolve it?
People development is amongst the most important challenges that we foresee for ourselves. We initiated a program for leadership development in October 2012 with very positive outcomes. We are now working to take this to the next level of management to inculcate the strong culture of our Institution further downstream.
“We have entered into Operations and Management arrangements with Trusts at both BLK Super Speciality Hospital and Nanavati Super Speciality Hospital which continue to own the facilities both movable and immovable. Under this arrangement, we assist in developing, financing, managing and operating hospitals in accordance with the trusts objectives”
What is the role of IT in various medical procedures and also hospital administration?
IT is an integral part of our clinical and administrative functions and not just a support department to capture raw data. We believe in deploying technology to have consistent process outputs across functions and to maximize people effectiveness. We have a very strong IT backbone with complete virtualization, which is one of its kinds in healthcare industry. We are putting Gigabyte network for faster response across the hospital. We have top of the line HIS, seamlessly connected to Microsoft Navision for all backend functions. We will be going live with our new PACS solution and CRM application. Helpdesk for Internal customer is our in-house creation, an innovative usage of technology, for which we won Gold Award at Hospital Management Asia in 2013.
What are the latest initiatives introduced at BLK Super Speciality Hospital?
While our legacy value system forms the bedrock of our business, we are a constantly learning and evolving organization. We are working on many initiatives at this time. To further enhance patient safety we have regular clinical audits. We have developed a working antibiotic policy for our hospital to reduce the chances emergence of microbial resistance. On the administrative side, we rolled out an organization wide program to empower our front-line employees. This program won the Gold Award by Hospital Management Asia in 2014. Employee engagement, team work, collective celebration are other areas where we work intensively with our people.
What latest technologies have been introduced in medical and surgery procedures at BLK Super Speciality Hospital?
Our constant endeavor as health care institutes is to be abreast with latest technology for the benefit of patients. We have recently acquired Blood Irradiator that is one of its kinds in the country. We have installed a biplane Cath-lab for our Neuro intervention and Pediatric cardiac program. High Definition minimally invasive instruments for surgical procedures along with plasma sterilizers for safe and effective cleaning are some of the other recent additions. Both the institutes, BLK and Nanavati, are poised to be at the forefront of clinical care in India.
Where do you see BLK Super Speciality Hospital 5 years from now?
BLK has been Delhis fastest growing hospital and each year we have operationalize and filled close to 100 additional beds. Year on year highly specialized programs are being rolled out ever since we took over O & M, and I believe these programs have consolidated in form of true centres of excellence in the region. Over next 3-5 years BLK shall be one of the most preferred Healthcare providers in Solid organ transplants, Undisputed leader in Oncology & Hematopoietic stem cell Transplants, Advanced Laparoscopic, Minimal Access and Robotic Surgery and Digestive and Liver diseases. We are nurturing various sub-specializations under the umbrella of Cardiac sciences, Orthopedics, Neurosciences and Plastic and reconstructive Surgery as the rapid developments in these specialization have necessitated novel approach to structurethese disciplines. I see BLK Super Speciality Hospital emerging as one of the most prominent healthcare institutions with very robust clinical programs and matching resources in form of infrastructure, technology and people.
What are you future plans in terms of development and growth of BLK Super Speciality Hospital?
BLK is poised for exponential growth over next 3-5 years hence we will be busy creating infrastructure and acquiring technology. A lot of growth shall also happen inorganically so we will also be increasing the team size in both clinical and support areas. We have already engaged architect and design firm for the expansion work, the zoning and block planning has been completed and we are curcurrently completing the detailing for clinical areas.
What are your expectations from the new government?
Government should help establish India as a hub for medical tourism globally. Rising at a CAGR of 18%, Medical Tourism is estimated to be USD 32 Bn over the next 5 years. While India is the largest providers of doctors, nurses and technicians to the world and is also the most cost effective in healthcare delivery, however, in-spite of inherent comparative and competitive strengths, India attracts less than 3% of global Medical Tourism traffic.
This is primarily on account of lack of promotion and procedural impediments. On one hand we have been unable to effectively promote India as a viable healthcare destination due to a absence of cohesive marketing strategy, and on the other hand there continues to be hurdles to consumers in the form of high visa fee, cumbersome processes, certification requirement by embassy doctors, visit to police stations, etc.
BJP led Government at the centre has already been talking of 5Ts to harness the true potential of India – Talent, Tourism, Trade, Technology and Tradition; Medical tourism is anchored on these 5Ts itself. Government should remove impediments and promote India as healthcare destination worldwide to gain a larger share of global medical tourism traffic.