Interview/ Dilip Jose, managing director and CEO, Manipal Hospitals
The Bengaluru-based Manipal Health Enterprises Private Ltd, also known as Manipal Hospitals, is India’s second biggest hospital network, with 33 facilities and more than 9,500 beds and 6,000 doctors. Every year, Manipal Hospitals serves more than five million patients.
Last year, Singapore’s sovereign wealth fund Temasek Holdings bought a majority stake in Manipal Hospitals for $2 billion. Manipal is now on expansion mode. Under managing director and CEO Dilip Jose, it has completed the acquisition of Kolkata-based AMRI Hospitals, and is exploring greenfield and brownfield opportunities. Jose has more than 32 years of experience across sectors, including 18 in leadership positions in health care. Before joining Manipal, he was the group CEO of CARE Hospitals, managing a network of tertiary care facilities.
In an exclusive interview, Jose speaks about his expansion plans and the current strategy with Temasek controlling the majority stake.
Q/ How have been things post Temasek acquiring a majority stake?
A/ Temasek has been an investor in Manipal Hospitals for over six years. They raised their stake from 18 per cent to 59 per cent. Dr Ranjan Pai now holds 30 per cent.
From our perspective, it is the same set of investors. There is continuity, because all investors are familiar with the company and the health care sector in India. There is continuity in management and governance.
We already have a national footprint and want to be in under-served areas of the country. With Temasek’s investments, we would be able to pursue our aspirations smoothly. We are doing well, and have seen a 6 to 8 per cent increase in the number of patients. Our revenues have grown by 15 to 17 per cent in the past one year―well above pre-Covid levels.
Q/ Manipal Hospitals has been on an aggressive expansion mode. What is your strategy?
A/ We are keen to enhance our reach within our existing geographies as well as in newer areas. For instance, in Bengaluru alone we are building three greenfield hospitals, and two of them will become functional in the next 12 months. The third one will be ready in the next 24 months. Another greenfield project―a 350-bed tertiary care hospital―is coming up in Raipur in Chhattisgarh. We feel that central India is an under-served market and Raipur as a town can cater to surrounding regions.
We will continue to look at brownfield opportunities, too. In north India, we have three hospitals―one each in Delhi, Gurugram and Ghaziabad. We are looking at acquiring two more facilities in Delhi, as we would require 250- to 300-bed hospitals in the National Capital Region. We would focus on brownfield opportunities in the region, as greenfield ones take longer to complete. Hyderabad is another city that we are very keen on, along with Visakhapatnam, for brownfield growth.
Q/ What size of hospitals will you be looking at for brownfield expansion?
A/ Our understanding is that a 250- to 350-bed hospital is ideal. [It] would be able to cater to a population living around [a radius of] eight to 10 kilometres. I feel the time for 600 to 700-bed hospitals is not there anymore.
Eastern expansion: AMRI Hospitals in Kolkata. After the AMRI acquisition, Manipal Hospitals has four hospitals in Kolkata and one in Bhubaneswar | Salil Bera
Q/ What are the parameters you look for before you acquire a hospital?
A/ There are multiple parameters. Geography is one of the most important. The second key concern is the cultural fit of the hospital. When we acquire a brownfield hospital, it comes with a whole set of doctors and staff. A cultural fit with that team is very important [for] the integration of that asset. Cultural fit is in the way we look at the patient, and the way we treat them.
Broadly, there are three filters through which we look at different acquisitions―clinical excellence, patient centricity and ethical practices. By ethical practices, I mean that the hospital should be transparent in its processes and communication. It should be known for its ethics.
Q/ How has the AMRI acquisition helped you?
A/ AMRI was always a well-known, multi-specialty, tertiary-care hospital in Kolkata. It fitted very well with our thought process. The acquisition took 15 to 18 months, and we spent around Rs2,400 crore. We added around 1,200 doctors.
Eastern India is where we always wanted to be; we cannot be a national player without having a substantial presence in the east. Before AMRI, we only had a single hospital in Kolkata, which came to us through the acquisition of Columbia Asia Hospitals. It is only a 100-bed hospital. Though it gave us a foothold, it did not give us an opportunity to tap into the east fully.
Post the AMRI acquisition, we have four hospitals in Kolkata and one in Bhubaneswar. We have over 1,200 beds. We also have a 500-bed hospital in Gangtok.
With our presence in Kolkata firmly established, we are looking at tier-II cities in the region. We will pursue more hospitals in the region, including in the northeast. We believe that it is a region that is still very much under-penetrated. Even now, many people travel from Kolkata to our hospitals in Delhi and Bengaluru.
Q/ What about expansion in other parts of the country?
A/ We are already present in the western region. We have two hospitals in Pune, including one in Baner. It is doing very well. We would like to have one more hospital in Pune. Mumbai is also of keen interest to us, but building a greenfield hospital there is very difficult.
Our hospital in Goa is the largest private hospital in the state, and the only complete oncology centre in the state. We also do transplants there. In Rajasthan, we have a large hospital in Jaipur. The 350-bed hospital is doing very well. In the south, Kerala is a place we are very much interested in. Hyderabad and Visakhapatnam are two other places we are looking at. Our expansion in Pune is our immediate priority.
Q/ What is your hiring strategy?
A/ Every year, we add 80 to 100 doctors, in addition to filling vacancies and meeting requirements in new hospitals. The hiring of doctors every year creates a talent pipeline for the future. We believe investing in talent as we invest in technology. We also keep adding nurses, and their number is linked to the number of beds we operate. High quality nurses are in short supply these days, but we try to maintain a bench.
Q/ What are the challenges you face?
A/ The primary challenge is people. There is a constant need to get good doctors and talented managers. There are supply-side issues we need to keep addressing. Many global supply-side issues are now stabilising post Covid. Earlier, the supply of medical equipment for CT and MRI [scans] and cath labs was a concern. The supply is now stabilising.
Q/ Any new specialisations you are looking at?
A/ We have had all super specialties for many years. Currently we are adding transplants. We have added cancer and robotic treatment in several of our hospitals in the last one year. We procure robotic technologies. We have orthopaedic and spine robots.
Q/ You are collaborating with Fujifilm India.
A/ Last year, we entered into an agreement with Fujifilm India for storing sensitive medical documents and images. Under the longterm agreement, Fujifilm India will provide us a large-scale ‘picture archiving and communication system’. PACS eliminates the need for manually storing, retrieving and sending sensitive information. The next-generation system will also enable the storage of medical documents and images on secure off-site servers, while the PACS software will ensure that such sensitive medical data can be accessed via mobile devices and workstations from anywhere in the world. The deployment will cover our 23 hospitals and 45 tele-radiology facilities.
A Radiology Information System PACS has also been developed. It is now available for radiology and cardiology specialties, and is scalable to more clinical specialties. It currently covers three million studies a year. RIS PACS will provide our patients quick access to medical images from any of our hospitals, digital access to reports, and diagnosis from radiologists and cardiologists across the country.