Apollo Hospital : The one stop healthcare service

[suru27]

[quote=“shreys, post:4, topic:17964, full:true”]

In my limited understanding, hospitals can be categorised in 3 groups:

1. Hospitals for minor issues
2. Hospitals for major, complex issues
3. Hospitals for all issues other than the aforementioned.

For minor issues
For minor issues, the choice of hospital doesn’t matter. It doesn’t require much contemplation. In such cases, hospital that’s perceived to be good will be most frequented.
In the present circumstances, the decision for hospital admission for minor issues often takes into consideration the expenses that might be incurred. As health insurance coverage increases patients would prefer a better experience at a name brand hospital than a mediocre local medical centre.
And, as time elapses, the beneficiary of this trend could be the leading hospitals.

For complex issues
Now, in complex issues, family members are often stressed. For complex issues, in my anecdotal survey, I’ve seen family members prefer a superspeciality hospital. In the absence of such specialised institutes, multispeciality hospitals are the next obvious choice. In such cases, for outpatient consultation or for surgeries, decision making is based almost entirely on the doctor’s reputation.
This provides tremendous bargaining power to leading doctors. And, there’s no dearth of top dollar for top talent. More often than not, for complex issues, hospital reputation takes a backseat. And, doctor’s reputation takes the front seat. Hence, its crucial that the company possess talent retention strategies because their revenue is highly employee contingent.

For ailments in complexity between minor and major
In such cases, it’s a blend of hospital reputation and doctor reputation.

I think this is the reason why they have come up with Apollo craddle, sugar, clinic etc. various kinds of business which has a different offering from Apollo hospital. I have written much on these due to 2 reasons:

1. If you break revenues of hospital sector, outpatient revenue stream is far lesser compared to inpatient revenue stream
2. Even though company has diversified into these businesses, it is too nascent for me to make any judgement and would better like to evolve in learning when I can comprehend the numbers rather than making any wrong analysis.

To me it seems that it’ll be difficult to profitably grow for hospitals offering a plethora of disciplines.

I do not see any major issue in demand side if service positioning from target segment, quality and pricing point matches. I see issue in supply side from both soft and hard supply side infra

As time elapses, costs will obviously go up. And, the inability of hospitals to transfer costs to patients could lead to margin compression. Populist governments have absolutely no qualms in intervening to regulate cost of treatment.

Would be glad buddy if you can substantiate by numbers. I am a person who live and trust only numbers and support or oppose based on interpretation. My understanding of both India and few more countries is Healthcare and Education always grow beyond inflation as no one wants to compromise on quality and it is necessity and quality supply is limited. This is changing fast with technology disruption and I read signs of the same happening in hospitals may be 5-10 years down the line (google on kind of research John Hopkins and similar medical university is doing in healthcare using SMAC and digital + Dr Devi shetty interview on how machine learning can reduce load of doctors + how Robotics is transforming the sector). So, more than demand, I would consider right supply model as risk and the impact of technological disruptions on the supply side model to meet the demand and this is something we need to closely watch

By the way this reminds that Apollo is taking cognizance of disruption in technology and they are few primary steps taken which at least highlights that they respect disruption and want to consider this as an opportunity. Few links to highlight the same:

https://tech.economictimes.indiatimes.com/news/technology/apollo-hospitals-adopts-ibm-watson-for-oncology-and-genomics/64275478

Apollo ties up with Google Health Card in India

I often think of hospitals being very similar to the hospitality business. They seem to be lucrative opportunities. But, somehow, over the long term, hospitality has proven to be cyclical.

From supply side , yes. From demand side , No. Remember hotel is a cyclic industry where in 2009, you had hotels ADRs per room going at Rs 9000 and the same in 2018 at Rs 4000-6000 now even though when the cycle has turned after 7-8 years and check the same in terms of ARPOB for hospitals (it is somewhere in high single digits above inflation).