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Vol. XXXII No. 21, February 16-28, 2023

Apollo Hospitals – Early struggles

-- Business Houses of the South by Sushila Ravindranath

The Apollo Group of hospitals makes it to the lists of the best hospitals not only in India, but globally as well. It is India’s first corporate hospital which was set up in 1983 in Chennai. When it was launched, many eyebrows were raised as the general opinion was that such a venture was not possible in the health care area in India. One man’s vision was going to change all the negative perceptions and prove that world class health care was possible in the country. Dr. ­Pratap C. Reddy who turns 90 recently, is that visionary.

Till Dr Reddy came up with his project, one was not allowed to go to the market to raise funds or go to banks and financial institutions to borrow to set up hospitals. The profit motive was a strict no no. There were government hospitals and hospitals set up by trusts. Mindsets were rigid and there was enormous resistance to healthcare as a business.

Dr. Reddy who had worked in the US for 10 years, knew that his country needed to move forward in healthcare. He told me then,“When I came back from the US to set up practise in India, there were no adequate services when people needed them. As a cardiologist I was forced to send people to the US for advanced care. We had everything going for us, but our systems and laws were muddled.”

Apollo Proton Cancer Centre in Chennai, the first proton therapy facility across South Asia, Southeast Asia and the Middle East. Picture courtesy: Wikipedia.

There were many, many road blocks. But the doctor had unbelievable tenacity. “I had no land, no funding for my dream. I had to make many pilgrimages to see Dr. Manmohan Singh, then the governor of RBI, and the then finance minister Pranab Mukerjee. I had to make 12 applications to 20 babus. I had to spend 2 days every week in Delhi. All this was to get permission to make the initial public offering.” Nobody believed Reddy when he said the money was going to be used to build a hospital. They thought he was going to put up a hotel.

Fortunately one man thought differently. That was Rajiv Gandhi. In spite of Gandhi’s support, it took the doctor three years to get the necessary permissions. He was very clear that Apollo was going to be a multi crore super speciality hospital in Chennai. It took four years for any action to begin.
That was because four years were spent collecting information about the cash flows in existing first class charitable trust hospitals and preparing a feasibility report. After going back and forth, the Indian Overseas Bank agreed to give a term loan for the hospital project.

There were hurdles at every stage. When Dr. Reddy had to import a CT scan costing Rs 1.5 crore, it took the Department of Electronics (which was not known for speedy decisions) forever to give the clearance. Although the then Finance Minister and later President R. Venkatraman was ready to release funds for the hospital, he could not do so because of obscure and out dated legal issues. “If it took a million bricks to build Apollo, I also faced a million problems,” says Dr. Reddy.

Indraprastha Apollo Hospital. Established in 1995, it is the third super specialty tertiary care hospital set by the Apollo Hospitals Group, jointly with the Government of Delhi. Picture courtesy: Wikipedia.

Amidst a lot of uncertainties Apollo Chennai, the first hospital in the group came up in 1983. By 1987, the hospital was able to show a profit. Mistakes were made and these led to good systems being developed. Apollo was introducing modern diagnostic equipment which was to come under quite a bit of criticism. Reddy was accused of pushing healthcare costs up. He had to explain that high tech equipment may be more expensive but it allows more effective and faster testing. Apollo acquired the first multi organ CT scan, the first MRI equipment, colour doppler, treadmill and so on.

In its first year Apollo had a success rate of 97 per cent in heart operations. The next year 700 surgeries were performed and the success rate was 97.7 per cent. It is the top ranked hospital group for heart surgery. There are many such achievements.

Corporate hospitals continue to come under criticism. Reality is that Doctor Reddy’ s vision fulfilled a felt need and these hospitals have grown exponentially. Apollo Hospitals Enterprise Limited today has 72 hospitals, 4,529 pharmacies, over 120 primary care clinics, more than 700 diagnostic clinics and more than 500 telemedicine units across the globe. Which is quite an achievement for a hospital set up with 200 beds.

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