Apollo’s Healthcare Architect

IN THE EARLY ’70S, a letter from his father prompted Dr Prathap Chandra Reddy to leave his nine-year-old cardiology practice in the U.S. and move back to Madras (Chennai). His father wanted him to do something that would benefit the people of India, rather than just make his parents happy. Considering his four daughters were then between 7-12 years, moving back to India was not a difficult decision for Dr Reddy.

What struck him when he returned was the lack of critical healthcare infrastructure in the country. Dr Reddy recommended many patients to go to the U.S. for surgery. The turning point came when he lost a 38-year-old man with two young children in 1979 because he could not raise $50,000 for the operation, prompting Dr Reddy to build an Indian hospital chain. Till then, large hospitals in India were mostly run by the government.

It was not going to be easy, though. A hospital needed land, funding and state-of-the-art technology. Land was not available due to restrictions under the Land Ceiling Act. “What was needed was support. The support mechanism is the technology to back it up and the systems. To put systems is fine, but to bring technology we were not allowed loans. I couldn’t get funding, because, although a hotel gets funding from the bank, hospitals were then not eligible for funding,” says Dr Reddy. To top it all, customs duty on health equipment was 300%, which made it a luxury item.

It was finally Pranab Mukherjee, the then finance minister, who helped clear funding for hospitals. “He gave an order, saying, six banks will fund you ₹5 crore each. That’s how the first hospital happened,” says Dr Reddy. In September 1983, then president Giani Zail Singh inaugurated the first-ever Apollo hospital in Madras’ Greams Road, named after Apollo, the Greek god of healing. To achieve this, Reddy made almost 60 trips to Delhi!

Forty one years later, Apollo has grown into India’s largest healthcare chain with 73 hospitals (45 owned, six managed and 22 day surgery and cradle centres), 10,134 beds and over 10,000 doctors. There are 215 corporate hospitals with 39,505 beds.

In the last five years, Apollo Hospitals has seen total income almost double from ₹9,617 crore in FY19 to ₹19,059 crore in FY24. During the period, profit after tax more than trebled from ₹236 crore to ₹899 crore.

One of the biggest achievements of Apollo Hospitals has been the opening of the Apollo Proton Cancer Centre in Chennai in 2019 at an investment of ₹1,300 crore. Even today, the only other similar facility in the region is Mumbai’s Tata Memorial Centre. “When we brought the first proton for Chennai, the U.K. did not have one. Even now they do not have one. All of Southeast Asia, including Singapore, South Korea... no one had. Australia didn’t have one. Two-thirds of the world did not have proton,” says Dr Reddy. In proton therapy there is no entry or exit load from radiation.

Apollo Hospitals has three divisions — healthcare services, digital health, and pharmacy distribution and diagnostics and retail health. Healthcare services account for 52% of revenues followed by 6,030 outlets under digital health and pharmacies that account for 41% of revenues. The balance 7% is accounted for by diagnostics.

The hospital chain Reddy built is now run by his four daughters — Suneeta Reddy, MD; Sangita Reddy, JMD; Shobana Kamineni, promoter director and Preetha Reddy, executive vice chairperson. While the focus on cardiology and oncology stays, Apollo now has 36 algorithms in use in the AI space. At the core is the clinical intelligence engine, an AI-based online symptom checker, built to assist doctors with real-time clinical decisions in primary care.

Interestingly, Dr Reddy set up the first hospital when he was 50 years old. “I was not then, and even now I’m not an entrepreneur,” he says. What he did was select the right people to run the organisation. “It’s they who are driving it. But we have a good monitoring system, thanks to technology.”

A consequence of developing high quality hospitals has been the emergence of medical tourism in the country. Unlike in the U.K. and the U.S., where it takes a month to get a specialist, in India you can get an appointment on time. “If it’s necessary, you can get it right away. And your test can be done in no time. That is because abroad, there is a shortage of doctors, nurses, and technology,” says Dr Reddy.

Over the next 24-30 months, Apollo is expected to launch six-seven hospitals, including its second big hospital in Delhi. “All of this will help, and not only in India. We can show it to the rest of the world, so they will learn from us. They’ll use India for healthcare, like people used to go to the U.S. and the U.K,” says Dr Reddy.

While Apollo has expanded across India, it is yet to go global. Dr Reddy points out that there are a lot of requests. “But, I feel, there is so much to be done here. The big question while doing it abroad is to get skilled people. In India, where I have skilled people, I can develop more skilled people. But that’s lacking in many countries,” he says. “Whether it’s a doctor, nurse or a technologist, all of them believe if the world can do it, I can do it, too. That is the biggest achievement.”

“I’m happy India is doing it because we have a large population and a third of our population is in the 20s. If we train them, they will help cover the huge gap that exists in our healthcare force because we need more hospital beds. We need 100,000 hospital beds, 200,000 doctors, 300,000 nurses per year and 400,000 technologists and pharmacists in the country. All this will happen. But that means you are able to give a job opportunity,” says Dr Reddy.

Apollo is contributing in its own way to build that base. It has set up three medical colleges — in Hyderabad, Chennai and in the U.K. Apollo Hospitals is a case study in building a profitable business, which keeps up with technology and remains contemporary with what’s happening across the world.