Strategy Planning & Execution Apollo Hospitals Introduction Apollo Hospitals is one of the large hospital networks in Asia with 38 owned hospitals and 13 managed hospitals. It started as a 350 bed hospital in Chennai and today the hospital chain is operating with 7,207 owned beds and 2,008 managed beds. Most hospitals offer secondary and tertiary care. 8 hospitals are Joint Commission International (JCI) accredited and 14 hospitals are NABH accredited (See Exhibit 1). The company has also ventured in to insurance (Apollo Munich Health Insurance Company), pharmacy (Apollo Pharmacy), clinics (Apollo Clinics), and consultancy (Apollo Consultancy). Apollo hospital has collaborated with government to provide tele-medicine services. It has more than 160 centres of tele-medicine in Africa. Apollo Hospitals is the destination for 125 countries for medical value travel. It has successfully completed 375 liver transplants and 750 bone marrow transplants. Apollo has been first in many - first to install PET-MR suite in South Asia and first to bring 320 slice CT angio scan to India. It is equipped with largest and most sophisticated sleep laboratory in the world. It has introduced the most advanced Cyberknife Robotic Surgery System in Asia Pacific, the world’s first and only robotic radio surgery system designed to treat tumors with sub millimetre accuracy. A typical day at Apollo Hospitals include 11,395 out-patients, 1,500 admissions, and 800 major surgeries. Competitive Position The increase in the number of private players has increased the competition. There is shift in the bargaining power of suppliers that is from high to low. Due to the scale, the hospitals have high bargaining power in purchasing medicines and devices. Apollo hospitals have followed diversified business approach - offering a wide range of healthcare and wellness services under a single brand. It also collaborated with government to offer services in rural India. In terms of geographic presence and breadth of services Apollo is at the top (See Exhibit 2). Strategy Formulation Business Canvas Model STRATEGY PLANNING & EXECUTION 1
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Strategy Planning & Execution Apollo Hospitals
Introduction Apollo Hospitals is one of the large hospital networks in Asia with 38 owned hospitals and 13 managed hospitals. It started as a 350 bed hospital in Chennai and today the hospital chain is operating with 7,207 owned beds and 2,008 managed beds. Most hospitals offer secondary and tertiary care. 8 hospitals are Joint Commission International (JCI) accredited and 14 hospitals are NABH accredited (See Exhibit 1). The company has also ventured in to insurance (Apollo Munich Health Insurance Company), pharmacy (Apollo Pharmacy), clinics (Apollo Clinics), and consultancy (Apollo Consultancy). Apollo hospital has collaborated with government to provide tele-medicine services. It has more than 160 centres of tele-medicine in Africa. Apollo Hospitals is the destination for 125 countries for medical value travel. It has successfully completed 375 liver transplants and 750 bone marrow transplants. Apollo has been first in many - first to install PET-MR suite in South Asia and first to bring 320 slice CT angio scan to India. It is equipped with largest and most sophisticated sleep laboratory in the world. It has introduced the most advanced Cyberknife Robotic Surgery System in Asia Pacific, the world’s first and only robotic radio surgery system designed to treat tumors with sub millimetre accuracy. A typical day at Apollo Hospitals include 11,395 out-patients, 1,500 admissions, and 800 major surgeries.
Competitive Position The increase in the number of private players has increased the competition. There is shift in the bargaining power of suppliers that is from high to low. Due to the scale, the hospitals have high bargaining power in purchasing medicines and devices. Apollo hospitals have followed diversified business approach - offering a wide range of healthcare and wellness services under a single brand. It also collaborated with government to offer services in rural India. In terms of geographic presence and breadth of services Apollo is at the top (See Exhibit 2).
Strategy Formulation
Business Canvas Model
STRATEGY PLANNING & EXECUTION !1
The Business Model Canvas Key Partners • Insurance companies,
pharmacies, Third Party Administrators
• Pharmaceutical companies and medical devices companies
• Patients, medicines, devices
Key Activities • Customer relationship
management, using IT for better care
• Hub and spoke model • Value added activities
such as telemedicine, Edoc, lifeline
Value Proposition • Service excellence and
standalone clinic care • Comprehensive services • Centers of excellence in
transplantation
Customer Relationships • Apollo prism, Edoc, tele-
medicine, mobile healthcare
• Homecare • Human Sigma, Tender
Loving Care, guest relations
Customer Segments • Patients (mostly middle
income and high income groups)
Key Resources • Human resources • Infrastructure • IT
Channels • Digital – social, email • Phone • Direct
Cost Structure • Integrating and maintaining information • Green field projects • Human resources
Revenue Streams • Excellence of services • Services – consultation, diagnostics, and treatment • Insurance, out-of pocket • Cashless treatments
Date: 04/26/2016
Team or Company Name: Apollo Hospitals
Hypothesis Testing Hypothesis Should expand the tele medicine services to more ares in Africa?
Core Assumptions 1. Value test Due to the poor infrastructure and lack of adequate facilities (poor access to healthcare facilities), there is demand for healthcare services in Africa. There are only 2.3 doctors per 1,000 population, which is less than 1/10th of the number in Europe. The biggest gain is retired in primary healthcare (KPMG 2012). People living in bigger cities have high disposable income and seeking quality healthcare services (See Exhibit 3). Providing tele-medicine services creates value and serves as first point of contact for medical value travel.
2. Execution Test Apollo has more than 13 years of experience in providing tele-medicine services. Apollo Hospitals is one of the major players in providing tele-medicine services under PAN african network initiated by Govt. of India. In addition to providing healthcare services it has been providing tele-education and tele-monitoring services. Apollo is currently operating tele-medicine centres in Nigeria and Uganda.
3. Scale Test Since there are centres established in the African region through Govt collaboration, the services can be scaled not just in terms of number of centres but also in terms of range of services offered. Apollo is currently operating tele-medicine centres in Nigeria and Uganda (See Exhibit 4).
4. Defensibility The defensibility is low as competitors are also working in the same region. Healthcare Global (HCG) and Narayana Health (NH) are actively working in this region. NH has tarted tele-medicine services in 2001 and currently operating tele consultation services in 130 centres across the globe (Narayana Health 2016). It has 63 centres in Africa.
Thought Experiments Data is available on competitors activities in Africa region and the range of services offered by them (See Exhibit 5).
Next Steps Look for opportunities to collaborate with local clinics or practitioners, conduct CME conferences, and other activities to improve relationship with local players. Arrange for information counters at the existing centres to promote medical value travel.
STRATEGY PLANNING & EXECUTION !2
Strategy Implementation The 4A Model 1. Alignment The organisation is aligned both externally and internally. The vision of the organisation for the next phase of development is ‘Touch a Billion Lives’. Under the leadership of Dr. Prathap C. Reddy the organisation is aligning itself to achieve the vision. In 1999, Apollo Telemedicine Networking Foundation (ATNF) and Apollo Telehealth Services (ATHS), which is the largest and oldest multi-speciality telemedicine network in South Asia was started. Since then it has opened more than 200 telemedicine centres nationally and internationally. The organisation has invested in improving the healthcare IT and other infrastructure required for delivering tele-medicine services.
2. Ability With more than 13 years of experience in providing tele-medicine services the organisation has developed the required expertise. The Government support to deliver the services is an added ability. Apollo is known for excellence of services backed by high quality doctors. The organisation has expert doctors and other IT staff required for delivering the tele-medicine services.
3. Architecture The required infrastructure to deliver the services is in place. The human resources, IT systems, and expertise. The organisation has invested in developing the IT system and introduced Electronic Medical Records (EMR) for tele-medicine services as well to maintain the continuum of care. The information kiosks, mobile units, and other required equipment are in place. It has pioneered in proof of concept validation studies in mHealth using 3G
4. Agility The organisation has responded to the changes and took steps accordingly. After its inception in 1999, Apollo has responded to the market needs by staring world’s first V-SAT enabled village hospital, expanded the network covering the distance from 100 miles to 450 miles and then expanded overseas. Recognising the opportunity in Africa, Apollo has collaborated with Government of India to deliver the services in Africa. It has also expanded the range of services with the increase in the demand (See Exhibit 6).
Conclusion Looking at the business canvas model, it is evident that Apollo has the key resources, channels, and key partners to expand the tele-medicine services in Africa. The strategic analysis suggests that expansion of services will deliver the value and contributes to reaching the vision. However, defensibility is going to be low. The organisation is aligned both internally and externally. It has the required ability and architecture. If differentiation is created in the service deliver and the type of services the strategy may work.
STRATEGY PLANNING & EXECUTION !3
Exhibit 1: Introduction to the Company
STRATEGY PLANNING & EXECUTION !4
Source: Company Overview, Apollo Hospitals. Retrieved from https://www.apollohospitals.com/corporate/company-overview
Bibliography Apollo Hospitals Enterprise Limited (2015) "Apollo Investor Presentation 2015."
Apollo Hospitals Enterprise Limited. (2016). "Apollo Tele Health." Retrieved 26th April, 2016, from http://www.apollotelehealth.com:9013/index.jsp.
Apollo Hospitals Enterprise Limited. (2016). "Company Overview." Retrieved 26th April, 2016, from https://www.apollohospitals.com/corporate/company-overview.
Apollo Hospitals Enterprise Limited (2016) "Investor Relations." Financials.
Indian Brand Equity Foundation (2016) "Healthcare Industry Sectoral Report." Sectoral Report.
KPMG (2012) "The State of Healthcare in Africa."
Narayana Health. (2016). "Telemedicine." Retrieved 26th April, 2016, from http://www.narayanahealth.org/telemedicine.
