Saturday, October 18, 2014

My Lessons on Entrepreneurship from Dr. Prathap Reddy, founder of Apollo Hospitals

When we talk about healthcare innovation in India, the names of pioneers like Aravind Eye Hospital, Shankara Nethralaya and Narayana Hrudayalaya usually spring to mind. I guess its natural in a poor country like ours that our first thoughts go to organizations that have been successful in bringing high quality, low-cost care to the poor. But, if we take a more holistic view, others have made a significant contribution to making healthcare what it is today, even if there are several challenges still remaining.

After all, if we rewind about 30 years, all we had in tertiary care was a string of government-run hospitals which were poorly run but sustained by a group of outstanding individuals working heroically in tough conditions; a few outstanding charitable and missionary hospitals (institutions like CMCH Vellore); and some private nursing homes and small hospitals largely run by individual doctors. To come from that situation to one where India is seen today as a growing hub of medical “tourism” obviously involved entrepreneurship and innovation of a high order.

Dr. Prathap Reddy and Apollo Hospitals

The fact that the Indian health landscape would have been much worse without the contribution of high-end “corporate” healthcare was brought home to me when IIM Indore was honoured by a visit by Dr. Prathap Reddy, founder and Chairman of the Apollo Hospitals group recently.

My teens in Chennai (or Madras as it was then called) coincided with the time that the first Apollo hospital was being built, and I can recall that the creation of a “5 star” hospital was met with suspicion and sometimes even downright hostility. That’s not surprising when you remember that socialistic fervour in India (represented by the nationalisation of banks) peaked just a decade earlier.

Dr. Reddy had to face major policy and regulatory challenges when he started the Apollo Hospital project. Hospitals were not considered “industrial” activity at that time, and therefore it was next to impossible to raise money from either banks and financial institutions or the capital markets. Changes to these regulations needed intervention from the highest decision-making levels in the country, and took time.

From a single, struggling corporate hospital to the diversified global healthcare player of today, Apollo has come a long way. Like some other notable companies such as Infosys in the software industry or HDFC in the housing mortgage industry, Apollo was the right company at the right place at the right time – economic deregulation and integration with global markets in the 1990s provided a supportive environment for these companies that had already established the soundness of their basic delivery capabilities to take wing and fly.

The Healer

Dr. Reddy presented us with a copy of his recent corporate biography, Healer, written by Pranay Gupte. While I was daunted by the size of the book (500+ pages), I was intrigued enough after hearing Dr. Reddy speak to our students and faculty to plough through the book. I was hoping to find more detailed answers to some of the questions that my students had posed to him such as: Why did you start Apollo?  How did you overcome all the obstacles that came in the way? Is Apollo relevant in a poor country like India?

Some things come out clearly from the book. Dr. Reddy was born in a prosperous agricultural family. It was not clear that he would become a doctor when he was young, and in fact the reason he chose to shift to medicine, i.e., from Madras Christian College to Stanley Medical College (SMC) is not clear from the book. Of course, it’s an interesting reflection on the times that he was able to get into a top medical school apparently without much difficulty. The book suggests that, at SMC, his contributions were more organizational than academic – he conceived and held the first medical exhibition and open house at the hospital, and that was a roaring success. But he must have done adequately well in academics to move to the UK and then to the US to specialise and practise.

I earlier had the impression that Dr. Reddy had spent a considerable time abroad, but he was there for only 6 – 7 years. He returned to India when his father suggested in a letter that he should contribute to his community and country, and first worked in a small private hospital in Chennai. The trigger for setting up Apollo was the death of a 38-year old man who couldn’t afford to go to the US for an open heart surgery that was not being performed in India at that time.

Why was Dr. Reddy successful?

From an entrepreneurial standpoint, there were several factors that have helped Dr. Reddy been successful. Determination, patience and perseverance don’t even need to be mentioned I suppose – no entrepreneur trying to do something big in India can succeed without these. I would put the art of “how to win friends and influence people” at the top of the list. Whether it was the ability to attract talented Indian doctors who had emigrated to the west to return to India, or to influence politicians and bureaucrats to make important policy changes, Dr. Reddy’s passionate vision for better healthcare in India, his polite bearing, his concern for individuals and willingness to treat the world as his family all played an important role in Apollo becoming what it is today.

Dr. Reddy is a good judge of people. He is able to assess people quickly, make an offer to a potential employee after a brief interaction, and then give him or her the support and assurance to allow development of a new specialisation or department. I noticed from the book that he was quite quick to approve purchase of the latest technologies, something that most doctors like. At the same time, he didn’t compromise on quality and safety – on the contrary, an Apollo hospital was the first Indian hospital to get the prestigious JCI certification, considered to be the gold standard of healthcare.

I was very impressed after meeting and hearing Dr. Prathap Reddy. He is 80+, but his enthusiasm and interest would do credit to a much younger man. He is polite to a fault, whether it be with professors or students. He answered all our students’ questions patiently, and in detail. He is as fired up by the health challenges of today as he was when he started Apollo over 30 years ago. Certainly, he is an inspiring figure and role model for all of us.

Apollo’s Relevance to India

Is Apollo relevant to India? Dr. Reddy’s vision is to provide world class healthcare at prices affordable in India. Looking at the range of advanced treatments that Apollo has pioneered in India ranging from open heart surgeries to transplants, and the scale on which Apollo does them (in many areas, Apollo, as a group, does the largest number of procedures in the world with success rates comparable to the best), India would have been much worse off without Apollo. More importantly, Apollo (and Dr. Reddy) have been the catalyst for the rest of the high quality tertiary healthcare sector. Though Apollo’s contributions have been predominantly in curative care, the group has contributed to preventive healthcare as well through master check-ups and, in recent years, campaigns for healthy hearts and lower sugar consumption.

While Apollo itself offers a certain number of surgeries and treatments at subsidised prices to the poor, people who couldn’t have afforded Apollo’s services earlier now have access to their services thanks to the insurance schemes started by some state governments.

In his talk at IIM Indore, Dr. Reddy emphasised that Apollo does make all efforts to keep costs down. He specifically mentioned five ways: (1) reduce the length of a patient’s stay in the hospital, particularly after surgery [overall stay reduced from 7 days to 5 days]; (2) reduce morbidity by enforcing tight standards on infection control (infections elongate stay and increase costs); (3) use new techniques like “beating heart surgery” to reduce time in hospital; (4) reduce antibiotics dosages; and (5) improve surgical and treatment outcomes.


Dr. Reddy and his team at Apollo must be congratulated for what they have achieved in India. When Dr. Reddy started out, few held out any hope that he would be able to offer the best healthcare in India. He has conclusively proven those nay-sayers wrong, and in the process created a platform for high quality healthcare in India. While it’s admittedly not targeted at the “bottom-of-the-pyramid,” that shouldn’t detract from his significant achievement.

[The views expressed here are the personal views of the author. I thank Rashmi Shukla and Omkar Palsule Desai for their notes from Dr. Reddy’s talk at IIM Indore.]

1 comment:

  1. it is indeed an interesting and holistic insight into the execution and success of such a noble and innovative vision...