Bengaluru: Manipal Hospitals, which made two significant acquisitions last yearof Columbia Asia and Vikram to become the secondlargest hospital chain in India, is eager to do more.
MD & CEO Dilip Jose told TOI that in NCR, where it has three hospitals, it is keen on two more. It is eager to enter Kerala too. The Columbia acquisition gave Manipal a small 100-bed unit in Kolkata, but Jose said the East is an underserved market, and they want a bigger presence there. “We are also very keen on Hyderabad,” he said. The chain currently has nearly 8,000 beds across 28 hospitals, the largest network after Apollo. That’s still a small fraction of the 12 lakh beds in private hospitals in India. The country’s healthcare, Jose said, is highly fragmented, with many 50-100 bedded nursing homes. So there’s plenty of headroom for Manipal’s growth , he says.
The preferred route to expand, he said, would be acquisitions, because greenfield hospital takes time. “Finding the right piece of land itself a struggle in many of these places. And getting a hospital up and running is three years from the time you get the land,” he said. But in Dwarka in NCR, Manipal is looking at a greenfield opportunity.
Manipal Hospitals, part of billionaire Ranjan Pai’s Manipal Group, acquired Columbia Asia for over Rs 2,000 crore, which added 11 hospitals and 1,300 beds across Bengaluru, Mysuru, Kolkata, Gurugram, Ghaziabad, Patiala and Pune. Last year, it also acquired Bengaluru-based Vikram Hospital from Multiples Private Equity Fund in a deal valued at Rs 360 crore.
Manipal now dominates the organised healthcare market in Bengaluru with 10 hospitals. Wouldn’t this increase Manipal’s pricing power, and make healthcare more prohibitive? “I know it can be a worry, but we have not raised the rates in the last three years. We would want to grow through an increase in footfalls and an increase in patient numbers and procedures. That’s a more sustainable route. Increasing prices is a very shortterm, easy lever, but catering to more people, and going to more geographies is the most sustainable framework,” he said.
A larger network, Jose said, also brings a lot of advantages. Manipal, he said, is now able to invest in more technology and talent.
“Up to tertiary care, a lot of the things can be done by individual hospitals, whet-| her it’s cardiac surgery, or But knee replacements. when you want to invest in larger technology, costly technology, and also niche areas of therapies, like organ transplant, advanced cancer care, and bone marrow transplant, that is when we can consolidate across the network. We don’t have to invest in each of the hospitals. These high-cost items could be in one or two locations, and we can get patients to move there, and treat them. It is beneficial for the patient because they don’t have to travel out to another location,” he said.
On the cost side too, he said, hospital chains get advantages with larger scale. “When we negotiate with suppliers of either capital items or consumables, we are negotiating for a larger size. So that benefit is something that we will get. We’ve been able to bring down the cost of consumables at the erstwhile Columbia by 3-4%. Even attracting talent is easier because clinicians like the idea of being able to practice in multiple geographies,” he said.