BRANDED HEALTHCARE SERVICES IN INDIAA CASE OF APOLLO HOSPITALS
Each one of us likes to walk in the rain, enjoy the cold breeze with cups of ice cream and then fight the humidity by taking pleasure of the most wonderful creation by human beings- the Air conditioner. Pretty much like almost everyone else in this city I am not immune to the cough, cold and the respiratory track infections that that the damp and the cold brings. Though such trivial issues of health can be well looked after by our family physicians and the neighbourhood clinics, what about slightly serious health problems. The only solution left is to go to see a specialist at branded hospitals and with a course of antibiotics all will be fine. The healthcare landscape in India is painted by a few great names like Fortis Escorts, Max Hospitals and Apollo Hospitals. In our study we will provide insights to the healthcare services in India with special reference to Apollo Hospitals. ABOUT THE FOUNDER Dr Prathap C. Reddy is a Cardiologist and an entrepreneur who founded the first corporate chain of hospitals in India – the Apollo Hospitals Group. He revolutionized the healthcare scenario of India and inspired others to follow suit. Today, India has over 750 corporate hospitals all over the country.
Dr Reddy received his medical degree from the Stanley Medical College in Chennai and later trained as a Cardiologist in the UK and USA. He did his Fellowship from the Massachusetts General Hospital, Boston and went on to head several research programs at the Missouri State Chest Hospital, USA where he worked for several years before returning to India.
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The dream of making world-class medical facilities in India spurred him to setup the Apollo Hospitals in Chennai in 1983 at a time when private healthcare institutions were virtually unknown in our country. The new Hospital attracted the best medical talent, including eminent non-resident Indian doctors from hospitals in the US and UK to return to India: this was the first major reversal in the pattern of brain drain.
Starting from a 300-bedded Hospital in 1983, the Group has, over the past 28 years, continuously excelled and maintained leadership in medical innovation, world-class clinical services and cutting edge research. With a network of over 8,500 beds across 54 hospitals at culturally diverse locations in India and overseas, over 4000 top class clinicians and an employee strength of more than 65,000 professionals, the Apollo Hospitals Group is one of the largest hospital groups in the world, being consistently ranked amongst the best hospitals for advanced medical services. These hospitals have served over 19 million patients from 55 countries, with seven of them having the prestigious JCI accreditation.
Dr. Reddy has undertaken pioneering work in bringing about institutional changes in the private healthcare infrastructure by, inter alia, establishing Apollo Institutes for post graduate Medical and Nursing Education, Hospital Administration, Physiotherapy, Clinical Research and a large number of Paramedical Programs. With the setting up of the Apollo Telemedicine Networking Foundation, Health Super Hi-way, Apollo DKV Insurance Co. and the Apollo Reach Hospitals, the Apollo Group (primarily identified as a healthcare provider) is today a leading provider of healthcare solutions, inclusive of next generation healthcare IT solutions and services. These have helped establish a modern healthcare network through both in house and outreach services, reaching out to millions of people.
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Dr Reddy was awarded the Padma Bhushan in 1991 for his contribution to the emergence of the private healthcare sector and his role in bringing about several regulatory changes relating to licensing, import restrictions, organ transplantation, etc. He received a number of esteemed awards and recognitions such as Mother St Teresa’s ‘Citizen of the Year Award’, recognition in a Harvard School publication for pioneering efforts in healthcare, ‘Life Time Achievement Award’ by Hospimedica International, the ‘Asia Pacific Bio Business Leadership Award’ by the University of Southern California, Modern Medicare Excellence Award by the ICICI Group for outstanding achievements in the healthcare industry and several others.
As Chairman of the CII National Healthcare Committee since 2006, Dr. Reddy constituted sub-committees for drawing up standards for accreditation of Indian Hospitals for the first time in the country; did some commendable work in the areas of medical value travel and medical code of ethics. One of the areas of impact has been the area of budget recommendations to the Government and health insurance.
In November 2009, The Government of India honoured the pioneering spirit of the Apollo Hospitals Group with the release of a postage stamp.
Dr. Prathap C. Reddy was conferred with second highest civilian award, the “Padma Vibhushan” in March 2010. This unequalled commendation from the Government of India is an acknowledgement of his untiring pursuit for excellence in healthcare as Apollo strives towards touching a billion lives.
Under Dr. Reddy’s leadership, the Apollo Group has undertaken philanthropic work through
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‘Save a Child’s Heart Foundation’ (SACH), the CURE Foundation for cancer care, the Indian Head Injury Foundation (IHIF), ‘Distance Healthcare Advancement’ (DISHA), and many others that have touched the lives of several hundred thousand children, differently-abled people, cancer and brain trauma patients. THE APOLLO GROUP It is often said that nothing happens, unless there is a dream first. At the genesis of the Apollo story there was a dream. A dream so powerful, that it helped transform the medical landscape in India. Apollo's vision for the next phase of development is to 'Touch a Billion Lives'.
"Our mission is to bring healthcare of International standards within the reach of every individual. We are committed to the achievement and maintenance of excellence in education, research and healthcare for the benefit of humanity"
Today, with over 8500 beds across 54 hospitals, and a significant presence at every touchpoint of the medical value chain, Apollo Hospitals is one of Asia’s largest healthcare groups. Commenced as a 150 bed hospital, today the group has grown exponentially both in India and overseas. Its growth is often said to be synonymous with India emerging as a major hub in global healthcare. Apollo Hospitals is driven by a single thrust, to provide the best standards of patient care. It is this passion that has lead to the development of unique centers of excellence across medical
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disciplines, within the Apollo Hospitals network. Apollo Hospitals has JCI accreditations for 7 of its hospitals, the largest by any hospital group in the region.
True to its founding principles, the group has made quality healthcare accessible to the people of India, and even overseas. It has become an institution of trust, and a beacon of hope to so many searching for a cure for their ailments. The legacy of touching and enriching lives stems from the pillars of the Apollo philosophy - experience, excellence, expertise and research.
The Apollo Hospitals Group is the pioneer of integrated healthcare delivery in India. This vision led the group to earmark time and resources to strengthen each vital cog in the process of healthcare delivery. As a result of these efforts, the group today is in a unique position to exponentially increase its healthcare cover. This will be critical in order to meet future requirements.
Apollo Hospitals Group, today, is an integrated healthcare organization with owned and managed hospitals, diagnostic clinics, dispensing pharmacies and consultancy services. In addition, the group’s service offerings include healthcare at the patient’s doorstep, clinical & diagnostic services, medical business process outsourcing, third party administration services and health insurance. To enhance performance and service to customers, the company also makes available the services to support business, telemedicine services, education, training programs & research services and a host of other non-profit projects.
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APOLLO’S MILESTONES MEDICAL :
Pioneered open heart surgeries and cardiac catheterization, in the early 80’s. Pioneers of the Preventive health check programmes in India and performed 3 million checks to date.
Introduced cutting edge procedures like off-pump and beating-heart surgery, either by thoracotomy (minimal invasive access) or classical sternotomy, trans-radial angioplasty and stenting, mitral valve replacement.
By 1992, Apollo Hospitals introduced Artery Stenting for the first time in India. Conducted over 90,000 cardiac surgeries - one of only 10 hospitals in the world to achieve these volumes. Achieved a 99.6% success rate in cardiac bypass surgeries, over 91% of which were beating heart surgeries.
Largest series of aortic valve replacement with stentless heart valve bioprosthesis performed.
Performed over 7,50,000 major surgeries and over 10,00,000 minor surgical procedures with exceptional clinical outcomes.
First private healthcare provider to perform a heart transplant in 1995. In 1995, Apollo Hospitals performed its first Bone Marrow Transplantation, as well as the first multi organ transplant in the country.
Apollo performed an unprecedented revolution in orthopedics by equalizing limbs and deformity correction by the llizarov procedure.
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• • • • • •
Pediatric liver transplant in India Adult liver transplant in India Cadaver liver transplant in India Transplant in acute liver failure in India Liver-kidney transplant in India were all performed by Apollo Hospitals. Apollo Hospitals was the first Indian hospital group to introduce Stereotactic Radiotherapy and Radiosurgery for cancer treatment.
Pioneered orthopedic procedures like hip and knee replacements, the Illizarov procedure and the Birmingham hip re-surfacing technique.
Revolutionary Ceramic Coated Knee Replacement was performed for the 1st time in South India at Apollo Speciality Hospital, Chennai.
Resorbable screws were used for the first time in India at Apollo Hospitals Chennai to correct congenital spine problem of a six-year-old child from Tanzania.
An innovative Orthopedic procedure was performed for the first time in India at Apollo Hospitals Chennai - leading to pain free postoperative recovery after shoulder surgery. The Orthopaedic team at Apollo Hospital, Chennai successfully performed an Arthroscopic Brachial Plexus Catheterization on a young lady patient.
The Paediatric Cardiac team at the new Apollo Children’s Hospital successfully performed a complicated surgery to treat a complete AV canal defect in a 4–month old Nigerian baby in 2009.
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India's first keyhole multiple bypass surgery was conducted at the Indraprastha Apollo Hospital, Delhi. It took less than four hours to perform the scarless surgery, without cutting any bone of the patient. This technique uses a combination of small holes in the chest and a small incision, made indirectly over the coronary artery to be bypassed. It is often performed using robotics and video-imaging, which help the surgeon operate in a small area.
An 8 year old Omani child with aortoarteritis and uncontrollable hypertension with impending kidney failure and intestinal gangrene was successfully managed by a simultaneous vascular reconstructive surgery on the narrowed arteries supplying both the kidneys and the intestines at Apollo hospitals chennai .Such simultaneous bypass and reconstruction in a young child was a first for India and only a few such procedures had been done worldwide.
First to install the most modern diagnostic and surgical infrastructure like the 320Slice CT Scan and many others.
First hospital group to bring the 320 Slice CT- Angio scan system and the 64 Slice CT-Angio scan system to India.
• • •
First hospital group in South-East Asia to introduce the 16 Slice PET-CT Scan. Equipped with the largest and most sophisticated sleep laboratory in the world. Introduced the most advanced CyberKnife® Robotic Radio Surgery System in Asia Pacific, the world’s first and only robotic radiosurgery system designed to treat tumors anywhere in the body with sub-millimeter accuracy.
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Novalis Tx™ Radiotherapy & Radiosurgery , one of the most precise, non-invasive and fastest treatments available for cancerous and non-cancerous conditions of the entire body was launched at Apollo Cancer Institute Hyderabad in 2009. Treatments are delivered from outside the body to destroy tumors without an incision. This protects the patient’s healthy tissue, so patients can avoid hospitalization, lengthy recovery periods and many of the complications often associated with conventional surgery.
Quality & Accreditations 1. Joint Commission International Accreditation The Apollo hospitals group achieved the unique distinction of achieving accreditation for its hospitals at Delhi, Chennai, Hyderabad, Ludhiana, Bangalore, Kolkata and Dhaka. Indraprastha Apollo Hospitals, Delhi, became the first hospital in India, while Apollo Hospitals, Chennai, became the first hospital in South India to achieve this unique and coveted accreditation. Apollo Hospitals Bangalore, Indraprastha Apollo Hospitals Delhi and Apollo Dhaka were re-accredited in August 2011. JCI works directly with healthcare organisations to achieve their goals of providing quality clinical care and services in safe, efficient and well-managed facilities. JCI assesses through a rigorous on site survey process, a healthcare provider’s quality in the following key areas • •
Access to health care Health Assessment and care processes
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• • • • • • • •
Education and rights of individuals Management of information and human resources Safety of facility Infection control Collaborative integrated management Facility management Performance Measurement Education & Rights of Patients
2. NABH accreditation National Accreditation Board for Hospitals & Healthcare Providers (NABH) is a constituent board of Quality Council of India, set up to establish and operate accreditation programmes for healthcare organizations. The board is structured to cater to much desired needs of the consumers and to set benchmarks for progress of health industry. Apollo Speciality Hospitals, Madurai and Apollo Speciality Hospitals Chennai were accredited by the NABH. 3. NABL Accreditation Apollo Hospitals, Chennai WAS assessed & accredited in accordance with the Standard ISO 15189 : 2003 "Medical Laboratories - particular requirements for Quality & Competence" for its facilities in the field of Medical Testing. 4. ISO 9002 Apollo Hospitals, Chennai was the first hospital in India to be awarded an ISO 9002 certification.
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The ISO 9000 series is concerned with 'quality management'. It is a certification affirming the organization's ability to enhance customer satisfaction by meeting customer and applicable regulatory requirements and continually to improve its performance in this regard. The ISO standards are a guarantee of quality across boundaries and geographies. They are an assurance to the international patient of the safety and reliability of Apollo's services against global benchmarks. 5. Superbrand The Indian Consumer Superbrands Council includes some of the most eminent marketing, media and advertising professionals. As the council members agree, "Obtaining Superbrands' status puts the brand in the circle of an elite group that is seen to represent the best practices in brand management. Ultimately it can be likened to a brand Oscar. Apollo Hospitals entered the 'Superbrand' category in 2004. Awards & Achievements Excellence, literally meaning unparalleled superiority, is the quintessence of Apollo Hospitals, India. This is reflected in many areas - be it infrastructure, technology or services or in the calibre and brilliance of their medical fraternity. Presented below are some of the achievements of Apollo Group of Hospitals: 1. In Jan 2010, Chairman Dr. Prathap C Reddy was conferred with the Padma Vibhushan award by the Government of India, for excellence and exceptional service in the Healthcare industry in the country. Dr. Prathap C Reddy, was also awarded the Padma Bhushan in 1991.
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2. Dr. Prathap C Reddy awarded with the prestigious Alexandria - Frost & Sullivan 2010 - Lifetime Achievement Award in Healthcare Sector and Apollo Pharmacy presented with the Healthcare Retail Company of the Year Award ! 3. Billion Hearts Beating (BHB) Campaign is a proud winner in the Corporate Social Responsibility practice category, at the 5th Indy's Awards 2011. 4. Apollo Hospitals Group won many laurels in the Best Hospitals in India - Survey 2010 by "The Week" Magazine !
Apollo Hospitals, Chennai, has been ranked as the Overall Best Private Sector Hospital in India.
Indraprastha Apollo Hospitals, Delhi has been ranked the Second Best Private Sector Hospital in India.
Apollo Hospitals at Hyderabad, Chennai and Ahmedabad ranked as the Best Multi-Speciality Hospitals at the respective cities.
Apollo hospitals at Kolkata and Delhi ranked by Best private Sector MultiSpeciality Hospitals at the respective cities.
5. Apollo Hospitals won the − "India's Most Preferred Hospital" − Viewer's Choice Award at the India Healthcare Awards announced by CNBC − TV18 and ICICI Lombard Health Insurance. 6. Billion Hearts Beating Campaign wins the "Best Marketing Campaign of the Year" Award at the World Brand Congress 2010.
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7. Ms. Preetha Reddy, Managing Director, was conferred the Doctorate of Science (Honoris Causa) by the Tamil Nadu Dr MGR Medical University, for her outstanding contribution to the field of healthcare in India in 2009. 8. The College of Emergency Medicine, London conferred the prestigious ‘Honorary Fellowship’ of the College on Dr K Hari Prasad, CEO, Apollo Health City, Hyderabad in 2009. 9. In 2006, Dr. Prathap C Reddy was awarded the ‘Modern Medicare Excellence Award 2006’, by ICICI Group, for his outstanding achievements in the healthcare industry. 10. Dr. Prathap C Reddy received the Asia-Pacific Bio-Business Leadership Award in 2005. 11. Dr. Prathap C Reddy received the Ernst & Young Entrepreneur of the Year Award in 2002. 12. Dr. Prathap C Reddy received the prestigious Sir Nilrattan Sirca Memorial Oration (JIMA) Award for single-handedly making super speciality care available to a vast section of society. 13. In 1991, Dr M.K. Mani, Chief Nephrologist Apollo Hospitals Chennai was awarded the Padma Bhushan 14. In 1998, Dr M.R. Girinath, Chief cardiovascular surgeon , Apollo Hospitals Chennai was awarded the Padma Bhushan.
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The Apollo Growth Story Since its inception, Apollo Hospitals has seen three decades. And each has brought with it, its own share of cherished memories. THE 1980s 1. Apollo Hospitals were inaugurated in 1983 by Shri Giani Zail Singh, the then President of India. The first Apollo Hospital was in Chennai. It was in 1984 that the hospital commenced its commercial operations. 2. Dr. Prathap C. Reddy, a believer that comprehensive health insurance is essential to optimize the medical equation. Apollo Hospitals, under his guidance in 1986 introduced a medical insurance scheme in collaboration with United India Insurance Company Limited. 3. The group showed great promise and blossomed quickly. Within three years of operation, they announced their first dividend and by 1988 expanded to Hyderabad. The 1990s 1. The 90’s witnessed a rapid rise in its operations and infrastructure. 2. In 1993, Apollo Hospitals launched the 24 hour ambulance service. 3. In 1994, a state of art cancer hospital- the Apollo Speciality Hospital in Chennai was inaugurated. 4. In 1996, the Apollo Indraprastha Hospital in New Delhi was inaugurated and the Apollo Nursing College was established.
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5. The late 90’s were marked by the inauguration of Apollo Hospitals in Madurai and the Apollo Heart and Kidney Hospital in Vishakhapatnam. 6. The story of Apollo Hospitals became a case study at teh prestigious Harvard University. 2000 to 2005 1. Apollo continued to grow as a healthcare powerhouse. Hospitals expanded to Ahmedabad, Bangalore, Bilaspur, Mysore, Kolkatta and Kakinada. 2. Apollo’s presence was extended in Sri Lanka, Dubai, Saudi Arabia and Ghana. 3. Apollo Aragonda, inaugurated in 2000 was the first telemedicine facility in the country. It was inaugurated by Bill Clinton. 4. Apollo also launched its nationwide single emergency number- 1066. 5. In 2002, Save A Child’s Heart initiative was launched. This initiative aimed at providing quality paediatric cardiac care to children from underprivileged sections of society. 2006 to 2008 1. Apollo Hospitals Group partnered with Munich Health, a world leader in the field of health insurance to launch Apollo Munich. 2. In 2008, Apollo Hospitals turned 25. 3. Apollo Reach Hospitals were launched with the aim to make world class healthcare accessible to people in remote areas. 2009 to Date
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1. Apollo Speciality cancer Hospital launched the Cyberknife robotic radio surgery system. 2. Apollo Hospitals, Bangalore were inaugurated by Her Excellency Shrimati Pratibha Patil on 1st February 2009. 3. The ‘Apollo Liver Clinic’ was launched at Apollo Hospitals, Chennai. 4. Novalis radio surgery system was launched at Apollo Health City, Hyderabad. 5. Apollo Bramwell Hospitals, a state-of-the-art multi speciality hospital in MokaMauritius was inaugurated as a Joint Venture with British American Investment Co. Limited. 6. The 50th hospital of the Apollo Hospital Group was launched at Secunderabad on 2nd April 2010. It is a 150 bed tertiary hospital. 7. Apollo Gleneagles Cancer Hospital, Eastern India’s first super speciality Cancer Hospital was inaugurated on 23rd march 2010. It is the first comprehensive cancer care hospital in Eastern India equipped with the latest radio therapy- Novalis Tx Unit.
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Apollo Hospitals Group – The Group has an integrated business model (‘Across the Healthcare Spectrum’)
Company Services Services offered by the company: 1. Cardiology & Cardiothoracic Surgery 2. Orthopedics & Joint Replacement Surgery 3. Spine Surgery 4. Oncology 5. Medical & Surgical Gastroenterology
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6. Neurology & Neurosurgery 7. Nephrology & Urology The Apollo Expertise
One of the most respected hospitals in the world, Apollo hospitals specializes in cutting-edge medical procedures. With the evident boom in Medical tourism, we have a lot of health tourists choosing us as their ultimate Health Tourism destination for medical services .They have pioneered many revolutionary procedures and technologies in India, and a whole lot of health tourists come to opting either for medical care or elective procedures. Some of the health procedures are• • • • • • • • • Cardiac Surgeries Total Knee /Hip Surgery Replacements Birmingham Hip Resurfacing Procedure Liver, Multi-Organ, and Cord Blood Transplants Coronary Angioplasty Stereotactic Radiotherapy and Radio surgery Cosmetic Surgery Bariatric Surgery - laparoscopic Laparoscopic Hernia Repair
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Apollo Hospitals Group– Companies, besides Hospital
SWOT Analysis Of Apollo Strengths • Largest private sector healthcare Weaknesses • Falling
provider in India. • Consistent revenue growth across
business segments. Opportunities • Indian healthcare market is expected to quadruple to $150bn by 2017 from
Threats • Medical equipments accounts for 40-45% of the total expenditure in
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the current size of $35bn. Apollo well positioned to capitalize on this growth opportunity. • Medical tourism market expected to reach $40bn by 2010. Apollo, which is already into it, is well placed to grab the maximum share. •
technology will make existing medical equipments obsolete. Attrition rate in the healthcare sector is expected to increase with the surge in demand for medical professionals
FINANCIALS OF APOLLO Market Cap (Rs Cr.):6,795 EPS - TTM (Rs):14.74 P/E Ratio (x):35.04 Face Value (Rs):5.00 Latest Div. (%):75.00 Div. Yield (%):0.72 Book Value / sh. (Rs) :129.93 P/B Ratio (x):3.98
Balance Sheet of Apollo Hospitals Enterprises
------------------- in Rs. Cr. -------------------
Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets
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Apollo had a number of competitors in the market for privately-provided tertiary care. For instance, the health care division of the Manipal Group, one of Asia’s largest hospital management groups, ran 11 private and 7 government-affiliated hospitals with more than 6,000 beds. Fortis Healthcare Ltd. managed super and multi-specialty hospitals in three locations in India and planned to grow from 600 beds in 4 hospitals to 4,000 beds in 10 hospitals over the next few years. Ranbaxy Labs, India’s largest pharmaceutical company, was a strategic investor in Fortis, holding a 17% stake in the company. Wockhardt Hospitals Ltd., the hospitals division of the eponymous pharmaceutical company, operated specialty hospitals in Mumbai, Bangalore and Kolkata. Wockhardt had formed an alliance with
Harvard Medical International to gain access to Harvard’s expertise in the field of surgical services. Wockhardt planned to set up at least five new super-speciality hospitals in the next three years. Many of Apollo’s competitors including Delhi-based Max Healthcare and Fortis worked on building integrated delivery networks ranging from primary to tertiary care services. Analysts expected India’s private tertiary care sector to grow at 15% CAGR in the next few years. The Infrastructure Development Finance Company (IDFC), a private-public venture set up by the government of India, saw three main drivers of future growth: The present shortage of premium medical facilities, the growing incidence of lifestyle diseases, and growing income levels, have all led to a large unfulfilled demand for high quality healthcare services, translating into a large potential opportunity. Today,
healthcare is being touted as the next big boom, and the sector is expected to grow rapidly over the next decade, to reach a level of Rs. 200,000 to 300,000 crore by 2012, largely spurred by an increased corporate presence in the sector.
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Although demand for tertiary care services was poised to grow, keeping hospitals profitable was not easy, mainly because in-patient care required considerable up-front investments. In the 1990s, many highly-leveraged hospitals found themselves unable to service their debt. As a result, hospital financing had all but dried up by 2002. The key to successful hospital management, analysts believed, was to keep up-front investments and operating costs in check. Apollo’s sound financial performance, these observers noted, was in good part due to the group’s ability to tightly control operating costs. Comparison with Competitors
Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)
Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses
Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs)
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Equity Dividend (%) Book Value (Rs) Strategic Opportunities
In thinking about Dr. Reddy’s challenge to come up with a new strategic vision for the Apollo group, three major decisions were likely to be on the family’s mind: opportunities arising from deeper vertical integration in the domestic market, the prospects of international hospital management, and the possibilities related to global medical tourism. Integrated Health Care Delivery Networks (IDN) A first strategic possibility was to focus Apollo on the development of the domestic market and build up a vertically integrated health care delivery network. First steps in this direction – the pharmacies and the primary care clinics – had already been taken. In reviewing these ventures, Apollo’s managers needed to decide if they fit well with Apollo’s core business. Were there significant strategic risks in developing an IDN? Should the group add additional services? For instance, some managers were excited about the prospects of developing insurance products to further stimulate the demand for health care services. International Hospital Management A second possibility was to aggressively acquire international hospital management contracts. An interesting question was if Apollo should consider foreign direct investments – a strategy the group had successfully pursued in Sri Lanka – or if it should concentrate on managing hospital assets without owning them. The geographic focus of Apollo’s activities was another strategic variable under consideration. Traditionally, Apollo had managed
hospitals in South Asia and the Middle East. More recently, it had developed some business
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in Africa. At the time of the case, however, the Consulting Division studied a hospital project in Romania, which had the potential to open up the Eastern European markets. Romania had 400 public hospitals with 160,000 beds, but not a single private facility. Most health care services were covered by the National Health Insurance Fund (CNAS), which was financed by contributions from companies and employees. The CNAS reimbursed hospitals based on the average diagnostic related group (DRG) of their patients. The DRG was a clinical classification system used in most of Europe and in the United States. Assisted by the IFC, the Romanian government sought to develop a public-private partnership (PPP) for the Fundeni hospital in Bucharest. Fundeni was a major tertiary care hospital with 1,118 beds and a staff of 1,500, including 289 doctors. The government offered a long-term concession to run Fundeni. While Romania would retain ownership of all assets, the private operator was responsible for operations and capital expenditures. The concession contract required the operator to take on all staff currently on Fundeni payroll. In the first year, no significant layoffs would be possible. The IFC advertised the Fundeni concession as “an excellent investment opportunity” because the hospital had a “top reputation as the premier tertiary hospital in Romania,” was “well-funded by CNAS” and “well positioned to serve the untapped private health market” in Romania. Dr. Reddy was optimistic about Fundeni: “I am now managing hospitals in Colombo, but I feel I should also be prepared to go to Central Europe and possibly the UK. Romania is not so far; going from India to America, it is about half distance.” Sangita Reddy, Director of Operations, felt similarly: I am very positive about this opportunity, we need to go there with a positive spirit. When we started the hospital in Hyderabad, everybody told us that it would be difficult because Hyderabad is very different. They said the same thing about the hospital in Delhi and the
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hospital in Sri Lanka. It is interesting that there is no global health care player. Every other business is more global, but health care is very localized. There is room for more globalization in health care. Medical Tourism A third strategic opportunity opens to Apollo was to help develop India as a destination for international medical tourism. Traditionally restricted to the elites of poor countries, global medical tourism was a relatively recent phenomenon. Significant quality and cost differences in hospital care, however, made international patient mobility ever more attractive. With more than one million medical patients per year, many of them undergoing plastic surgery, Thailand was the most successful destination. India, in contrast, was not yet on the map for medical tourists. In fact, even India’s general tourism numbers were abysmal. Despite its rich cultural heritage and the many interesting destinations it offered, India attracted less than 3 million foreign visitors a year. To compare, more than 90 million tourists visited China each year. Despite its weak competitive position today, many analysts seemed to be optimistic about the prospects of medical tourism in India. For instance, a study by the Confederation of Indian Industry (CII) and McKinsey estimated that medical tourism might bring India annual revenues of $1.1 to $2.2 billion by 2012. Apollo’s President, K. Padmanabhan, expected the group to capture up to 60% of this market. Apollo’s managers identified four international customer segments likely to come to India for medical treatment. First, they hoped that members of the 20-million strong Indian diaspora might combine a home visit with medical treatment. A second target were countries with rationed health care. To patients in the United Kingdom and Canada, Apollo hoped to provide relief from the famously long National Health Service (NHS) waiting times he
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legions of uninsured in the United States were a third target segment. At any one time, about 43 million Americans under the age of 65 had no health insurance. Some of these uninsured had turned to Indian hospitals in the past. For instance, a North Carolina carpenter replaced his heart valve at India’s Escorts Heart Institute & Research Centre for a total expense of $10,000, including round-trip airfare and a side trip to the Taj Mahal. In the United States, the surgery would have cost $200,000, with a required initial deposit of $50,000. The fourth segment were patients from regional markets in which top-quality hospitals and health professionals were hard to find. For residents of neighbouring Pakistan, Nepal, Bangladesh, Mauritius and the Maldives, or citizens of African and Middle Eastern countries India was a quality health care location. Although the target population for medical tourism was large, for the time being at least, Apollo’s patients were mostly domestic. Out of the 5,200 hospital beds run by Apollo in India, foreign patients usually occupied about 100 beds. Most of them came from the Middle East, Africa and countries of South Asia. Consumer attitudes did not appear to be the problem. In a recent survey in Europe, two thirds of respondents indicated they would be interested in going abroad for treatment if it was possible to use their national funding. And at least in the European Union, it appeared to get easier to travel abroad for treatment. In a landmark decision, the European Court of Justice forced the German Labour Office to pay for the spa treatment of one of its civil servants. The employee had decided to take his healing soak in a spa in Italy. Some private insurers had also started steering clients to countries with cheaper care. Dutch insurance giant OHRA BV, for example, sent many of its patients with knee problems to a center in Alicante, Spain. “We pay for airfare and all travel expenses. In spite of that; it’s still cheaper than caring for them here,” an OHRA spokesman said. US health insurer Blue Cross Blue Shield insured patients for treatment at the Wockhardt Hospital & Heart Institute in Bangalore, as did the British health insurer Bupa. In general,
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however, it was not easy to get coverage for treatment abroad. The NHS, for instance, reimbursed patients only if they received care at a facility that was within three hours of flight from Britain. To market its services to international patients, Apollo partnered with SITA Incoming, a division of Kuoni Travel (India). SITACARE, the SITA division dedicated to medical tourism, operated more than 200 offices in India and seven offices in the European Union. On its website (http://www.sitacare.com), patients were able to choose medical treatments and select hospitals with a few clicks of the mouse. For example, Coronary Artery By-pass Grafts (CABG), offered at $6,940, were available at seven different Apollo hospitals, including the facility in Colombo. The website also offered basic medical information and performance data for the Apollo hospitals. Prospective patients learned that the group had performed 49,000 heart surgeries with a 98.5% success rate. 80% of the bypass operations were done using the beating heart technique. Apollo and SITACARE co-financed marketing campaigns directed at medical tourists. “They have a strong handle on the tourism market. We participate in marketing blitzes with them. We also develop joint brochures and contact health care brokers,” explained Ashok Anathram, President of Business Development. In the United Kingdom, health care brokers assisted patients, typically referred by their general practitioner, with packages that included treatment, hotel and travel arrangements, functioning as de facto one-stop shops for medical tourism. SITACARE received a commission of about 10% to 15% for each patient, about 2% to 5% of which it paid out to referring doctors. Preetha Reddy, Apollo’s Managing Director, was optimistic about the prospects of developing medical tourism: “Our chairman kept saying that India could be a major health care destination but no one believed him. Now people have woken up. India has the
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potential to be a significant player. Our practices are on par with the best international hospitals and the general infrastructure is slowly getting better.” Seizing this opportunity, the family agreed, was not going to be easy. Suneeta Reddy noted: “Different pieces of the puzzle need to be in place to make medical tourism attractive. Right now, the broader infrastructure environment is lacking, and Thailand is ahead of the game. Another important issue is after-care. A part of our strategy could be to build a clinic in the UK. This clinic could provide the postoperative care that patients need.” A critical question for the Apollo managers was how competitive the market for medical tourism would be in the future. K. Padmanabhan was concerned about China: One of the big questions is how much medical tourism will go to India and how much will go to China. At this point, India has a much better private health care system than China. But the Chinese will spend as much on health care as Indians, and this will act as a catalyst for the development of private health care services. In terms of skills, we are way ahead of China, but ultimately, the competitive advantage comes from the number of patients doctors are seeing and from their skill sets. International competition was not the only concern related to a strategy that emphasized international patients. In an editorial on medical tourism, the Times of India remarked critically: While aspiring to become a world-class supplier of health care services, India cannot wish away its ailing masses who lie unattended for want of decent health care. The current health care situation in India is dismal. The number of hospital beds per 1,000 population, for example, is around one, which is well below the WHO prescribed norms, or even the low-income countries average of 1.5. The same shortage extends to the availability of medical and paramedical staff… Given all this, does it make sense to promote medical
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tourism? To be sure, the development of medical tourism will alter India's health care landscape. While it will give a boost to the private health care industry by catering to wealthy foreign and domestic consumers, it could adversely hit the low-income population. Medical personnel and infrastructure would be geared to serve the elite. Moreover, medical tourists will end up driving up health care costs.
Apollo’s success can be attributed to its organization around ‘Five Stars’ to give patients advanced medical care possible at high quality
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Apollo’s branding and demand generation initiatives focused on individuals, referring doctors and corporations General public and individuals-
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Awareness of high quality medical care and stress illness prevention Targeted mailings to promote Apollo clinics for various therapies such as diabetes, asthma, back pain, cancer and cardiology discounts to users
• • • •
Introductory attract first time Developing an internal system to respond to all consumer queries promptly Regular advertising in a variety of media to target urban consumers Screening programs for illness such as cancer and tuberculosis in rural areas
Individual visits by Apollo sales force, to local doctors to build relationships Frequent mailing by Apollo to the doctors, to keep them informed about the hospital's services and procedures
• • •
Track number of referrals made by individual doctors in a computerized database Inform and update referring doctors about the progress made with the patients Encourage Apollo doctors to participate in national Medical Association meetings to increase the Hospital’s familiarity to doctors across the nation
Corporate and government employers – Less price sensitive than those who paid out of pocket
Target key decision makers such as top executives, human resource managers, trade union leaders and company medical advisors
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Mailings and individual visits Conduct programs at the companies to increase awareness and teach skills such as first aid
APOLLO HOSPITAL’S MARKETING MIX PRODUCT A product is a set of attributes assembled in an identifiable form. The product is the central component of any marketing mix. The product component of the marketing mix deals with a variety of issues relating to development, presentation and management of the product which is to be offered to the market place. It covers issues such as service package, core services and peripherals, managing service offering and developing service offering. Apollo Hospitals today offer the following services: 1. Emergency services – Emergency services and care at Apollo hospitals is unique and advanced. The hospitals have state-of-the-art ambulances. The CCU's on Wheels under supervision by medical and para-medical staff. There is hi-tech telecommunication available to a patient in an emergency at any given time. 2. Ambulance services – Hi-tech ambulances linked by state-of-the-art telecommunications are fully equipped with doctors that are available to render medical attention and assistance in case of emergencies at the patient's doorstep.
3. Diagnostic services – Apollo Hospitals are multi-speiality and multi-disciplinary, that can
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handle any kind of ailment, they offer a wide range of facilities for instance, Oncology, Orthopedics, Neurology, Plastic surgery and so on.
4. Pharmacy services – Apollo Hospitals also have a pharmacy which is open 24 hours. It caters to the needs not only of the inpatients and outpatients, but also patients from other hospitals who require emergency drugs. 5. Causality services – Causality service includes a 24 hrs. causality department, which attends to the accident or emergency cases. Apart from the above mentioned services, Apollo Hospitals also offers "Health Diagnosis Programme" which is a complete, comprehensive, periodic health check up offered for busy executives, professionals, business persons and so on. The health diagnosis programme comprises of the following: 1. Master health check up 2. Executive Health check up 3. Diabetics health check ups etc., Generally, the service offering in Apollo Hospitals comprises of the following levels: 1. Core level – it comprises of the basic treatment facilities and services offered by the hospital like diagnostic services, emergency services, casuality services etc.
2. Expected level – it comprises of cleanliness and hygiene levels maintained in the hospital.
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3. Augmented level – it comprises of dress code for staff, air conditioning of the hospital, use of state of art technology, services of renowned consultants. Apollo hospital provides quality healthcare services with more than 53 branches across the country. Prominently Apollo is known best for heart problems and Knee and Hip replacement surgeries besides other major ailments. The specialities include – Heart, Orthopedics, Spine, Cancer Care, Gastroenterology, Neurosciences, Nephrology & Urology Critical Care. PRICE It is one of the most prominent elements in the marketing mix. Price charged must be able to target customers and it should co-ordinate with other elements of the marketing mix. Price usually depends on treatment prescribed by the respective consultants and the facilities offered to the patient. As a service is intangible, it is very hard for deciding the price of the particular service offered. Pricing strategy adopted does not depend on the price offered by competitors. The pricing strategy is formulated after consulting the concerned heads of department. Prices of various facilities revised every year depending on the change in technology. Before fixing prices, government controls are also taken into consideration. On admission, an initial deposit will be collected at the inpatient billing counter. The amount extends on the category of room and the treatment or surgical procedure planned. Various categories of rooms, ranging from the general ward which attends to the needs of the lower classes to the deluxe suite which attends to the needs of the middle and upper classes are available. The hospital is priced premium and it can afford to do the same because of its positioning and its assurance as well as the reliability on the brand of Apollo hospitals. Along with it, it also
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helps that there are so many locations and specialities in Apollo hospitals. Thus a patient is reassured of his well being. PROMOTION Promotion function of any service organization involves the transmission of message to present, past and potential customers. Customers need to be made aware of the existence of the service offered. Promotion includes advertising, personal selling, sales promotion and publicity. Apollo does not normally undertake aggressive promotion, they rely a lot on a favourable word of mouth. To crease the clientele, a hospital may continuously introduce different health services like the acupressure clinic, master health programmes and diabetes health checkups apart from annual health checkups offered to different companies. Apollo conduct camps in rural areas to give medical check ups at a reasonable price so that the rural people approach the hospital again in the future. They also sponsor frequent visits to the spastic society, old age homes, etc. Hospitals generally advertise in health and fitness magazines. Apollo promotes itself through the Community Initiatives viz
SACH – Save a Childs Heart CURE – Extends preventive as well as rehabilitative cancer treatment to the economically backward.
SAHI – Society to Aid the Hearing Impaired DISHA – Distance Health care Advancement Project
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PLACE It refers to contact point between the customer and the service provider, who gets the benefit of the service. This element in the marketing mix leads to the identification of a suitable location. The two major issues considered regarding the decision of a place are accessibility and availability of the service to customers. Accessibility refers to the ease and convenience with which a service can be purchased, used or received. Availability refers to the extent to which a service is obtainable or capable of being purchased, used and received. Factors influencing the placing decision are market size and structure by geographical regions, number and types of competitors in the region, location of potentially attractive consumer segments, local infrastructure, good road access facilities and public transportation network. A hospital must be ideally located and must be easily accessible to all. Apollo Hospitals has around 8500 beds across 53 hospitals in India and overseas. It is located in 15 different places across India which include Ahmedabad, Aragonda, Bangalore, Bhubaneshwar, Bilaspur, Chennai, Delhi, Hyderabad, Kakinata, Kolkata, Madurai, Mauritius, Mysore Noida. PEOPLE The People component reflects the important role played by individuals in the provision of services. People are also an important element in the marketing mix. Service personnel play an important role in an organization which offers service. The behaviour and attitude of the personnel offering service will influence the customer's overall perception of the service. Customers are a source of influencing other customers by word of mouth.
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It is necessary that the staff in hospital are trained to offer quality patient care with human touch using state of the art technology. The objective of offering quality service to the patients can be attained by:
o Motivating o Offering
employees to be efficient, dedicated and loyal to the organization.
regular on-job training of employees to ensure continuous
improvement in health care.
o Utilizing o Use of
services of professional competent medical consultants.
Motivation is not necessarily by giving high salaries. There are many other ways to motivate the employees. Concessions should be given to the employee's near ones. There should be regular liaison with them at all times. Knowing what the employees want is very important. There should be active participation of the employees in the activities of the hospital. In a hotel, where the clientele is happy, free from any kind of tension, the job of the staff becomes much easier, whereas in a hospital, the staff has to cater to the needs of sick, depressed and an agitated lot. Warm ambiences with efficient and cheerful staff help make the experience of the public a memorable one. Therefore, it is very important that the staff of the hospital is friendly and comforting, always wearing a smile. Apollo Hospital currently engages more than 19,000 doctors, nurses, paramedics, clinical staff and management professionals to manage over 8500 beds across 53 hospitals in India and abroad. Along with this Apollo Hospitals has several courses along with research facilities to facilitate innovation. The management of Apollo Hospitals is continuously
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involved in motivating the employees and ensuring that the best of services are offered to it customers. PROCESS Process is a set of activities that take an input, convert it and add value to the input and finally create an output. Process has only recently been given much attention in the service sector although it has been the subject to study in manufacturing for many years. Processes are designed by blue a print, which sets a standard for action to take place and to implement the service. In a hospital, the process is divided into three phases.
1. The Joining Phase It includes the following: • The arrival of the patient.
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Registration – where a patient has to make an initial deposit at the in-patient billing counter after which a file is opened in the patient's name to know the patient's medical history.
2. The Intensive consumption Phase It includes the following: • Diagnosis – where the consultant diagnoses the illness by making the patients undergo various tests. • • Treatment – when the illness is treated with proper medication or surgery and so on. Information about further actions – the consultant will instruct the patient regarding the diet to be followed, the medication to be taken, when to consult him again in the future and so on.
3. The Detachment Phase It includes the following: • Discharge of the patient – a patient can be discharged from the hospital on the advice of the consultant • Payment – after the patient is discharged, the bill will be paid at the billing counter.
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At this stage, the patient is requested to fill an evaluation form, which assists the hospital authorities to know the level of satisfaction derived by the patient. Patients' suggestions are always welcomed, valued and considered and many times are very useful for improving the services of the hospital.
General Process Organization in a Hospital
Patients (External Customer)
Within the hospital, it each department is looked, it is noticed that each department serves the needs of another department, for example, the purchase department serves the needs of the stores, the billing department serves of the finance department and so on. So in a way, each department is a customer to another department, while at the same time it might be a supplier to another department. Each department is an "internal customer" or the other departments.
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Only when each unit of the hospital understands who their customers are and what their needs are, will the hospital develop basis for giving the best service in the most efficient way to the patient. In a way, each department or unit should consider itself to be a service provider serving the needs of the customer department. In a superficial level, it may seem as if each department is working as an independent unit rather than a team. However, the world-over in many organizations that have used this concept, it has found that this kind of a customer-supplier relationship helps to offer an important system of checks and balances and gives the organization a more focused customer orientation. Apollo Hospital believes in making the stay of its patients a memorable one by providing world class services. Right from requesting in formation pertaining to a particular query or ailment to providing feedback has been simplified by just a press of a button. There are convenient of ways of making payments on line and even referring customers. The largest achievement of the Apollo Group has been to take quality health care to across the length and breadth of India. This operation in itself involves very established procedures and documentation. It has been a major player in scripting the medical landscape of the nation. This is primarily because the group has continuously been at the helm of several gamechanging innovations in Indian health care. Apollo Hospitals is NABH, NABL accredited and also has ISO 9002 award.
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It is the environment in which the service is delivered with physical or tangible commodities and where the firm and the customer interact. Physical evidence plays an important role in hospital services. It makes a huge impact on the customer. Physical evidence offers customers means of evaluating the service. Corporate image plays in important role in terms of physical evidence. This can be developed through corporate relation programmes. Modern hospitals need to create a good ambience. Right from the reception one finds very cordial and comforting staff. The ambience plays an important role because when a patient walks into the hospital he immediately forms an opinion about the hospital. The staff follows a dress code to show professionalism and to maintain discipline. The staff is trained to be understanding, warm and comforting because the clientele that goes to the hospital is usually disturbed or unhappy. It is necessary for a hospital to be well organized and segregated into different departments. All the doctors should be offered with a well-equipped cabin. The entire hospital should be centrally air-conditioned with good lighting. Ventilation is taken care of by air-conditioning. Special care should be taken to maintain hygienic, cleanliness and whole hospital must be well lit. This is taken care of by the housekeeping department. A hospital has to keep in mind both the aspects of physical evidence that is essential and peripheral evidence. Physical evidence particularly plays an important role in the hospital where the patients are already depressed or traumatized and a good atmosphere could make all the difference. Apollo Hospital has been known for its quality health care services, at much affordable price. It provides the services for all the ailments & diseases, assuring the healthy recovery with quality care from the staff. Apollo Hospitals conducts a rigorous site survey process as well
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to take care of various parameters in all their hospitals. It has world class infrastructure and makes the stay of its patients comfortable.
CONCLUSION Marketing is a function by which a marketer plans, promotes, and delivers goods and services to the customers. In the services marketing, the providers are supposed to influence and satisfy the users. When people buy services offered by a service provider in a true sense, they buy the time, knowledge, skill or resources. Marketing the service is meant marketing something intangible. It is like marketing a promise. The applications of marketing principles in the services sector are the main things in the services marketing. It is the managerial process of managing the service. By the start of the new millennium, Apollo Hospitals Group had become an integrated healthcare organization with owned and managed hospitals, diagnostic clinics, dispensing pharmacies and consultancy services. In addition, the group's service offerings include healthcare at the patient's doorstep, clinical & diagnostic services, medical business process outsourcing, third party administration services and heath insurance. To enhance performance and service to customers, the company also makes available the services to support the business of healthcare; telemedicine services, education and training programmes & research services and a host of not for-profit projects. Apollo Hospitals Group takes into account the various aspects of marketing mix of services. It incorporates all the seven P’s namely- Product, Price, Place, Promotion, People, Process and Physical Evidence. The whole working of the group is based on the basic elements of marketing. Starting from super specialty services to premium prices to a coverage across the
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globe to best promotional measures to highly qualified doctors and nurses to a well planned patient service process to finally the most comfortable and globally at par Infrastructure.