Biz Lounge — Max Healthcare's CEO talks business

From Mint's Biz Lounge series. As chief executive of Max Healthcare, Dr Bakshi describes the group's growth and surveys the trends then shaping India's private healthcare market. What follows is an edited transcript.

On the business. Max Healthcare was set up almost eleven years ago. It started with a small clinic in South Delhi and has since expanded to almost eleven hospitals across north India, with three more recently opened in Mohali, Bhatinda and Dehradun.

This time last year we had only 900 beds operational. We have expanded to 1,900 beds over the last twelve months, having opened four new hospitals. We have gone from roughly 5,000 employees last year to 8,000 this year, with almost 1,500 doctors and around 2,500 nurses. Our patient numbers are interesting: we do almost 10,000 patient interactions a day in an outpatient setting, and every night we have approximately 1,000 patients in our inpatient facilities.

On where the market is going. India is moving toward chronic disease, which was not the case fifty years ago. Asthma, blood pressure, diabetes, cancer are becoming more common, and are a serious concern both for hospitals and for the government.

The business implication, and this is true worldwide and not only here, is that the hospital model does not work for these diseases. A hospital is a five-hundred-year-old business model that requires a patient to fall really sick and then come in. If you have high blood pressure you should never need to go to a hospital. What you need is a daily intervention, maybe four or five a day. So there is urgency in a business like ours to innovate, and to look after patients while they are at work or at home.

The other concern is how much the government is able to spend. I think the government wants to spend more. They have been talking forever about raising total government health expenditure from one per cent to two. It does not rise, partly because GDP is growing so fast that you have to spend much more just to hold at one per cent, and partly because it is hard for government machinery to deliver healthcare. That is why there is now so much talk of public-private partnership, where the government becomes a purchaser of care from private providers, closer to the UK's NHS model.

On whether profit has raised the cost of care. I disagree with that. There is a sense among people that profit is somehow dirty. The same people will buy a BMW for thirty lakhs and feel afraid to spend three lakhs on their father's implant. You forget that the doctor has spent twenty years learning and training to reach that level of expertise.

I do not think profit in itself is bad. I think profit is a necessity for delivering good quality care. A simple linear accelerator costs twenty crore rupees. Where is that going to come from if there is no profit in a hospital? There is a perception in society that health should be free for all, of the best possible quality, and paid for by nobody. That is not possible. A society has to pay for its own healthcare, either through the taxpayer and a national health system, as some Scandinavian countries have achieved, which is in a way the ideal model but incredibly hard to deliver in a country this large, or through the private route. Even the United States struggles with a national model.

On unnecessary tests and procedures. That does happen in Indian corporate hospitals, and I feel violently against it. This New Year's Eve I sent a note to the entire hospital saying we must do the right thing on every occasion.

How do we know what the right thing is? We have two tests. The first we call the family test: if you think this would have been acceptable for your own family member, and your heart is comfortable with it, whether that is an extra test, an extra operation or a longer stay in intensive care, then it is fine. If you feel uncomfortable, if some part of you says this is avoidable, then it is not fine.

On the government's universal healthcare plans. I have been watching government plans for nearly two decades. When we were in medical school we were taught health for all by 2000. That was the mantra. The year 2000 came and went, and nothing really changed. So I am doubtful about how these statements convert into reality. It is easy to write a plan and very hard to make it real.

We have worked closely with both federal and state governments, and the fundamental dynamic to recognise in India is that health is a state subject. The federal government can say what it likes. The real change has to happen at state level. Some states are very progressive. Take Kerala, with its excellent outcomes. There are states in the north, like Uttarakhand, that have done real work in making change happen. And there are states for which, honestly, health is not a priority.

So what you are hearing me say is that this is a step in the right direction. Do not hold your breath. It is going to take a long time.