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Medanta-The Medicity: World class health care, with a soul
Dr Naresh Trehan's vision for his latest venture is to emulate the best-in-class health care facilities in the world
Image: Amit Verma
Naresh Trehan: Keeping health care affordable
As one of India’s leading cardiovascular surgeons, Dr Naresh Trehan is always pressed for time. When Forbes India went to interview him, he had just stepped out of the operating theatre. Patients were streaming in and out of his chambers. It was only after an hour of consultations that Trehan found time to discuss his dream project: Medanta-The Medicity, a multi-specialty medical institute in Gurgaon, modelled along the lines of integrated medical institutes such as Mayo Clinic and Stanford University Medical Center in the US.
Since its inception in 2009, the hospital has rapidly grown and notched revenues of Rs 1,100 crore in FY2014. Its early success caught the eye of the Carlyle Group which, in December 2013, bought a 27 percent stake in it for Rs 960 crore from Avenue Capital. The deal values the company at Rs 3,550 crore, and puts Medanta’s enterprise value per bed at Rs 2.8 crore compared to Rs 1.4 crore for Apollo Hospitals and Fortis Healthcare.
The man behind it
Trehan (68) is hardly an unknown entity in the medical world. As the recipient of the Padma Bhushan and the Padma Shri, he has long been in the public eye. Also because of the prominence of his first business initiative, the Escorts Heart Institute (later acquired by Fortis) in New Delhi, which he helped establish in 1988. He left the hospital after two decades to set up Medanta with co-founder Sunil Sachdeva.
The initial investment of Rs 1,000 crore was raised through a mix of equity and debt: A Rs 500-crore loan from Yes Bank and six public sector banks, and the rest from Trehan, engineering and construction group Punj Lloyd and Avenue Capital. Medanta has paid off most of the loan, with Rs 126 crore remaining.
Trehan’s mantra is “business with a soul”. He wants it to be known that he isn’t interested in maximising returns for the hospital at the cost of his patients. “Hospitals should be happy making a return of 10 to 12 percent instead of 25 to 30 percent. Otherwise, we can’t make health care affordable,” he says. Medanta’s net profit for FY2014 was Rs 187 crore.
Why it is a gem
The idea of Medanta was conceived in 2003, when Trehan decided to develop a medical institution in India that would not only deliver high quality, affordable health care but also pioneer research. “I felt that if we have to take India to a level where we can be proud of our health care, we need to create institutions such as Mayo Clinic,” says Trehan. Built on a 43-acre plot, Medanta became operational in late 2009. It has a 1,250-bed hospital with 350 critical beds, a clinical research centre and a world-class training centre for doctors. Its net worth is Rs 785 crore.
Its approach to health care differentiates Medanta from other medical institutions. The institute is working towards integrating modern medicine with traditional forms such as ayurveda, acupuncture, homeopathy and unani. “We know that modern medicine is quite effective, but it is very costly and very invasive,” says Trehan. “It cures diseases, but doesn’t empower the body to fight diseases the way traditional medicine does. If we can make a fusion of the two, we will have a powerful new medicine which will be equally effective at half the cost.”
The hospital already has therapies where it uses allopathic and ayurvedic medicine. Trehan claims he has had early successes in these practices, that are particularly effective in neurological and cancer treatment. “When throat cancer patients undergo radiation, it becomes really difficult for them to swallow food or talk,” says Trehan. “A friend who had this problem was given an ayurvedic concoction before the radiation and it eased his discomfort.”
To further the intent of research, Medanta has also signed a memorandum of understanding with the University of Texas to set up a medical college within the institute’s premises.
Why it was hidden
There is a distinct lack of ‘buzz’ about Medanta because it has not yet spent heavily in marketing and advertising. Instead, it invests its returns back into the business. Plus, its operations have been localised, as it is currently based only out of Gurgaon. However, expansion is on the cards with Medanta set to open a hospital in Indore this year. The goal is to have a hospital in the capital city of all states.
Risks and challenges
One of the biggest challenges the institute faces is the rising cost of health care delivery. Cognisant of that, Medanta is working on improving procedures and delivery systems to reduce costs.
Also, some quarters are sceptical of the non-traditional approach to medicine. Dr Sanjeev Bagai, vice chairman and director-dean of Manipal Hospital in Dwarka, New Delhi, says: “Any alternative therapy used should not contain ingredients that can counteract our medicine or damage body organs. There is no published data to show the efficacy of traditional medicine. In fact, there is enough data to show it can be harmful.”
But Trehan has faith in his approach. And, with expansion and international tie-ups as part of his strategy, he is quietly confident that Medanta will soon become a significant fixture in the health care industry.
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(This story appears in the 25 July, 2014 issue of Forbes India. To visit our Archives, click here.)
Comments 3
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Ajay PratapIndia is staring at a major epidemic of cardiovascular diseases. The brain drain of trained medical doctors to USA, UK and Australia points to a steep spike in the morbidities and mortalities in near future. In the glimmer, Dr. Naresh Trehan/his team members presents a rare example of dedication to patient care over personal career. After a successful career and clinical practice at the prestigious New York University Medical Center(NYUMC) Manhattan USA for two decades, he headed home to serve the men and women of his motherland leaving behind all the glitterati and comforts of the New York City and the USA. Dr. Trehan has since saved thousands of lives and families. After his highly successful establishment of cardiovascular institute at another Hospital in the middle of New Delhi, he has recently established a landmark multi-specialty hospital Medanta under the auspices of an integrated health care facility named MediCity in Gurgaon, India. MediCity spreading across 43 acres of land has been designed after world renowned Mayo Medical School and Johns Hopkins Hospital in the USA. Being a naturalized citizen, seven days-soccer dad and a demanding research professor job and Scientist job in the USA, I had my nerves wrecking when I heard that my father needed a very urgent cardiovascular care at an extremely short notice. I do not know how I chose to write Dr. Trehan\'s office in India immediately in extreme desperation. As Mr. Jugal Sharma, a very important team member a personal manager to Dr. Trehan replied me immediately, all I remember that I was barely stammering sitting 8000 miles away in another continent with opposite orientation to the sun. Within 24 hrs. I was able to take my dad directly to the living legend Dr. Trehan who I knew will save my father and we will live together again for many more springs. In the following days, I landed in New Delhi and my father who presented numerous layers of cardiovascular problems each deadlier than others, few days back has had surgeries and treatments in the awe inspiring Medanta hospital under the personal supervision of Dr. Trehan/team members. Now I believe very soon my father will speak with the same life and confidence that has been a hallmark of him and I am back at my work desk in the USA. I was still awestruck recollecting how the past week unfolded while driving to my work when the radio jockey played the \"Pilgrims\" by Enya over the radio. I could not be blessed more. Dr. Trehan, you did it again. Dr. Trehan, you always win but how great of you that you let you patients win so much more! It is important to mention here that Mr. Jugal Sharma was very soft spoken, cordial approachable, ready to help at any circumstances. I am also very much indebted to Mr. Sharma. Medanta, what an impressive modern architecture and outstanding clinical facility and what an immaculate and a humane place for human healing you are!. No one should fall sick but when that indeed has to happen, let us pray that the patient has one blessing- Dr. Trehan or his clones! Dr. Trehan, Thank you again!
on Mar 14, 2015 -
Dr Arvind Sharma
When Dr Trehan talks about alternative medicine, he is just saying what the majority of Indians want to hear. The exaggerated claims about efficacy of alternative medicine are nothing but \'selling HOPE\'. As part of bringing up every Indian child gets familiar with tall claims about alternative medicine, and is programmed to believe these. Secondly, practitioners of alternative medicine keep claiming cures for incurables like cancer, asthma etc. without showing any believable or proven bulk of cases of cure. They know nothing sells like hope. Dr Trehan has just joined their ways of sales. No doubt he has been a surgeon par excellence.
on Aug 19, 2014 -
Parag Jain
\"Affordable Healthcare\" AND \"Medanta\" doesn\'t go well together. See their charges here and compare it with any other player in the Industry to check your facts again.
on Jul 15, 2014
