Filipino nurse

Another vehicle for expansion is through medical tourism. Traveling abroad to receive medical treatment is now commonplace, even traveling to a developing country for this purpose. Medical tourism includes everything from cardiac care to plastic surgery to hip and knee replacements and the industry is continuously growing. 2 Although a local industry today, the medical services industry is showing that it is headed for globalization for the following reasons:

First, in the past, doctors moved to where the patients were in order to provide care, but now patients with resources can go to where care is provided. Second, “High quality care, state-of-the-art facilities, and skilled doctors are available in many parts of the world, including in developing countries. ” Finally, auxiliary health-care providers such as Filipino nurses go where care is needed. 2 From a strategic point of view you can move the output or the input, where the output is the patient, the input is the doctor.

As long as patient health care is not compromised it might be more efficient to move the patients to where the doctors are in the interest of quality, time and cost. For example, in India some of medical tourism comes from London, “People ranging from generals in the British Army to politicians to blue-collar workers are quoted, all saying, in effect, “I had a great time, and now I’m well. ” The most common treatments seem to be for cardiovascular issues, bone-related issues such as hip replacements, and general age-related issues. ” 2

At present, India provides top quality at much lower expenses than global competitors. Soft assets such as skilled health-care professionals, doctors, nurses, and technicians coupled with the fact that the cost of living is so much lower in India than the rest of the world, means that the same service is possible at a fraction of the price elsewhere. 2 These are major advantages for people traveling to India for medical services. Telemedicine is also an interesting and attractive concept which Apollo should focus on for it aims at closing the physical gap between patients and doctors and reducing travel expenses.

Through virtual interactive dialogue it allows patients and doctors at both ends of the spectrum to get to know each other, share ideas, provide information, and perform follow up sessions remotely. By increasing productivity and efficiency, this product is an essential tool for medical tourism. There are four international customer segments for medical tourism in India. These are 20 million Indians living abroad, citizens from countries with rationed health care, uninsured American citizens and citizens from regional countries where top quality health care is hard to find.

In view of this, there is sufficient potential demand for promoting medical tourism and therefore expanding Apollo Hospital’s size and profits even further. As the case states, a study performed by CII and McKinsey estimates that medical tourism might provide up to $2. 2 billion by 2012. 1, pg. 9 One strategy to capture some of these segments is for Apollo hospitals to tie-up with foreign institutions for assured supply of medical tourists.

Specifically tie-ups with capacity constrained hospitals and insurance providers will provide significant competitive advantage. Medical tourism also offers solutions for the people with little or no resources. Hospitals such as Narayana Hrudayalaya, a heart hospital in India, at no cost at all, treats indigent who suffer from heart disease and can’t afford surgery. The hospital’s surgical methods allow it to provide these services for free without hurting ongoing operations. Countries such as Pakistan, Bangladesh, and Burma are main clients of this hospital.

2 Initiatives such as these are further helping India to gain recognition in the medical services industry and Apollo could implement similar programs to further support its mission and lift its image and recognition. For doctors in India, there are still large barriers to entering the U. S. medical profession; this means that there are many very well-trained doctors available. The Indian government invested heavily in the 50’s and 60’s on tertiary education and just as there is a lot of talent for outsourcing and offshoring technology, the same applies for medicine.

2 Also, in the past, Indian doctors left India so for economic reasons, yet now India is booming and instead of doctors leaving, the patients can come to the doctors. Although countries such as Malaysia, Singapore and some areas of the Middle East are already competing in the same area, India’s deeper pool of technical knowledge and the fact that it is simply a large country and has more people gives it a unique competitive advantage. 2 However, China does pose a threat since it is also expected to have similar dynamics, plus it shares some of India’s unique features such as country and population size.

Although India surpasses China in private health care system, the Chinese are willing to spend on health care and furthermore China frequently makes the news with innovative procedures such as stem cell therapies that are not allowed in other parts of the world. 2 Critics to medical tourism industry argue that poor people would suffer from the growth of this industry. The argument is that in providing care to wealthy patients, resources would be lacking for providing care to poor people.

This argument assumes that without the existence of medical tourism, doctors would suddenly move to the villages and care for the poor. To date, there is no evidence to suggest this scenario is true. 2 “The bulk of India’s problem is primary health, and has nothing to do with tertiary care. And the primary health problem is not going to be addressed by a private hospital for the most part anyway. These are almost different industries. If someone analyzes the landscape and discovers that there is substitution between care, then there is a real public policy issue that needs to be debated. ” 2

Taking all the above mentioned issues into consideration, medical tourism is a must for Apollo expansion. Apollo must take steps into the right direction by mass marketing and communication strategies. Already, Apollo has marketed its services to international patients by partnering with SITACARE which operated more than 200 offices in India and seven in the EU. SITA’s website allows prospective clients to virtually choose medical treatments and select hospitals instantly.

Also Apollo uses the website to market its product with information and statistics on its hospitals and treatments. 1, pg.10 Since these types of strategies are based on commission fees, by creating more partnerships such as this one, Apollo could penetrate mass markets without the need for heavy investment. Financially speaking, Apollo hospital’s performance provides a further incentive for expansion.

From 2000 through 2004, the Compound Annual Growth Rate income for Apollo was 16% and analysts expect the private tertiary sector in India to keep growing at 15% CAGR. Income grew from $64 million to $115 million and mean operating and net profit margins were above industry averages by 2 and 4 base points respectively at 22.30% and 7. 92%. Debt to equity is below unity meaning they have more equity than they have debt, so their ability to meet obligations is low risk.

The change in Working Capital plus Fixed Assets divided by the change in sales from 2000 through 2004 shows that in this period for every $0. 40c invested the company increased sales by $1. 00. The average free cash flow over sales through the period is 9. 9% and since the industry is expected to grow at 15%annualy, this means that to meet projected sales growth Apollo would have to rely solely on 6% of its free cash flow, leaving almost 4% of its FCF intact.

Any company which can finance its growth without the need of equity issuance or taking on debt is an indication of positive growth. Moreover through franchising, Apollo can further expand without the need to invest heavily from its FCF. In conclusion, the expansion vehicles promising most effectively to enhance Apollo Hospitals’ profits while expanding recognition of the Apollo name are leveraging on both franchising and subsidiaries, creating IDN’s, and the heavy promotion of medical tourism. With its solid financial position and by applying these three vehicles, Apollo can implement a very good strategy for their expansion.

The short-term cash generated via franchising can be injected back into the construction of more subsidiary hospitals. Managing the system will be tough but weighing the advantages, the plan can give them a faster growth and visibility. Initially Apollo can target the major Indian cities and later expand to international territory. Apollo can launch the development of a Health maintenance organization (Insurance and Medicare HMO) which promotes high quality health care through a large network of doctors and hospitals as well as MEDICITIES in partnership with the public sector.

Products such as Telemedicine can further bridge the gap in achieving a successful medical tourism strategy. To capture its four main international target customer segments, Apollo Hospitals needs to create and promote a world class marketing strategy, such as the alliance with SITA for medical tourism and therefore take advantage of the immense opportunity to provide top quality health care at low costs, gain world market share, and return outstanding profits.

Medical treatment abroad, also called ‘medical tourism’, is a booming international industry where patients seek healthcare services from sources outside their country. Usually every type of medical treatment is available abroad with over 50 countries identifying as destinations in medical …

Medical treatment abroad, also called ‘medical tourism’, is a booming international industry where patients seek healthcare services from sources outside their country. Usually every type of medical treatment is available abroad with over 50 countries identifying as destinations in medical …

Medical treatment abroad, also called ‘medical tourism’, is a booming international industry where patients seek healthcare services from sources outside their country. Usually every type of medical treatment is available abroad with over 50 countries identifying as destinations in medical …

Medical tourism can be broadly defined as provision of ‘cost effective’ private medical care in collaboration with the tourism industry for patients needing surgical and other forms of specialized treatment. This process is being facilitated by the corporate sector involved …

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