Name: Rakesh Salecha
Roll No: 10138
Expansion Plan for Apollo Hospitals of India
The objective of establishing IHC would be undermined if they do not intend to expand their operations in using the hybrid model of licensing and franchising.
Apollo Hospitals of India is a well-known private organization providing Health care Services. It has pioneered privatized healthcare service in India and also it has set high standards. After being in this business for almost 10 to 15 years it presently has 2 hospitals, one in Madras and second at Hyderabad. This would reduce the risk of capital lockdown and long gestation periods of investments.
These private players will build and manage the medical facilities. Apollo groups Indian Hospital Corporation (IHC) created by Dr. Reddy will play the role of consulting, helping and the guiding the private players and will also in overseeing that the medical facilities are maintained according to the standards of Apollo Hospitals. Licensing would represent a quick way to expand. Also risk involved is less as the capital involved is less. At the same time this would also limit the earnings. In this model Apollo hospital will set up major facility in major cities and these licensees will be part of the network. Licensees will help in referrals, by referring only to Apollo hospitals. Following are the advantages of this Model
Apollo would not invest in large facilities unless it broke even
Amount required would be less
Working with partners would make the venture easier
Local partners would provide land on good site which are expensive
But it has following shortcomings
Not the most profitable proposition
Since IHC will manage the facilities it would have to invest a lot on managers. Skilled workers are rare in India.
Revenue Model in this case would be that a percentage of profit would be given to IHC.
Health Management Organization (HMO):
In this model there will be enrollment of members to HMO and this will provide all the medical care required by the members in return for a fixed, annual premium. This model would be first of its kind in India modeled...