When Fortis Healthcare wanted heart surgeon Naresh Trehan out of its new acquisition, the Escorts Heart Institute in New Delhi, last year, Trehan's ambitions to set up his own healthcare facility -- Medicity -- was cited as the cause.
However, Trehan's plans were not new. Medicity, to be set up in Gurgaon, was first announced in 2005, the year Fortis acquired Escorts Heart Institute. Trehan continued as the Escorts' executive director for two more years, as its new owners hoped for a stake in Trehan's project as well. It did not happen and Trehan was shown the door.
Days later, Trehan announced a strategic tie-up with corporate healthcare group, Apollo Hospitals, where his team runs the cardiac care unit. With his dream project close to completion, Trehan spoke to Business Standard.
Excerpts:
Has your project cost gone up from the earlier estimate of Rs 60 lakh per bed?
We estimated the cost to be in the range of Rs 60 lakh (Rs 6 million) to Rs 70 lakh (Rs 7 million) per bed. Though a major cost escalation is unlikely, inflation and increasing construction costs will have some impact. Medicity will be operational by the year-end.
None of the new hospital chains are making profits. What is the business model for Medicity?
Medicity will not be another corporate hospital. It is an institution that aims to set new standards in therapies, medical research, education and training. The bottom line is affordable treatment to all. US-based Avenue Capital and Punj Llyod have already picked up stakes in the project and share my vision. The institution will generate resources in due course of time.
But revenues are important. What is unique about your business model?
I am not a businessman trying to build a hospital. I have the experience of successfully running Escorts Heart Institute for decades. I created value for that institution. Medical institutions today are suffering from an ethics crisis.
Patients' confidence in them is lacking. We have a team of medical professionals who can inspire confidence in patients. Rest will follow.
There are several industry experts who believe that the brand Trehan was dominating the Escorts brand. Will it be the same in Medicity? What are the plans for the institution when you are not there?
Mayo brothers, who set up Mayo Clinic in the US, are no longer alive. But Mayo has stood strong for over 100 years now. My job will be to set the right foundation. We have also ensured that no individual, who does not agree with our ethics, can take over the institution. We have 51 per cent share in the institution.
Do you intend to make your team of doctors, shareholders in the venture?
You can say so. The doctors will have a majority stake in the institution. Lack of quality doctors is one of the major issues before corporate hospitals.
How do you intend to tackle this?
Recruitment is going on. We already have 200 doctors in our team. The whole team will be ready by the time the institute is operational.
Does that mean that you will pull out your teams from where they work now?
Our contract with Apollo Hospital says that I will have a cardiac unit at Apollo. That will continue.
