How a doctor plans to set up a hospital chain

He became a laughing stock among friends when he announced his plan to set up a hospital in Gurgaon, 11 years ago. Today, Umesh Gupta, a Delhi-based cardiologist, is having the last laugh.

His Umkal Hospital in Sushant Lok in Gurgaon is profitable and his healthcare company, Umkal Hospital Private Ltd is on a roll. With a project cost of about Rs 500 crore (Rs 5 billion), Gupta is looking at a chain of hospitals and polyclinics in and around Gurgaon.

While a multi-speciality hospital is ready for inauguration in Gurgaon's Palam Vihar, the company is close to signing deals with private equity investors for a Rs 120-crore (Rs 1.2 billion) super-speciality project in DLF in Gurgaon.

As a part of the project, the healthcare company is also planning to set up 10 hospitals in cities within a driving time of 4 hours to 5 hours around Gurgaon.

Says the company's executive director Ajay Gupta: "We are looking at a hub and spoke model." The cities under consideration are Aligarh, Jaipur and Ludhinana.

The idea is to provide good medicare facilities at competitive rates to people in tier II cities. "It is the common man who needs healthcare facilities he can afford. Why should he rush to the metros for medical help?" says Umesh Gupta.

In Gurgaon, however, Umkal is set to face stiff competition from at least 8 or 9 major healthcare players including Fortis, Artemis, Max and Naresh Trehan's Medicity. But, Gupta is not worried. He says that Gurgaon will need at least 10,000 beds in the next few years since the city is seeing exponential growth.

"There will be 8 to 9 players in the next two years. Beyond that, there will be more new entrants. But I expect patients from Delhi also to use the facilities in Gurgaon since they will be cheaper and not as crowded as those in the capital," says Gupta. Besides the growing healthcare insurance service industry will drive the demand for good medi care facilities, he believes.

In order to increase Umkal's brand awareness and expand its reach, the company is launching a secondary chain of exclusive polyclinics. These wellness centres have diagnostic, consultancy and pharmacy facilities.

"They will act as feeders to the main hospitals," says Gupta. The company's long-term plans also include setting up of a nursing school.