Hub-And-Spokes Hospital Strategy Gains Currency

It is the latest trend in the healthcare business. Companies are using the hub and spokes model to set up a network of hospitals in the country. And the players include Max Healthcare (a division of Analjit Singh-promoted Max India), Fortis Healthcare (a company promoted by Malavinder and Shivinder Singh), the Escorts group and the Apollo Hospitals group.

Thus, Fortis is setting up the super-speciality Fortis Heart Institute at Mohali near Chandigarh. At a cost of Rs 155 crore, it will be connected to six multi-speciality secondary care hospitals located at Jullundhur, Ambala, Ludhiana, Amritsar, Simla and Jammu. The company is looking at either putting up these hospitals on its own or going through the joint venture route.

According to Fortis director (corporate marketing) Janak Singh Bajwa, the six hospitals will be linked with the hub at Mohali, which will also have an electronic patient record. "Doctors from the hub can be contacted for a second opinion," he said, adding: "The idea is to be available for all the needs of the patient."

The Apollo Hospitals group which runs 33 secondary and tertiary care hospitals (while 12 are owned by the group, it manages another 21) has drawn up plans to have 250 clinics all over the country in another two years' time.

None of these clinics will be owned by the company; instead they will be franchises. The network will also provide a channel for the group's foray into third-party assurance.

According to sources, the group has taken a top-down approach as it has been able to establish a strong brand equity for itself. Also, because of the strong focus on information technology, the group feels that the clinics need not be located close to the bigger hospitals. This will enable the group to have a better geographical spread for its clinics.

Max Healthcare is looking at putting up 28 primary care centres, called Dr Max Clincs, five secondary care hospitals called medCEntres and a Rs 150-crore super-speciality centre at Gurgaon.

The Escorts group is looking at having six hospitals in northern India-based on the hub and spokes model. While Escorts will set up a main hospital with an investment of around Rs 70 crore, it will tie up with other hospitals and nursing homes which will serve as heart command centres.

As per the arrangement, Escorts would invest around Rs 1.2 crore to Rs 2.5 crore in each (spoke) such hospital. Escorts would take 25-30 beds in these hospitals and would have dedicated doctors (who are on the rolls of Escorts) working at these hospitals/nursing homes. These arrangements are mostly done on a profit-sharing basis.