What do you consider a fair margin for hospitals? Should margins be capped?
Fortis lost over Rs 100 crore last year. Greedy is when you make Rs 100 crore and want to make Rs 200 crore. When you are losing Rs 100 crore at PAT level and want to lose Rs 80 crore that it not greedy, it is survival. Our operating Ebidta is four-five per cent. Health care is not one of the most profitable industries by any stretch of imagination. Government pharmacies are making margins of 500 per cent on similar items and nobody talks about it. The government can choose to cap all margins if they want but then we have to ensure the business works. If the health care industry does not give returns, nobody will invest in it. I am personally in favour of a margin cap. It is good. But it has to enable investors to invest. If the industry does not give returns, nobody will invest in it. Without investments, technological advances will not be possible. For a new hospital the cost per bed is Rs 1.3-1.5 crore and for a 200-bed hospital you need Rs 250 crore. If I cannot earn Rs 40-50 crore a year, where is the case for investment.
Are doctors given targets on surgeries, etc?
I have never had such a conversation with any of our doctors. I don’t ask how many patients they see. We track every surgery done but it is up to a doctor to decide on the surgeries he/she needs to do. We have a separate team to market the brand. We do not need the doctor to do that.
Where has the industry gone wrong?
We need to establish self-regulation or oversight mechanism. We need to have some thresholds and limits. Nobody talks about the free or discounted treatment Fortis has done. Since 2000, Fortis has provided free or discounted treatment of more than Rs 100 crore. Even in baby Adya’s case, the team decided to prescribe less expensive medicines when they realised her stay would be long. We are still being accused of administering more expensive drugs. We need to do a better job in communicating.
Is there a trust deficit among hospitals, the patients, and the government?
Unfortunately, this is a vicious cycle and there is trust deficit everywhere, on all sides. That takes time. We have to take a step and work with each other. We haven’t done well as an industry working together. The industry has to collectively work towards portraying what happens inside the hospital.