The hub and spoke model is increasingly being adopted to deliver high-end healthcare in smaller cities and one of the newest hospital chains to use this expansion route is the Global Hospital.
(Dr. Kancherla Ravindranath, Chairman and Managing Director).
With seemingly deep pockets funded through debt and equity, the chain is there in Mumbai, spreading itself across South India and set to enter Kolkata too.
With Bangalore, Chennai and Hyderabad as the hubs as of now, the Hyderabad-headquartered Global Hospital is using the organic and inorganic routes of expansion.
The group commenced operations of the 500-bed BGS Global Hospital, a super-speciality and tertiary care hospital in Bangalore which is a joint venture between the BGS Trust and Global Hospitals, built on a 50-acre campus of BGS Health and Education City. The total investment in the facility is about Rs 170 crore. The group aims to have five spokes for every hub.
The spokes of the BGS Global Hospital are the 60-bed Diwakar Hospital, a 20-bed hospital in Ramanagaram, on the outskirts of Bangalore which will be converted into a 100-bed hospital, a 65-bed hospital in Vijaynagar and is also looking at acquiring another hospital.
"This model is used to leverage a group's resources to penetrate areas where full-fledged tertiary care is not feasible. The spokes offer primary care and diagnostic services and the hub offers elective treatment or tertiary care," said Dr N K Venkataramana, Vice Chairman and Chief of Neurosciences, BGS Global Hospital.
The group's expansions have been funded by Indiavision India Partners of the Future Group and with money from a HNI from the US, Dr Harinath Policherla, and with loans from IDB and Union Bank.
By 2009, the group intends to achieve a bed strength of over 2,000 beds, across different locations and plans to add 5,000 beds subsequently. A spoke can cost the group up to Rs 8 crore and could be as low as Rs 1 crore, if it has most of the infrastructure.
Global Hospitals had earlier acquired the 450-bed Sri Kanchi Kamakoti Shankara Hospital for Rs 257 crore. In Mumbai the group is building a 300-bed tertiary care hospital at Lower Parel. The hospital is expected to be ready by March, 2009.
The group is also setting up a 750-bed hospital in Kolkata for which the state has allotted land. The hospital, billed as a major organ transplant centre, will depend on other super specialities like neuro-trauma, cardiac and lung care, and stem cell therapy for its main revenue stream.
"We want to involve local partners in the greenfield ventures," said a top official of Global Hospital. The group will hold a 70 per cent stake and the rest will be held by five-six top doctors from Mumbai, who will be associated with the hospital full-time.