Started as a single-doctor clinic in Dubai in 1987 by Azad Moopen from Kerala, Aster DM Healthcare has now grown into a global healthcare chain with 380 facilities, including hospitals and clinics. In an interview, Dr. Moopen, CMD, speaks about the company’s plans.
How did DM become part of the company’s name?
DM is Dr. Moopen. There is a story behind DM which most people do not know. When we started changing the name to Aster there was a revolt in the organisation.
The 2,500-odd employees were so attached to the previous name that they were up in arms and were not allowing us change the name.
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It went on for three months. People were not coming into terms with the new name. I met many people personally, had many town halls and told people that the person who should have greatest grief in this name going away is myself. Because it is my name which was being taken away. They were still unmoved. Finally, we arrived at had a compromise and decided to add DM to the company’s name. That how the DM came.
What is your management style and philosophy?
I am into a business which is different than other businesses. In healthcare profit has to be a byproduct. That is the underlying core principle. I always believed that there are 3 Ps in service industry like health. The 3 Ps are people, people, people. Even if you do not have good equipment, do not have good facility, people will work passionately together to make a difference. Our brand promise is that we will treat you well and literally, we look after everyone very well.
What is the difference between running hospitals in the Gulf Co-operation Countries and India?
Initially, it is quite difficult GCC countries when you establish a business as you have to go through all the regulations and fulfil every licensing norm. But once you start, it becomes easier. In India starting is easy but once you start and go forward it becomes difficult.
In GCC, authorities exercise greater control. There, doctors need to upskill themselves. In GCC, fixed hours of continuing medical education is mandatory; that is required to be certified for your licence to be renewed. But in India, most people do not bother to upskill themselves. Accreditation process is compulsory in many GCC countries. All healthcare institutions in the GCC have to be accredited by one of the international agencies. That is not the case in in India.
So, here, one is not sure whether a hospital is keeping to a certain level of standard. In GCC, mostly it is insured patients. But in India, a majority of patients are uninsured. Here insurance is only for the in-patient cover. But in GCC, insurance cover is both for in-patient and out-patient. Return on investment is much higher in GCC compared with India.
You started your first Indian venture in 2001. How has the Indian business grown?
Initially the growth in India was slow. But for the last 7 to 8 years this business has been growing very well. We have 1000 beds in GCC but in India we have 3,800 beds. We have 12,000 staff in India and 8,000 in GCC. From the business point of view, the Indian business is profitable. So, our whole strategy on hospitals, revolves around having large hospitals in large cities here. Earlier we had some small hospitals in smaller cities but now the strategy has changed.
What is your pan-India expansion plan?
There is still opportunity in south India. There are many places where we can go. Our strategic plan is to remain in south and west. We hope we will go to north in future.
What is your investment plan for the next five years?
We are adding one hospital in GCC and one in India every year. In the next five years, we will add 1,500 beds in India and 400 beds in GCC. Every year, we will invest about ₹300-₹400 crore in building hospitals.
Are you looking at acquisitions?
In India, the valuations are very high. So, we are not looking at any [acquisitions] now. As a strategy, we don’t want to spend a lot of capital now. We are reducing capital investment and want more of free cash flow. We are opting for an asset-light model. We will look at more management contracts. We may also get our hospitals built by somebody and we will run it. We are looking at running government hospitals in Saudi Arabia.
What is your overall global expansion plan?
We would like to remain an Asia player. Until at least 2025, we would not go to other geographies.
What’s new being planned for India?
We will soon be starting our laboratories business in India. We already have them in GCC. The Indian ventures will start in next three months. These will be stand alone pathology labs. To begin with, we will open these labs in the five States where we are present.
What are the challenges and opportunities in India?
Opportunities are that it is a growth market. There is significant demand-supply gap. Whereever we have gone recently, the break-even has happened quite fast. So, we are hopeful of rolling out a much larger hospital chain in India. One of the most important things that has come recently is the Ayushman Bharat scheme. I see it as a boon for the private health care players like us. Not because it is bringing business to us because this will take the burden off the poor patients from the government.
What is the succession plan?
We have taken a decision to do succession planning for our top 100 positions. Everyone has been asked or is being asked to point out a successor for him/her. Even I am undergoing that. In the last one year, I have identified the successor and slowly transferring business responsibilities to her. Each year, a small part of the business is being given and by 2022, I hope to hand over most of my responsibility except for areas like strategy, CSR and innovation. My eldest of three daughters [Alisha Moopen, deputy managing director] is now taking care of many of the areas. She is doing it well. Now 38, she is a CA and joined us 7 years back. She has capability and PR skills. The most important thing is she has been accepted by the people. In family businesses, it is very important that you have clarity on how the succession is going to be. You have to make it very clear that if you have other heirs, they will be having financial benefits but not be involved in the management. Even when there is no person in the family to come to that level, one should just allow the outside manager to come in. Otherwise they will erode their own wealth.
You made your name, fame, wealth in GCC. How are you giving back to India?
Giving back is very close to our heart. In 2011, when I got the Padma Sri, we declared that 20% of our wealth will be given to the poor. So, we started the Aster Volunteer Programme which is doing extremely well. Every year we spend large amount of money. We do lot of charity for the patients and during the Kerala floods last year, we had promised to construct 250 houses for those who lost their homes. [As many as] 100 houses we have completed. My whole idea is that in three years time, once I am out from company responsibility, I will be spending 80% of my time on philanthropy and giving back.
Source: The Hindu