'Hospital infra isn't sole determinant of better care, outcomes also matter,' says Max Healthcare Chairman

Max Healthcare, which opened a new 400-bed facility in New Delhi's Saket area, has set a sharp focus on expanding its total bed count, which has increased to 6,500 from 3,500 beds two years ago. In an interview with Teena Thacker, chairman and managing director Abhay Soi spoke about brownfield economics, medical tourism, the Middle East opportunity and his vision. Edited excerpts:

What is the vision behind the Saket facility and how does it differ from what you already have?

Everything we do at Max is reactive to the disease burden and infrastructure the market requires. It has to be contextual, responsive to actual demand. This new facility is contextual, because it caters to two distinct audiences-an aspirational India, and the global medical tourism patient. People are seeking quality. At the same time, the government of India is rightly working to establish India as a medical tourism destination.


Won't the high capital expenditure put pressure on margins?

Capital expenditure is a balance sheet item. Better quality airports don't mean you can charge more, not unless you have a monopoly, which we do not. We compete for patients on the margin, and that competition is based on the entire value proposition-outcomes, reputation, infrastructure, and pricing together.People don't choose a hospital purely on how it looks. They go for better outcomes and better reputation. Infrastructure helps, but it is not the sole determinant of better care.

How does this expansion affect your costs and what about affordability for ordinary patients?

The cost structure of the new facility is cheaper than the older one. That's the beauty of brownfield expansion. The management costs and the senior clinical talent are incurred by the existing 800 beds. When you add 400 more, you are working on a principle of incremental revenue and incremental cost. You're adding nursing staff, resident doctors, and mid-level clinicians, not rebuilding the top of the pyramid, because those leaders are already in place. So, theoretically, the cost should come down. We maintain parity with the existing facility, but we're not passing on higher costs to patients. On the insurance side, it remains the same.

Are you seeing an impact on international patient volumes given the West Asia conflict?

We have not seen any major fluctuation yet. But in the medium to long run, I believe this situation will work in India's favour. Several Middle Eastern countries were positioning themselves as medical tourism hubs. Dubai was actively building that space. Iran attracted a significant number of patients from Iraq. With that equation disrupted, those patients will start discovering India. Beyond patients, I think doctors who were based in the Middle East will now think twice before relocating there.

Do you aspire to become the top healthcare provider?

There is no gold medal for a podium finish. There is no advantage to being number one. When I think about what needs to be done, the objective is far beyond any individual organisation. Right now, the entire private tertiary care sector in India has fewer than 100,000 beds. We have a population of 1.6 billion. The UK, with 85% of our population, has 200,000 beds and its NHS is collapsing. How do we get from 100,000 private tertiary beds to 200,000, let alone address the vast underserved rest of India? We are on a crusade.

Any set target that you have in your mind?

No, my target is that I put guardrails rather than targets. I have said all the free cash flows that I have, I will reinvest and I will go up to two-and-a-half-times debt to EBITDA. But I don't want to borrow too much. We will be reinvesting all our profits. We will have to create more infrastructure for years to come.

Are you satisfied with your progress? Do you also plan to go overseas?

I am quite dissatisfied with our success. We continue to set our objectives much higher than what we are able to achieve. But no, my objectives are not to set up anything overseas. We have offices overseas for medical value travel, etc. I have a very simple dual objective. One is to cater to the healthcare requirements of our country and second is to establish India as a leading medical tourism hub.

Oncology is clearly a major focus here. What’s changing for the cancer care programme?

Oncology will largely move from the earlier facility into this new one, almost in its entirety. What that does is free up beds in the original building while giving the oncology programme significantly better infrastructure and technology — more linear accelerators, more modern bunkers, more space. And because the clinical leaders of those programmes remain the same, patients benefit from continuity of the same expertise in a far better environment.

Does that mean that all doctors from the existing facility will have admission rights here?

Absolutely. This facility not only right sizes the infrastructure of the previous facilities because over a period of time if you have a shortage of OPD rooms or operation theatres or ICUs etc this facility compensates for all of that and is complementary to the earlier facility. Any missing technology, additional bunkers, advanced equipment such as Linacs, or modern medical technology is fully accommodated here, making it a seamless extension of the existing facility..

How engaged is Max in tbe government’s “heal in India” initiative?

We are quite engaged on this front. We recently had a meeting, and another is scheduled later this month. The government has taken a very thoughtful approach rather than promoting all of India broadly as a medical tourism destination, they have strategically identified four or five hubs where the strongest clinical talent is concentrated. These will naturally be metros, given their advantages: superior connectivity, larger hospitals, advanced technology, and the social infrastructure that international patients expect.

Tell us about the CSR scholarship programme for medical students?

Max Healthcare’s NEET Scholarship Program

Out of all our CSR initiatives, this one is the most direct and satisfying. We sponsor underprivileged students who’ve cleared NEET but can’t afford medical education. Each applicant is personally reviewed; we meet them before deciding.

We cover everything: fees, laptops, textbooks, and a monthly stipend. Our own doctors voluntarily mentor them. We started with 100 scholars, now at 245. The first batch is in their fourth year. There are no strings attached. No mandatory bond to work at Max. We just want them to become good doctors.