The Leader who Cares

Hailing from a small agriculturist family, Dr B Somaraju is not only proud to be associated with the Kalam-Raju stent, but he is equally proud of the fact that he has escalated his dream project's worth from Rs 30 crore to Rs 300 crore in just a decade

Dr B Somaraju (60) Chairman, Care Group of Hospitals

Born on 25 September, 1948, Dr Raju was born in to an agriculturist family. He did his MBBS and MD from Guntur Medical College, DM Cardiology from PGIMER, Chandigarh and PhD (HonCausa) from JNTU, Hyderabad. He worked as a Registrar in Endocrinology and Internal Medicine, PGIMER and Chandigarh and Registrar in Cardiology, PGIMER, Chandigarh,

Why an entrepreneur?

"We wanted to build a place where we could have professional satisfaction of an academic institution and freedom and flexibility of a private enterprise," says Dr Somaraju.

Before being an entrepreneur

In 1978, Dr Raju joined Osmania Medical College as Assistant Professor in Cardiology. In 1983, he joined Nizam's Institute of Medical Sciences (NIMS), Hyderabad as Assistant Professor in Cardiology. For one year, he was with Osmania General Hospital. Then from 1984 to 1993, he was with NIMS first as Additional Professor in cardiology division and later as the Dean and Professor.

His brush with private healthcare happened only when he along with his 60- member team cardiologists, cardiac surgeons, cardiac anaesthetists, cardio-vascular nurses and technicians came out of NIMS to start the Division of Cardiology at Mediciti Hospitals, Hyderabad in 1993.

The first move

In 1996, Dr Raju along with same colleagues formed the Care Foundation. Informs Dr Krishna Reddy, CEO of Care Hospital and a close aide of Dr Raju, "We presented a project with an integrated healthcare delivery model encompassing delivery, education and research aiming at making high quality care affordable and accessible to Technology Initiative fund of Government of India being administered by ICICI. Based on the strength of presentation an amount of six crore was sanctioned as soft loan. That became the seed crystal for subsequent Care story!"

An additional amount of about Rs 1.5 crore was mobilised from the team members, who borrowed loans at 24 per cent interest. The group first acquired AK Diagnostic Limited which was managing newly commissioned ABM Hospital in erstwhile premises of a three-star hotel at Nampally, Hyderabad.

"Things moved very fast in June 1997, wherein the 100-bed hospital was commissioned with cardiac services. This was within four weeks of beginning of our negotiations with the group," says Dr Reddy.

Over the years

In 1998, it opened its second cardiology unit at Secunderbad. In 1999, it opened its third unit in Vizag. In the same year, neurosciences specialty was started at Nampally. "By 2000, from a single specialty hospital group, we wanted to be a multi-specialty hospital group. Thus, we founded our first multi-specialty tertiary care hospital at Banjara Hill by acquiring and renovating a sick five-star hotel (Bhaskara Palace Hotel)," says Dr Somaraju. It was 200 beds when it was commissioned and now has been scaled up to 405 beds.

From 2000 to 2005 there was a lull. In 2005, the group started its facility in Vijaywada with 100 beds. From 2006 onwards, the group decided to venture outside Andhra Pradesh. In December 2006, it opened a hospital in Nagpur, acquired a hospital in Pune in 2007 and started a JV project in Raipur in 2007.

"We have witnessed phenomenal growth among private healthcare providers in terms of capacity, geographic spread and business. Care grew from single specialty single unit to multi-specialty hospital chain with 12 units in five states; from 100 beds to over 2,000 beds; from 20 medical staff to 400; from 200 associates to 6,000 associates; from Rs 30 crore per annum revenue to over Rs 300 crore annual revenue over one decade," says Dr Somaraju.

Revenues have been growing at 36 per cent year-on-year over the decade. "This year Care will have 500,000 out-patient visits, 100,000 admissions, 4,000 cardiac surgical procedures, 10,000 cath procedures, and 15,000 non-cardiac surgical procedures," says Dr Somaraju.

Care has also been synonymous with research, encompassing epidemiological, basic sciences, clinical and translational research. There are approximately 60 ongoing clinical trials. Beginning with Kalam-Raju stent, translational research lead to cardiovascular stent development programme, including drug-eluting stents and polymer-based various diagnostic and therapeutic catheter technologies, it has been working in developing telemedicine and remote diagnostic and point-of-care solutions.

Overcoming roadblocks

Building the first hospital was not that difficult. "The major challenge has been to sustain Care philosophy founded on strong ethics and values with patient interests in the centre and Care model of an integrated system of delivery, education and research with professionals working in closely knit teams, especially when we are spreading to across the country," says Dr Somaraju.

The group is mainly finding it difficult to recruit trained manpower in remote corners of the country. "It is also difficult to look for people who are in sync with our philosophy. For us healthcare is not a business model, it is a passion for medicine and an ongoing mission" says he.

Mistakes made and lessons learnt

The group has burnt its fingers in managing hospitals through franchisee models. "This model failed for us because of clash of interests. And after a couple of failure in this model, we decided to discontinue it," says Dr Somaraju. Additionally, lack of knowledge of corporate governance and business management made the group go through some rough patch. "However, we are a learning organisation and our enterprise is an experiment in motion. While we steadfastly preserve our core philosophy, we provide a large framework to innovate," says he.

Fears and apprehensions

"Frankly, we were more fearless and bolder when we begun than when we are attempting to spread our wings outside tested waters. We were ignorant of business and management. Sometimes, ignorance is bliss!" says Dr Somaraju.

Tips for entrepreneurship

"You need to have enormous passion coupled with hard work to drive your vision. If your purpose is patient care, everything else follows. You need to be the change that you want to bring," says he.

Contribution to healthcare

Dr Somaraju and his team set up the Department of Cardiology at the charitable Sri Sathya Sai Institute of Higher Medical Sciences, Puttaparthi and provided free professional services from 1991 to 1994. He had participated in randomised study of balloon mitral valvuloplasty Vs Surgical Closed Mitral Commissurotomy - Immediate and long-term results, Randomised Study of Balloon Mitral Valvuloplasty Vs Surgical Open Mitral Valvotomy - Immediate and long-term results. Dietary correlation's with lipid profiles in patients with and without Coronary Artery Disease (CAD) in Indian population, Phase-III Clinical Investigation of EB Sideri's Button device for closure of arterial septal defects and patent ductus arteriosus, indigenous development of cardiovascular catheters- diagnostic catheters, coronary angioplasty balloon, valvuloplasty balloon catheters.

He has been involved in indigenous development of external and implantable pacemakers in collaboration with Research Centre Imarat (RCI), Hyderabad, development of indigenous coronary stent in association with Defence Metallurgical Research Laboratory Centre (DMRL), Hyderabad, development of PC-based cardiac stress test system in association with Defence Bio-Engineering and Electromedical Laboratory (DEBEL), Bangalore.

He has conducted the first Percutaneous Transluminal Coronary Angioplasty (PTCA) in India on April 17, 1985. He has developed India's first coronary stent (Kalam-Raju Stent) and implanted on December 22, 1996 at Mediciti Hospitals. This contributed to significant reduction of the cost of stents, as a whole, in India.

He has contributed to the introduction of India's first Coronary Balloon Care Ultima on October 29, 1998. He also has written a book called 'clinical methods in cardiology.'

Awards

He has been honoured with Padma Shri, 'Uttama seva patra' by Government of Andhra Pradesh, Asian Innovation Award in 1998 by The Far Eastern Economic Review, Andreas Gruentzig Memorial Award, 8th Yudhvir memorial award and Express Healthcare Lifetime Achievement Award.

An entrepreneur that he admires in healthcare

He respects Dr GN Rao of LV Prasad Eye Institute.

The road ahead

Dr Somaraju plans to scale up its tertiary care model by setting up new state-of-art hospitals in newer territories. His vision for the next decade is 10,000 beds. The Group may also consider going public.

He is also working on transforming the group to become an integrated healthcare delivery model. "We want to build a network of urban hospitals (both secondary and tertiary care models), country healthcare, disease management set-up, home-based healthcare and high-end quaternary care hospital. We have already started work on this on a pilot basis," says Dr Reddy.