On the Growth Trajectory

Reputed neuro-surgeon Dr Apte set up a 20-bed hospital in 1994. By June 2009, the group will have close to 1,000 beds in eight hospitals

Dr Charu Apte (54) Managing Director, Sahyadri Hospital, Pune

Born on 1954 at Grenoble in France in a family of mathematicians, Dr Charu Apte studied in BJ Medical College, Pune for under-graduation and then shifted to Christian Medical College Hospital, Vellore for post graduation in neurosurgery.

Before being an entrepreneur

He started working in CMC, Vellore in 1978 as a trainee and then as a neurosurgeon, he worked there till end of 1985. In 1986, he shifted to Pune and started practice at hospitals like KEM Hospital, Jehangir Hospital and later at Ruby Hall Clinic.

Why an entrepreneur

After eight-long years of practice, he was frustrated at his failure to convince any of the hospitals in Pune to develop a dedicated neuro set-up. "As hospitals were not evincing any interest in developing neurology-neurosurgery, I decided that unless we neuro professionals take the initiative, a full-fledged department will not materialise. So, it was only this limited intention that drove me to entrepreneurship," says he.

"I remember telling my family that I will land up spending a lot of energy and time for the next 10 years of my prime 30s, but at least I have the hope of enjoying a good quality set-up at some point of time, which is a much better prospect than continually remaining dissatisfied," says he.

The first move

He finally took the plunge in October 1993. He roped in three other disgruntled colleagues and decided to form a venture for starting an exclusive neurology unit. This was started as a trust and not a company and his contribution was a donation to the trust. "My parents were in the academic field and therefore funding was an issue. My parent's life savings and all the money I had managed to save in the eight years of practice was our capital, which totaled to about Rs 40 lakh and rest of the investment was bank loan from a small co-operative local bank. A few well wishers also chipped in," says he.

He started the unit from a rented premise, part of an old orthopaedics hospital. "Space was adequate but the structure was old, but this was all we could afford," says he. This was the genesis of Pune Institute of Neurology, which started functioning on March 1994.

Over the years

The concept clicked and in spite of the constraints of the physical ambience, the institute grew into a full-fledged neuro sciences unit in a span of two years. "This is when we started dreaming of a sizeable neurology hospital. By this time, I had roped in a couple of friends with management-finance background and with their help we started working on the project. We soon realised that a standalone neuro hospital was not viable. That's how we started thinking of a multi-specialty hospital," he shares.

Thus Sahyadri Hospitals Limited was conceived. "We started meeting doctors to take them in our fold. We could get hold of a centrally-located piece of land, reserved for hospital courtesy Dr Shrikant Ranade, who was gracious enough to hand-over the same to me. We could raise about Rs 50 million in share capital. The accumulated surplus of our neurology activity and the money we raised through share capital and debt courtesy Union Bank of India was enough to build a Rs-500-million hospital with focus mainly on tertiary specialties," says he.

From the first year itself, the response was good and this translated into profit in the very first year. It was in March 2005 that Sahyadri started and by 2006, he was already planning further expansion.

Fears and apprehensions

When he started the first neurology unit, he had apprehensions about whether doctors at large would support the facility as a unit, going beyond the personality-based referrals. "The answer was yes, but it required loads of patience. However, when we ventured into the present Sahyadri Specialty Hospital, I was very unsure because we were depending on the response of many doctors from varied branches, something we were not exposed to earlier," says he.

Mistakes made and lessons learnt

He took time to realise that the number one customer of any hospital are doctors. "Please treat and handle them with special care. A doctor entrepreneur almost always feels that he/ she understands all aspects of healthcare be it operations, marketing, administration or finance and this in my experience is a pretty common cause for many failures. Let's stick to our own competency and respect others equally," says he.

Any formal degree in management?

No. "I am and will continue to be an actively practicing neurosurgeon. Yes, there is no doubt that a good hands-on background in management is of great help. I have a very strong management team in my colleagues and co-directors and therefore I do not feel the need to do it myself but otherwise it certainly is very useful," he feels.

An entrepreneur that he admires in healthcare

“Dr Prathap C Reddy for his sheer conviction that this country will welcome private healthcare with open arms, at a time when no one even thought of it. For his amazing personal rapport with all the doctors working at so many of his hospitals,” says he.

Way Ahead

It is not even three years that Sahyadri was started and he is already planning further expansion. "With a little fund at our disposal, we decided to experiment with a small hub, a small community hospital in a densely populated area with the help of local doctors, a strategy aimed at netting more and more doctors and also testing the oft-spoken but not commonly tried concept of 'closer to customer' in healthcare. It was also to see if such small community hospitals work as a brand ambassador," says he.

He has rolled out a plan of starting a string of small and medium-sized hospitals, as well as large sized tertiary care hospitals in other cities in the state of Maharashtra. "We finalised ICICI Venture as our private equity partner and got them to commit investment of Rs 1440 million in our equity, which could in turn fuel our Rs 3,600 million expansion plan," says he.

He is futher looking at expanding to about 3,000 beds in the next two to three years in Maharashtra and probably Gujarat. "We started as a 20-bed facility in 1994, grew to 160 beds in 2005 and will be close to 1,000 beds by March 2009 with eight hospitals (one hub and seven spokes) in Pune and four in other tier II cities of Maharashtra," says he.