The Young Turk

He started Heritage Hospital in 1994 with only 30 beds. Now, he is all set to roll out an 800-bed Medicity

Dr Siddhartha Rai (43) Managing Director, Heritage Hospital, Varanasi

Born in 1965 in Kolkata, he did his MBBS and Post Graduation in Hospital Administration from KMC, Manipal.

Why an entrepreneur?

It was his PG course in hospital management that gave him exposure to the functioning of a good corporate hospital and gave birth to the desire in him to start a state-of-the-art corporate hospital in his hometown Varanasi. "I was impressed by the way the Pai family is managing their group of hospitals and wanted to get into having my own set-ups someday," says he. The fact that his hometown Varanasi lacked good medical infrastructure also consolidated his plans to set up a multidisciplinary hospital under one roof.

The first move

While most people try their hand at hospital administration before embarking on the journey of entrepreneurship, he plunged into entrepreneurship immediately after his PG course. In 1994, he conceptualised a diagnostic centre, which was centrally air-conditioned offering pathology, radiology, neurology and cardiology facilities at an estimated cost of Rs 5 crore in Varanasi. But soon realised that a standalone diagnostic centre was not a viable business proposition. So, he modified his plans and started a 30-bed hospital along with a diagnostic centre. "An initial amount of Rs 1.5 crore was pumped in by exhausting all family resources. The rest of the amount was taken as a loan from PICUP, a state Government enterprise,” says he. Heritage Hospital was finally commissioned in 1995.

Fears and apprehensions

"I was convinced about the project, hence there was no fear or apprehension," says he.

Overcoming roadblocks

Getting loan from the Financial Institutions (FIs) was not easy as hospital financing by banks was uncommon at that time. "They questioned the concept of starting a posh hospital spending as much as Rs 5 crore. State FIs found it difficult to comprehend why an X-ray costing Rs 45 lakh or marble flooring for the floor are required," says he. Dr Rai convinced the GM of the FI by taking him to some corporate hospitals in south India to explain the concept of a modern hospital to him.

It was equally difficult for Dr Rai to get trained manpower from outside Varanasi as it is not a metropolis. "By creating a world class facility, I am able to overcome manpower issue," says he.

The challenges continued even after the hospital was commissioned. "Varanasi was not prepared for a corporate hospital then. Patients would come and ask me as to why our consultants are charging Rs 100. Power situation is such that even today one runs the hospital virtually off grid!" says he.

Cash crunch and cost over-run were also bothering him in the beginning. In the first month, when the salary bill was Rs 90,000, he did not have that money. "I went to my father and asked for money. He told me that he would give me money only for that month only. Today, after a 15 per cent growth, I pay Rs 60 lakh as salary to my employees," says he.

Mistakes made and lesson learnt

"We should have had more land to expand, which is costing us dearly now," says he.

Over the years

The hospital has expanded to become a 150-bed tertiary care hospital. From four full-time doctors, 10 part-time doctors and 50 staff members, today the hospital has 327 people and 56 full-time consultants. It has discontinued part-time consultants practice as Dr Rai found that they were not leading to the growth of the hospital.

In 2001, the hospital received a major boost after it opened a state-of-the-art cardiology department with cath lab etc. It is also an ISO-9000-2001 certified hospital. "We have now applied for JCI accreditation also," says Dr Rai.

The hospital has also started DNB programme in family medicine, radio diagnosis and nursing school. In 2000, Dr Rai also started a 35-bed mother and child care centre called 'Matrika' in the vicinity of the hospital. In 2006, the group has entered into a tie-up with a hospital in Kathmundu. "We are supposed to upgrade the hospital from 70-bed to 150-bed," says he.

Contribution to healthcare

Led by Dr Rai, the hospital has seen a list of firsts for Varanasi. It conducted the first kidney transplant in 1999 and the first MRI.

Any formal degree in management?

"Yes, it's important to have one, specially in such areas where you have to deal with highly skilled, qualified manpower and state-of-the-art technology for medical equipment. My post graduation in management helps me a lot," he opines.

Tips for entrepreneurship

"Conviction and perseverance are the most important attributes," says he.

An entrepreneur that you admire in healthcare and why?

“Every successful individual has some qualities to learn from. Dr PC Reddy, Dr Devi Shetty and Dr Naresh Trehan are torch bearers to the newer generation,” says he.

Way Ahead

He is in the midst of starting a 800-bed Medicity in Varanasi at National Highway Bypass, around 10 kilometers from the present hospital site. He has already roped in CPG Architects from Singapore for the job. The Medicity would have 250 superspeciality beds and 500 general beds. The construction would start from March 2009 and the first phase with 250 beds is likely to be commissioned within 18 months. He wanted to start the project four years back. “The long delay is because of the time that the Government took to give permission for land use change. This Rs-236-crore project would see funding from a mix of equity and bank loan. We also want to get into PPPs with the UP Government to manage and upgrade their hospitals," says Dr Rai.