Return of the Native

An endocrinologist, he established the 200-bed KMCH in 1987. Today, the group has three hospitals

Dr Nalla G Palaniswami (67) Chairman and MD, KMCH Group of Hospitals

Born on March 1941 in Erode district of Tamil Nadu, he did his MBBS and MD (Internal Medicine) from Stanley Medical College, Chennai. He received further training in Internal Medicine from Daniel Drake Memorial Hospital, Cincinatti, Ohio, Wayne State University Detroit, Michigan, and Fellowship in endocrinology from Wayne State University Endocrinology Detroit Medical Center Detroit, Michigan.

Why an entrepreneur?

"It happened when I decided to return to India to set up a good comprehensive and ethical hospital in India in the year 1987," says he.

Before being an entrepreneur

He worked as assistant professor of Medicine in Government Medical College in Tamil Nadu from 1973 to 1975. Then, he went to US to become Fellow in Endocrinology and worked in Wayne State University at Detroit, Michigan, US as endocrinologist.

The first move

He returned to India in 1987 with the sole motive to set up the then 200-bed Kovai Medical Centre and Hospital in Coimbatore in a sprawling 20-acre plot. "We were financed by ICICI, IDBI and IFCI in the initial years (1990-1993). We could not pay the interest and principles in the first three years. The interest was as high as 24-26 per cent," says he.

Over the years

KMCH added 100 beds more in the year 1993 as a result of the growing demand and the ever increasing occupancy rate which was always above 90 per cent. In 1996, KMCH started a 50-bed hospital at Perundurai and in 2003 established a 100-bed hospital at Erode. At present, the KMCH Group of Hospitals has a total strength of 750 beds.

In 1991, when the Hospital in Coimbatore was at its initial stages, the revenue was Rs 2.12 crore which wheeled to Rs 65 crore by 2007. The Hospital attained breakeven in the year 1996. Today, KMCH is a listed Hospital on the BSE with 7,000 shareholders. "As far as the corporate hospitals are concerned, we are at the second position, after Apollo Hospital, Chennai," shares Dr Palaniswami.

At the Coimbatore hospital, each floor is equipped with touch screen, for the benefit of patients. All patient related data is available online. It has also introduced e-cash facility and has issued internal debit cards to reduce crowding at the billing counters.

"Present funding is mainly through internal accruals and loans from the banks," says he. Over the years, the group has developed into a strong force to face the growing demands in the field of education. Under its umbrella the institutions functioning are KMCH College of Nursing, KMCH College of Pharmacy, KMCH College of Physiotherapy and KMCH College of Occupational Therapy.

KMCH has started 10 trauma care centres in rural areas, where each centre is equipped with an ambulance and a pharmacy. The ambulance service of the hospital is available for free-of-cost for all. KMCH conducts awareness programmes on insurance and accident prevention in educational institutions and private firms.

Fears and apprehensions

There were four concern areas. "How to run a hospital successfully by getting a huge loan from the banks? How to raise the initial promoter's money for the

project? How to get patients for the hospital to earn this much money to maintain the hospital and pay to the banks? How to get good doctors and staff? Even now these are the basic concerns to start a new venture in the hospital business," says he.

Any formal degree in management?

No. "I was in the field of running a hospital for more than 20 years before starting this hospital. I learned management on the job. Most of successful hospital

management chiefs in India have no management training or education. They learned their job with the help of other experts. Management education may be helpful for the beginners," he avers.

Overcoming roadblocks

He admits to having rough times in the first three years. "To make any hospital successful, we need good doctors, good paramedical staff and good infrastructure in addition to financial support. A good hospital needs two to three years for breakeven. For profitable situation, we need another three to five years if all above supports are available," says he.

"We could not pay to the banks. Our doctors were restless and banks were tight on us. Only after rights issue in 1994 (after four years of functioning), we came out successfully," he reminisces.

Mistakes made and lessons learned

According to him, the main mistake was the promoter to loan ratio was skewed. "The promoter to loan ratio was 1:2 ratio, when it should have been 1:1. Additionally, a hospital needs good committed doctors and other supportive staff. We faced serious hurdles in the initial years in that department," says he.

Tips for entrepreneurship

"You need to be bold, a risk-taker and have sincerity, commitment and a never-say-die attitude," says he.

An entrepreneur that he admires in healthcare

“Dr Prathap Reddy is the first person in India who introduced modern heart care delivery system. He is the person who brought updated medicine in India. He is the person who showed that corporate hospitals can be established and can be run successfully in India,” he avers.

The road ahead

It is in the process of adding another 300 beds with an investment of Rs 200 crore. "In the next 20 years, we will be a 1,000-bed hospital group. We grew from one main centre in Coimbatore to three other hospitals at Perundurai and Erode," says he.

"We like to be one of the contributors to the Indian healthcare system. We want to be in health delivery system, in health management system, in insurance system, pharmacy delivery system and in health education and training.

We have all these systems already in place," says he.