Beyond Cancer - Handled With Care
Image: Mallikarjun Katakol for Forbes India
here’s only one way to treat cancer: The right way, the first time.
This may sound odd for a disease which has a lasting fault line between the current practice and rapidly advancing therapies. But for oncologist Dr BS Ajaikumar, founder-chairman and CEO of HealthCare Global Enterprise (HCG), it’s a philosophy that can change the face of cancer care in India.
He’s been at it for 20 years. In the process, his enterprise has morphed from a single unit—the Bangalore Institute of Oncology (BIO)—into HCG, India’s largest cancer care network with 22 hospitals. He took the concept of neighbourhood day care centres to smaller towns where patients often dread the disease as much as the travel and dislocation associated with it.
Today, when Dr Ajaikumar looks at the over-crowded centres in Erode, Ranchi, Shimoga and Vijaywada, he wonders where these patients went for treatment earlier. During these years, he developed a technology-backed system to create centrally managed customised care to treat 40,000 new patients every year. Alongside, he also assiduously built another model—making doctors invest in the enterprise, and in the vision. Today, of 350 oncologists at HCG, 170 own a piece of it.
But Dr Ajaikumar is not content. Even as HCG continues to add new niches in cancer care, with plans to add eight more centres by 2013 when it intends to go public, he is venturing into multi-specialty hospitals through a large greenfield project in Pune. Though this shift brings scale, it also runs the risk of moving away from personalised care.
However, this unassuming doctor thinks otherwise. He wants to create “verticals led by specialist doctors” and use his experience to gain better operational efficiency. “If I reach Rs 100 crore topline [sales] in the third year, I am confident I can get Rs 20 crore in EBITDA [earnings before interest, taxes, depreciation, and amortization] in the same year, whereas I have seen others struggle to reach an EBITDA of Rs 5 crore in the fourth or fifth year.”
Dr Ajaikumar didn’t start out with honed business skills in 1991 when he, along with a few doctors, set up BIO. Then, as a practicing doctor near Chicago, US, he’d spend four months in India and travel widely to assess the quality of cancer care. Most of it was at government or trust hospitals which were over-burdened and used old technology that under-treated patients and left serious side effects.
“I was convinced that cancer care needed private enterprise,” he says. He returned to India in 2001 and acquired an oncology clinical research start-up called Triesta Life Sciences in 2005, renaming the combined entity as HCG. Beginning 2007, private equity investors like IDFC, Premji Invest, Evolvence Life Sciences and Milestone pumped in money. Fund infusion led to rapid growth. Its revenue grew five-fold, reaching Rs 280 crore in 2012. It expects to gross Rs 400 crore next year. If this growth looks like a hospital on steroids, Dr Ajaikumar explains that scale is the only way to reduce per unit cost in this high-capital expenditure business.
“Ajai has a grand vision; a definitive view of onco care,” says Gaans Ganapathy, founder of Triesta and now a director at HCG. He wanted to bring the integrated model of the US to India, but it was a challenge, says Ganapathy. But technology has been a great leveller. HCG relies heavily on it by providing targeted surgeries and keeping the equipment tuned to its protocol. All linear accelerators are programmed from Bangalore. All diagnostic tests are performed by Triesta. It also has a ‘strategic’ relationship with GE Healthcare India on molecular imaging and other latest medical technologies.
In his book The Emperor of All Maladies, Pulitzer-prize winning oncologist-writer Dr Siddhartha Mukherjee calls cancer “the quintessential product of modernity”. Ironically, the disease also requires a quintessential modern characteristic—individualism—in its treatment. Though surgery, radiation and chemotherapy are the standard treatments, how they are used in combination varies from person to person. If you don’t hurry the first time, you can nail the disease, says Dr Ajaikumar. “Cancer shouldn’t be looked upon as a killer disease, rather than a chronic disorder that can be managed for quality life.”
Of late, HCG has begun using an experimental diagnostic platform called Oncoprint, jointly developed with a Bangalore start-up Mitra Biotech. Using Oncoprint, fresh cancer tissues after surgery are subjected to the existing set of medicines for evaluating drug response. “By using this method, we choose a better drug,” says Dr Ajaikumar.