Apollo Sugar, the chain of speciality clinics focused on prevention and management of diabetes, launched as a specialized vertical by Apollo Hospitals in September 2014, is being tweaked with new facets being added to its business model and delivery formats. Running, in collaboration with Sanofi, which holds a 20 per cent stake, and launched with an initial plan to set up 100 clinics in one year, is it today at 52 clinics. These are all Apollo-owned facilities. Now, Apollo is tweaking the model and opting for a mix of its own clinics, those that could be run by a partner with a revenue arrangement and these could be with non-Apollo hospitals, polyclinics or even individual doctors/diabetologists.
"We have changed our strategy and instead of having large clinics in fewer locations we will now have smaller clinics in more locations. So, for instance, instead of one large facility in Vijayawada in Andhra, the plan would be to have, say four smaller facilities in different parts of the city," says Gagan Bhalla, CEO, Apollo Sugar Clinics. Speaking to a small group of journalists in Hyderabad on Tuesday, January 24th, he said, the goal is through all of these get to some 300 facilities across the country from 52 at the moment.
The first 50 clinics were to be set up with an investment of around Rs 200 crore but considering that each standalone clinic costs anywhere between Rs 30 to Rs 50 lakh investment, Bhalla says, "we are well capitalized for our expansion plans." In terms of breakeven, he says, each of the standalone clinic, typically takes about two years to two-and-a-half years to breakeven. Of the 52 clinics, he says, there are six centres of excellence set up across six metros (Chennai, Hyderabad, Navi Mumbai, Delhi , Kolkata and Bangalore) with each costing close to Rs 1 crore and each with five or six world class endocrinologists practicing and are all as part of Apollo hospital in each of these cities. While, the investments that standalone own clinics take could range between Rs 30 lakh to Rs 50 lakh, those that are proposed to be set up under a partnership model, are expected to cost anywhere between Rs 5 lakh to Rs 20 lakh. The investments would be more in the form of electronic health records, call centre back up, treatment protocols, depending on the city and the doctor. These doctors could enrol the patients into the annual care plan that the Apollo Sugar offers. The objective, says Bhalla, is to have referrals and also to have more nodes in the network. We are currently servicing 200,000 patients per annum today and hope to take this number to one million patients per annum in the three years and in terms of doctors in the network raise it, during this period, from 110 at the moment to 400.
To Business Today's question on what took time in scaling up and why the numbers are currently at 52 instead of around 100 that were expected initially, he says, the focus was on perfecting the backend. "A large part of the time in the last two years has been spent to perfect our product and we have invested a lot of money in our product and in our proposition beyond the clinic and the physical infrastructure that you see," he says. For instance, he says, this included, providing dedicated training to our call centre employees.
The call centres, he said, are staffed by dieticians and certified diabetes educators and nurses. Plus, we have also invested a lot on technology to make people follow the diet charts and on medication reminders." Within the country, he says, Telangana and Andhra, have the dubious distinction of being the capital of diabetes and therefore, of the 52, nine are in Telangana and two in Andhra and the plan is to increase these to 50 facilities in the next three years.
One big challenge that many in the industry point to is the huge shortage of genuine experts in treating diabetics. Apollo Sugar has set a minimum requirement of a diploma in this branch from a reputed institution. Today, he said, there is no one standard that is set on how we define a diabetologist. The process for what is called a diabetologist will ideally have to, in the next three to five years, come under the Medical Council of India jurisdiction wherein it is able to list out specific institutions that can authorize or certify diabetologists in the country.