Thiruvananthapuram: Twenty years ago, when Dr. M I Sahadulla and his brother E M Najeeb conceived the idea of a super specialty hospital in Thiruvananthapuram, 55 banks and financial institutions declined them loan raising questions about its financial viability. In March 2017, when Destination Kerala met Dr. Sahadulla and Najeeb for the interview, Kerala Institute for Medical Sciences (KIMS) had already zeroed in on its new private equity (PE) partner, who will invest $200 million in the Group. Consequently, Ascent Capital Private Limited and OrbiMed Advisors, who acquired stakes in KIMS in 2012, will move out.

Private equity investor True North (formerly India Value Fund Advisors); a consortium of TPG Capital Management and Singapore sovereign fund Temasek Holdings, and PremjiInvest, investment entity of tech billionaire Azim Premji, were the front runners to acquire the stakes.

“We have selected one investor and will make the announcement once we enter into a formal agreement with the investing firm. For the time being, we cannot divulge more details,” said Dr. Sahadulla, Chairman and MD of KIMS Healthcare Group.

They followed entirely different paths to reach the zenith of their chosen fields. Yet, siblings, Dr. M I Sahadulla and E M Najeeb, were on the same page always when it came to building institutions together in the healthcare sector and beyond, to the admiration of peers. Today, even as they stand as business leaders striding many sectors, they still contribute immensely to the business domain of Kerala and thereby, to society at large without resting on their laurels. Here the duo finds time to share their story with Destination Kerala

At present, KIMS Group has around 1800 beds across all its facilities in Kerala and Telangana, and 200 beds in its hospitals in the GCC. “We would like to increase this to 3000 beds by 2020, before we go public. Currently, we have close to 2750 employees at KIMS Hospital, Thiruvananthapuram. We have 600-plus doctors and around 5000 employees across our facilities in Kerala. Within three years, we will add 2000 more employees in Kerala and the total staff strength of the Group across India and the GCC will touch 10,000,” adds Najeeb, Executive Director of KIMS Healthcare Group and Chairman, Air Travel Enterprises (ATE) Group (ATE is one among 650 investors in KIMS).

Besides KIMS Thiruvananthapuram, which was launched in 2002, the Group’s other hospitals in Kerala are KIMS Al Shifa, Perinthalmanna, KIMS Kochi, KIMS Kottayam, KIMS Kollam and KIMS Wellness Clinic in Kochi and Thiruvananthapuram. A leading healthcare provider in the GCC, KIMS has three hospitals in the region – Royal Bahrain Hospital (RBH), KIMS Oman Hospital (KOH) and KIMS Dammam – apart from seven medical centres spread across Bahrain, Qatar, Saudi Arabia and Dubai.

Excerpts from the interview

How did the idea of a super specialty hospital in Thiruvananthapuram take shape?

Sahadulla: After spending 25 years in Saudi Arabia I wanted to return to Kerala and settle here just like many NRKs. I had a green card to go to the US or immigrate to Canada. However, my strong bonding with my family members here made me return. Thus I decided to set up a hospital here to continue my practice. I was joined in my endeavour by famous cardiologist Dr. G Vijayaraghavan (A Padma Shri recipient, who is the Vice Chairman and Founder Director of KIMS), who incidentally was a friend of mine, apart from my family members. And we have managed to assemble several investors, including doctors and friends. At present, we have 650 investors of which 20 are from the family. Our success in finding investors had made us confident to go for a super specialty hospital in Thiruvananthapuram which was visualized as one which gave premium to quality of service. The year was 1996.

Najeeb: It was a herculean task. We did all the hard work for four years. While Dr. Sahadulla and his team planned the hospital, I arranged land, funding and supervised construction along with my brother E Iqbal, who is now working as Director of Support Services. We made presentations before dozens of financial institutions. Banks refused us loans saying that this project would not be viable. We overcame that, raised funds and completed the hospital in time. KIMS was officially launched in 2002 and we managed to register profit in the first year itself.

KIMS is a pioneer of Medical Value Travel (MVT) in Kerala. In your view, how far has the State been able to tap its potential?

Sahadulla: Certainly, Kerala is on the global map of MVT destinations. However, despite having all the positive factors – highly qualified professionals, advanced facilities, quality care at affordable cost and a known tourism destination tag, Kerala is yet to enter the big league. According to a Grant Thornton study, India’s MVT market is expected to grow from its current size of $3 billion to around $8 billion by 2020. Currently, the study says, Kerala’s share of India’s MVT revenue is only 4.5 per cent. While Tamil Nadu and Mumbai enjoy a share of 20 per cent each, Delhi has a share of close to 15 per cent. I strongly feel that bureaucrats have to understand the potential, and together we have to strive to achieve at least 10 per cent share.

Trust me, it is easily achievable if we do the basic promotional activities. Any foreign patient coming to Kerala spends about $7000 to $8000 on a single visit. Part of this payment will be made in the hospital for treatment while the rest is spent outside. Our Government should realise that MVT can bring money into the State. At least three to four jobs are created when an MVT visitor is here. There should be a well-thought-out strategy from the part of the Government to promote MVT, and constant interaction between public as well as private sectors. At KIMS Thiruvananthapuram alone, we attend to more than 6000 foreign patients a year. We would like to maintain a growth rate of 20 per cent every year.

Najeeb: Kerala Medical Value Travel Society (KMVTS) will create a space for healthcare providers to come together to exhibit their products and services to the rest of the world. This can be done effectively only with the support of the Government, which will have to come forward as a facilitator, marketing the State’s healthcare products and services in whichever way they can.

Sahadulla: MVT will not happen for the simple reason that Kerala has several advantages. There should be an organised way of doing it. Right from issuing visas to ensuring proper follow-up treatment, we have to make sure that no inconvenience is caused to foreign patients. Airport staff, immigration officers, hoteliers, doctors and hospital staff should be given special training so that the foreign patients feel comfortable. If hospitals get considerable amount of revenue through MVT, their targets could be easily met. They can spend much more on CSR activities, thereby helping the local patients. And, if the Government feels like levying a tax on MVT, it can do that and can even utilize that revenue for insurance purposes.

In your view, what should be the Government’s MVT strategy?

Najeeb: In Kerala, there is already a revolution underway in the field of quality healthcare. In order to increase the quality of healthcare standards, the government should facilitate public-private partnerships which are quite often practiced in Western countries. The Government, with the support of information and communication technology, can activate a network wherein the patients can search and find out the best and affordable treatment facilities available in Kerala. Such a consolidated effort will definitely revitalize the synergy between the health and tourism industries, transforming the State into a medical tourism hub. National or international accreditation can be the criteria for shortlisting hospitals that can be promoted for MVT. KIMS will be in the forefront if the Government moves ahead with such initiatives which, in turn, will be a great boon to the patients seeking medical treatment in the State.

Sahadulla: Our Royal Bahrain Hospital has been declared a model hospital by the Bahrain Government. Look at the way the Government functions over there. They came, inspected the facility and when they found that we maintain high standards of quality, they declared the facility as a model for the country. Our Governments should also be bold enough to take such initiatives.

Can you explain our credentials when it comes to positive clinical outcomes? What are we doing to market this?

Sahadulla: In India, benchmarking remains difficult as nobody tells the truth. Here, hospitals are publicising clinical outcomes in whichever manner they like. For instance, hospitals here claim 100 per cent success rate in cardiac procedures. If someone makes such a claim in any of the Western countries, they will think that the person is crazy, simply because it is not possible. Nobody is questioning such claims here. If you do one or two cases and say you are 100 per cent successful, it is possible. Otherwise, when you do complex cases, there will be fatalities. This fact has to be accepted by every medical healthcare provider. Hence, it is of utmost importance that hospitals should be bonafide, truthful and genuine in their claims.

In my view, either the Medical Council of India (MCI) or Quality Council of India (QCI) should insist that healthcare providers publish all clinical outcomes. For instance, all NABH-accredited hospitals should be directed to publish the infection rate in ventilator or catheter-associated procedures. Hospitals in the Western countries publish such data. If the rate is found below acceptable levels, the Government or concerned agencies would examine and find out what went wrong. Depending upon that, they will act to fix it. Likewise, we should also benchmark hospitals based on statistics. At KIMS, we do liver transplants. We have achieved 85 to 90 per cent success rate and that is one of the best in the world. We regularly publish clinical outcomes in international journals and compare our results with foreign hospitals. We have found that in many places, we are at par with them. In some places, we have scope for improvement.

As a leading tertiary care hospital, how equipped is KIMS to cater to the needs of international patients?

Najeeb: KIMS has a dedicated international patients’ relations team for extending personalised care and hassle-free service to the foreign nationals seeking specialised treatment. A dedicated in-house travel desk has been set up to manage all the travel needs of the patients by the ATE Group. In addition, KIMS has its own currency exchange desk. Once the treatment is completed, the patients as well as those accompanying them can opt for guided tours in and around the city.

ATE and Great India Tour Company (GITC), two sister concerns, are in the travel and tourism industry for the last 40 years. This vast expertise along with quality healthcare service and delivery have helped KIMS to become the pioneer in MVT in Kerala. KIMS is one among the first four hospitals accredited by the NABH in India. We have also received accreditations from the Australian Council of Healthcare Standards International (ACHSI) and National Accreditation Board for Laboratories (NABL). Our Blood Bank is also a NABH-accredited facility.

How is digital technology transforming your business?

Najeeb: At KIMS, healthcare delivery is driven by IT ever since its inception. Today, we are one of the foremost hospitals in India which is effectively using digital technology for healthcare delivery. Our OP wing became paperless about five years ago and the IP section will become paperless very soon. All the patient records are going to be in digital form. If a patient wants it in print, we will provide. Otherwise, they can log on to the official website of KIMS and download the same in whichever format they require from anywhere in the world.

Travel and tourism business has evolved drastically due to digital revolution. Fortunately for us, due to our decades-old relationship with clients and associates, the turnover has not come down. There is growth every year. But our profitability has been affected. The dip in profit is not entirely caused by the emergence of online business models. One factor is the drastic reduction in the commission offered by airlines. So, we have to collect a service charge from the clients and stay in the business by providing value-added services. ATE is now creating its own travel portal, Travel Dost, which will be for the B2B segment. As of now, we have no plans to venture into the B2C segment. It involves large-scale operations and requires huge investments. In today’s scenario, online travel portals are run hoping high valuations. Actually, they are hardly making any profit.

What are the expansion plans for KIMS and ATE Group?

Sahadulla: Several projects are in the pipeline and the plan is to complete all of them with the PE funding before we go for an IPO in 2020. KIMS Thiruvananthapuram, the flagship hospital, will add 150 beds. The new block will be a high-end facility with a business class lounge meant exclusively for foreign patients. We are waiting for some clearances. Once started, the project will be over within two years. The super specialty hospital project at Thonnackal is awaiting clearance from the Union Ministry of Environment and Forests. It is based on the concept called ‘slow medicine’ (A conservative medical approach to both acute and chronic care). There will be primary specialties but the focus will be on rehabilitation, end-of-life care for terminally ill patients, de-addiction therapy and psychiatric treatments. Apart from land value, the 250-bed facility will cost around Rs. 150 crore. We have increased the number of beds in Kollam to 200 from 70. The new block will start functioning soon. In Kottayam, our facility has 90 beds. We have plans to increase the bed strength to 200. While in Kochi, we are looking for land towards the northern side of Ernakulam for setting up a new facility. We are planning to set up a limited specialty hospital there. The renovation of the old block at KIMS Al Shifa Hospital in Perinthalmanna also is going on.

Outside Kerala, we are seriously looking at expanding our footprint to Tamil Nadu. We will begin by setting up a 200-bed facility in Nagercoil. We have bought five acres of land and the project is pending with the Government for final approval. We are also considering setting up hospitals at Kanyakumari and Tirunelveli in the near future. In Hyderabad, currently, we have 125-bed KIMS Bibi Cancer Centre, the first cancer hospital to come up in the city. We will soon expand the facility. In the GCC, we are coming out with another hospital in Bahrain, a Mother and Child Hospital in Oman and another hospital at Dukkam in Salalah. However, KIMS, Thiruvananthapuram will remain the mother unit of the Group.

Najeeb: As far as ATE Group is concerned, we have already diversified into various sectors – travel, hospitality, healthcare, advertising, cargo operations, event management and tourism management consultancy. Now, we do not want to look at new areas since it will not be easy to manage. Our focus is to consolidate existing businesses. Travel will be the growth driver. It is a core business involving various services like leisure, cargo, PR, consultancy and the like.

We also made a foray into the hospitality sector recently, albeit in a limited manner. We now operate The Capital Hotels and Resorts, Thiruvananthapuram, and Tea Valley Resort in Munnar under our hospitality arm, Green Gateway Leisure Limited. Yet another venture at Bekal will be commissioned soon.

Certainly, hospitality was one of the major avenues we could have seriously tried to enter decades ago. Frankly speaking, I do not know why I did not do it then. I thought it would be better to continue in the existing business. In fact, if I had gone for major investments, we could have become a hospitality giant now. (chuckles)

How do you view the allegations about exorbitant pricing by private hospitals?

Sahadulla: Private healthcare providers have to make profit because a lot of people are involved as investors. Both the Government as well as the public have to open up their mind and accept the fact that private healthcare sector is essential for the State. There is no point in comparing the cost of treatment in Government and private hospitals. People pay directly from the pocket in private hospitals while in Government hospitals the public are bearing the expenses, but in the form of taxes. Definitely, we are offering better healthcare delivery and patients are looked after with utmost concern. And, of course, quality always has a cost factor attached to it. Everyone forgets the fact that private healthcare providers are generating lot of employment opportunities. Unlike tech companies, where only a cream of the population gets employed, we offer a range of jobs – right from housekeepers to doctors. A good cross section of society is earning a livelihood through it.

No doubt, the ultimate goal should be to ensure inclusive growth in healthcare. We can work together for the masses provided the Government is willing to join hands with us without prejudice or bias. There should be an open-minded handshake and willingness to understand each other. It will be good for the public and the cost of healthcare delivery will come down. We can assist the Government in improving healthcare delivery through public healthcare facilities. For instance, take the case of Regional Cancer Centre in Thiruvananthapuram. There is a long list of patients waiting for their turn to undergo procedures and diagnosis. This happens at a time when those things can be done at the same cost at an outside facility which may provide better quality service. Government should devise a mechanism wherein public hospitals can refer patients to private healthcare providers. Government can insist that the cost should be below a certain level. Patients would also be happy as they get quality treatment at affordable costs.

Today, all over the world, protocol-based treatments are relied on for better and standardised outcomes. These treatment protocols are evolved by comparing the outcomes of the same treatment offered by different doctors taking into account various aspects like the time of recovery, the cost of treatment and the treatment procedure. For instance, take the case of dengue fever. If you want to standardise the outcome, there should be a protocol. Unfortunately, the public healthcare sector here lacks such mechanisms. Private sector can support the public healthcare providers to introduce such systems.

There is enormous scope for cooperation in fields like medical education, quality control, infection control and transplants. The students of Government Medical Colleges should be able to benefit from interaction with experienced doctors in private hospitals who are exposed to advanced medical technologies.

Najeeb: At KIMS, we are trying to package the procedures and provide comprehensive service at affordable cost. Even if the cost exceeds, we will not charge additional amount unless an unexpected complication arises. We have achieved this in many areas. Except in critical care, we are going to have fixed cost for all the normal procedures. Critical care involves consumables, expertise and procedures and hence, it is impossible to set a fixed cost. We always try to limit our cost as much as possible. Neither we jack up the price nor do any hanky-panky. At the same time, the hospital also has to survive. We have to pay the doctors and also buy consumables. The Government has to intervene consistently and cut the cost of medicines and consumables so that the patients can have quality treatment at affordable cost.

Being a very sensitive and demanding field, only those hospitals which offer quality and cost-effective healthcare delivery will survive. Ensuring comprehensive healthcare delivery by coordinating professionals from various streams is a challenge for any institute. KIMS has achieved that teamwork under the leadership of Dr. Sahadulla. It has a healthcare delivery system which is on par with the leading healthcare providers in the world.

What does money mean to you?

Najeeb: We have never worked for money alone. By God’s grace we have been able to enjoy a reasonably good living. I believe each life has a purpose and that purpose should be to serve the public. That is why I am in the service sector and I feel I should continue in it till my last breath. We have always tried to help people who have approached us in whatever possible manner.

Sahadulla: Money has never been a consideration for doing things. I wanted to have a very transparent and different kind of hospital without giving commission or engaging in other unethical practices. We got advice from everyone that this will not happen in Kerala. All that we wanted was to try and make it happen.

Dr. M I Sahadulla

A post-graduate in General Medicine from the Trivandrum Medical College, a Fellow of Royal College of Physicians, Ireland & London and an MBA from University of Hull, UK, Dr. M I Sahadulla has worked with Saudi Aramco (Arabian American Oil company) Hospitals in Saudi Arabia in various capacities for 25 years.

Dr. Sahadulla, an expert in internal medicine, feels that the real crisis in medicine today is about the loss of the fundamental human relationship between the doctor and the patient. “Years ago, treatment was very personal-oriented. Now, things have changed manifold with healthcare romancing digital technology. I have doubt whether the same kind of personal relationship with patients will be maintained or not,” he says.

Certainly, healthcare delivery has improved, and as a result, longevity of people has been enhanced, he says. “But the trust in the doctor has suffered a dent. If I say that you should undergo a particular treatment, you would definitely take a second opinion. The value system has degenerated. Those days, I have not heard about doctors’ accepting commissions for taking X-rays or MRIs,” he says. “At the time CT scan was introduced, only HoDs had the authority to advise it. Today, patients themselves go for it. A doctor who knows that it is unnecessary may endorse it just to convince the patients and to be on the safer side,”

Dr. Sahadulla is now penning a book describing his experiences in the profession. “Once a young girl was brought to KIMS with multiple fractures after a road accident. Chances of her survival were minimal. But, at our next anniversary celebrations, she danced for us on the stage. We once conducted even a marriage at the hospital of a girl whose father was in the advance stage of lung cancer. There are plenty of incidents like that, touching one’s life…,” the veteran physician concludes with a lump in his throat. A recipient of prestigious national and international honours, he has initiated KIMS Charitable Trust to support the needy and poor patients as part of CSR activities.

E M Najeeb

One day in 1976, while young Najeeb was pursing his diploma in journalism at Trivandrum Press Club, one of his neighbours gave him a flight ticket for validation. Hailing from Murukkumpuzha in the outskirts of Thiruvananthapuram, Najeeb used to travel every day to the city. Obtaining an airline ticket was a cumbersome procedure those days but Najeeb managed to do it as one of his close friends was with Indian Airlines. Later in the evening, at a tea shop which was their routine hangout, his friend mooted the idea of opening a travel agency as a part-time job as lot of people in and around his native village were working in the Gulf.

“I hardly had any money to spend on tea and snacks during the evening get-together. I always felt bad as someone was paying for me. I was badly in need of some pocket money. For me, the idea seemed exciting and I started a small office in Murukkumpuzha. I used to get Rs. 25 to Rs. 50 as commission per ticket. We used to spend all the money on tea and snacks in the evening,” Najeeb goes down memory lane.

“I felt good about the business since I started meeting a lot of people. They used to sit with me and share their experiences in the Gulf. Those stories were an eye- opener to me. Those days it was really tough to run a business but I made up my mind to become an entrepreneur. Everyone was trying to get a job in the Gulf. I felt that come what may, I should find a living here since I was born here. That was my theory,” he recollects.

In another two months, Najeeb opened an office in the city. As business boomed, he opened an office at Perumathura near the city. “In 1979, we decided to go for IATA approval. After much struggle, we got the approval in 1981. Remaining in the business without much earnings was a major challenge for me. But, in three years time, we became the number one agency in South India,” Najeeb says. He was instrumental in constituting Kerala Travel Mart Society (KTM), an umbrella organisation of tourism service providers aimed at promoting Kerala Tourism.