MGM Healthcare to set up South India-focused hospital chain

MGM Healthcare is planning to set up chain of hospitals across south India, starting from Chennai. MGM Group, which runs two medical teaching colleges in Puducherry and Chennai under trust model, will be investing around Rs 400 crore on the upcoming 400-bedded hospital. The hospital is spread over 3.50 lakh sq. ft. in the heart of Chennai at Nelson-Manickam road and will have 50 out-patient consultation rooms, 10 operating theaters, and more than 100 critical care beds. The new hospital will be part owned and part leased model.

The group is not limiting to one hospital, but has started work on another large hospital with 400-500 beds coming up near Velachery, one of the fast-growing suburbs of south Chennai. This hospital will entail a similar investment of over Rs 500 crore and will be entirely based on leased model. MGM expects the two upcoming hospitals in Chennai to take its bed capacity to 1000 in next two years.

The Chennai hospitals will act as the hub, around which the MGM plans to put up hospitals in other Tier-II and Tier-III cities and towns of Tamil Nadu and adjoining states in next 5 years. The two hospital projects in Chennai are self-funded. On breakeven, MGM director Prashanth Rajagopalan says that it typically takes 3-4 years to become EBITDA positive and 5 years to become PAT positive.

These are CapEx intense projects; only an established group having withholding capacity until the hospital becomes it can sustain itself. But to achieve break-even much faster, MGM is banking on leveraging technology. To keep a tab on operational expenditure of the new hospital, MGM has focused a lot on design thinking and automation.

The facilities will have platinum LEED certified green buildings, harnessing natural light and ventilation, in addition to using solar power. The upcoming hospitals will have digital ICUs where the patient’s vitals are constantly evaluated by computer-based algorithm on minute-by-minute basis, even predicting a stroke. The hospital will also use artificial intelligence in radiology departments to help read the reports. To help internal transport of material and reports – the hospital will be using pneumatic tube system.