From a small nursing home to a Rs 1,000 Cr hospital chain - how a middle class family built a thriving healthcare group

Hailing from a modest family, G Surender Rao worked at a private hospital in Iran for eight years. After picking up the nuances of running a hospital, he returned to his state of Telangana, and set up a small medical practice in 1989.

Surender joined hands with his entrepreneur brothers Ravender Rao and Devender Rao to name his practice Yashoda Hospitals, and incorporated it under the brothers’ larger Yashoda Group.

Through the 90s, at a time when the middle income group in India had few good quality healthcare providers, Yashoda Hospitals set out on a mission to serve both domestic and international patients.

Abhinav Gorukanti, son of Surender and Director of Yashoda Hospitals, says

“The chain is named after my grandmother, the three founders’ mother, who guided them to recognise their social responsibility. What started as a small nursing home of approximately 50 beds in Somajiguda has now grown into a leading hospital chain in Hyderabad.”

He adds that the chain sees Rs 1,000 crore annual turnover, and employs a workforce of close to 10,000 people.

In an exclusive interview with SMBStory, Abhinav, who is also the CEO of Yashoda Group’s generic formulation injectables wing Anthea Pharma, shares the story of the family-run hospital chain.

Edited excerpts from the interview:

SMBStory [SMBS]: How did your father come together with his brothers to co-found Yashoda Hospitals?

Abhinav Gorukanti [AG]: The journey of the Yashoda Group started in 1978, with Ravender Rao’s Yashoda Vacuum Industries, followed by a photocopy shop in 1984, and later, Yashoda Special Metals in 1985.

The Yashoda Hospitals Group was established in 1989. Later, we ventured into Malakpet to build a 200-bedded hospital, and subsequently our third hospital in Secunderabad. During this period we expanded and enhanced the services and bed capacity at all the three units, totalling approximately 2000 beds in the city.

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SMBS: What were the initial challenges of running a hospital? How were they solved?

AG: Some initial challenges of running the hospitals were to recruit the right talent. For example, managing critical care neuro patients was extremely challenging, since there were hardly any neurosurgeons to treat them.

In 2005-2006, while we attempted to attract top doctors in the country, we were not a small brand, but we weren’t a big brand either. So it was tough to rope in talent from within the country. We were fortunate though, that a few of our doctors trusted and believed in our vision.

Over the years, we focussed on hiring highly skilled doctors who are among the finest in the world, and who provide individualised care for each patient with accurate diagnosis and treatment modalities.

Advanced medical equipment were not easily available in the early years, so we ensured to invest heavily to equip our team with state-of-the-art infrastructure and advanced technology integrated equipment.

SMBS: How did the hospital diversify into providing various healthcare services?

AG: Back in the day, most private players had a single speciality focus, like cardiology, orthopaedics, gastroenterology. However, we strongly believed that once a patient walks into our hospital, they should have all the resources available i.e., get services and treatment for practically all their medical needs, pertaining to any speciality.

Our family business wanted to provide comprehensive services under one roof, since an ailing person cannot be expected to move around from one hospital to another.

Today, we offer sophisticated diagnostic and therapeutic care in virtually every specialty and subspecialty of medicine and surgery.

SMBS: Other leading hospital chains are also providing comprehensive services these days. What makes Yashoda Hospitals stand out?

AG: The first thing that sets us apart is that we are 100 percent privately-owned and funded by ourselves. This allows us to take ambitious, long-term bets and build high-end clinical programs. This is possible because we don’t have external dependency for funding.

Second, we are hyper-focussed on the twin Telugu states of Telangana and Andhra Pradesh. This is unlike other multi-city chains which are spread across geographies with key decision makers in other cities.

At Yashoda Hospitals, we have the ability to achieve economies of scale with units located within a one hour distance from each other and all 10,000 employees are located in the same city. This has helped us grow significantly in the region.

We were also the first in India to implement the 3-Tesla Intra Operative MRI and the 4D gated RapidArc technology for the treatment of tumours. We have treated over 20,000 cancer patients with the latest in precision radiation, RapidArc IMRT therapy.

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SMBS: What are your patient profiles and how do you reach them?

AG: We cater to all patient profiles and demographics being a tertiary healthcare provider. Our strength is in our ability to cater to the masses for complex and even basic medical requirements.

We also focus on delivering services not only in Hyderabad, but also outside the region. We have outreach centres in remote locations, and our coverage extends to international markets catering to patients from over 40 countries who travel to India seeking medical treatment.

SMBS: The initial months of the COVID-19 pandemic was a tough time for hospitals across the country. What was it like for Yashoda Hospitals?

AG: The 100-day crisis during the lockdown was extremely difficult. It stretched our capabilities beyond comprehension. Our staff was overworked, exhausted, and away from families, they exerted themselves both physically and emotionally.

But somehow, this crisis brought us all closer, and we overcame the challenges together as a family, to tide through the crisis.

Globally, the protocols were constantly changing, and our understanding of COVID-19 also developed over time for timely medical interventions. We created a Master Protocol Document for COVID-19 preparedness, in collaboration with global healthcare experts in America, Europe and China, which was maintained and constantly updated. We made this protocol document public for other hospitals also to learn and be prepared for the situation.  

As we are recognised as one of the best hospitals in India for pulmonology, there was a huge inflow of COVID-19 patients in our facilities, particularly critical care patients. All our patients were managed in the hospitals or via means of telemedicine, and we stayed connected with them at all times.

We are glad that it worked out well for our patients, and we are happy that patient outcomes were on par with international standards. We discharged over 10,000 patients. Around 150 ventilators out of the 220 operational in the state of Telangana were from our group.

This success can be attributed to triaging, which is to categorise patients and decide their order of treatment.

Business wise, the costs went up significantly, and revenues dipped by more than 50 percent in the initial phase. We increased our diagnostics capabilities in testing facilities for COVID-19 and gene sequencing. Our investments in pulmonology Intensive care units helped us salvage the situation.

SMBS: Having come out of this crisis, what lies ahead for Yashoda Hospitals?

AG: Our expansion plans include an upcoming project in HITEC City, which will be located in the heart of Hyderabad’s tech hub. It is expected to be one of the largest medical facilities in India, and is spread over 20 lakhs sqft with a capacity of close to 2000 beds.

Expansion to other parts of the country will only happen with the intent to have a significant presence in one location or city, with multiple hospitals.

We are also diversifying into the pharmaceutical industry with Anthea Pharma.

SMBS: What is Anthea Pharma all about?

AG: As we look to venture into pharmaceuticals, Anthea Pharma is focussed on generic formulation injectables of the highest quality for the US market. It is a high-technology company which involves R&D and precise manufacturing of the generic injectables.

Since superior manufacturing is critical for success in this space, we have been looking to not only match, but also exceed regulatory standards.

We aim to get our product into the US market by 2023, and also cater to the Indian, UK and EU markets.