SRL eyes govt hospitals to set up diagnostics centres2 min read . Updated: 23 Jan 2014, 12:44 AM IST
SRL wants to expand without investing too much into the business in public-private partnership
New Delhi: SRL Ltd, which runs the largest chain of pathological testing centres in India, wants to set up labs in government hospitals as it looks to expand without investing too much money into the business.
“We have for the first time looked at the public-private partnership model as part of the next phase of growth, and are in talks with various state governments to set up and manage diagnostics labs in public sector hospitals," chief executive Sanjeev Vashishta said in an interview.
The firm, owned by brothers Malvinder Singh and Shivinder Singh, is aggressively wooing lab contracts in state hospitals and secured a large contract from Himachal Pradesh in October to build and run diagnostics laboratories in 24 hospitals in the state.
“This is mainly an asset-light model and the advantage is that we don’t have to set up the whole infrastructure and, hence, no requirement of heavy investments," Vashishta said. “So we can offer the standard quality of tests at the government rates."
SRL is in talks with the governments of Assam, Andhra Pradesh, Tamil Nadu and Kerala, he said.
The firm operates a network of 286 labs and some 5,000 sample collection centres across the country. It offers more than 3,500 types of medical tests and handles at least 80,000 cases every day in the private diagnostics space, Vashishta said.
SRL will continue growing in the private diagnostics business and also plans to establish a presence in overseas markets, including West Asia, Southeast Asia, Kenya and Nigeria, Vashishta said.
Experts say SRL’s move could start off a larger trend in the Indian healthcare sector.
“This trend will continue and will grow large in the coming years" as both public and private healthcare providers have realized neither side could meet the healthcare needs of the country entirely by themselves, said Muralidharan Nair, partner, life sciences and healthcare, at EY India, a consultancy earlier known as Ernst and Young.
“So a collaboration between the two is a must in this scenario and that is going to be model in the country for long."
A similar development was seen in the tripartite tie-up between the government of Maharashtra, the US-based medical devices maker GE Healthcare and Ensocare group to set up advanced diagnostic facilities in state government hospitals. Under an agreement signed in May, a GE-Ensocare consortium will set up and operate diagnostic labs in 22 district and women’s hospitals run by the state government.
Such collaborations are important in India, where the government remains the largest healthcare provider and a huge infrastructure is already in place, said Nair.
The diagnostic services sector in India is largely unorganized and contributes a fraction of the overall healthcare spend of close to $70 billion, as estimated by EY and KPMG India, another consultancy firm.
The total size of just two main segments of diagnostics services—pathology and radiology—is estimated to be close to $4 billion, EY’s Nair said.
SRL, which in 2010 acquired Piramal Diagnostics Ltd, then the fourth largest diagnostics chain, remains the largest among the organized firms in the sector. Other large companies include Dr Lal Pathlabs and Metropolis India.