Interview | Our focus is on using technology to get better outcomes for cancer patients, says CTSI South Asia group CEO

Jagprag Singh Gujral started his career as a doctor with the Indian Armed Forces and later transitioned from being a clinician to a corporate turnaround specialist. Since 2018, he has been associated with Cancer Treatment Services International, a holding company of businesses including American Oncology Institute, Citizens Specialty Hospital, AMPATH - a diagnostic chain focused on specialty pathology, and CTSI Oncology Solutions.

In this chat with Moneycontrol, he spoke about the company’s financial model, expansion plans, and efforts to make quality cancer care affordable in India. Edited excerpts:

Affordability of cancer treatment is a big issue in a country like India. How does your group, catering primarily to cancer patients, serve people?

This is not only applicable for cancer, right? This is applicable for almost all chronic diseases, considering the per capita income of our country and the fact that most of the expenditure towards healthcare is borne in cash and is out-of-pocket expenditure since not much of the population is insured. It’s fair to assume that any sort of chronic disease treatment is going to cause an excess burden on the patient. At CTSI, what we do is bring in efficiencies and most of our hospitals subscribe to the Ayushman Bharat-Pradhan Mantri Jan Aarogya Yojana scheme.

In oncology, the most important thing is to provide benchmark treatment. And when I say benchmark treatment, the benchmark is the western word. And that's the important thing because if you go wrong in outcomes in oncology, you're playing with life here. It's not a viral fever or a bacterial fever that if you happen to take the wrong antibiotic, you have time to correct yourself, depending on how this regimen works. In oncology, it's very technology intensive. But CTSI has proven that it's not actually the cost which is the determinant by virtue of the number of patients that we serve – we've gone down to efficiency metrics that translate into outcomes.

What government interventions can help improve accessibility and affordability of healthcare?

Introducing Ayushman Bharat-PMJAY on a national footing has really proved very beneficial for patients. And kudos to the government for being very serious about these types of insurance platforms, public insurance platforms for the public at large. So, there's this great work that has happened on that end by the government of India. We'll be exploring jointly with the government how we enable access in tier-two and tier-three cities, which are historically deprived of a lot of technology and a lot of expensive capital expenditure investments. So that's definitely an area that we are very actively engaging with state governments as well as the Central government to aid how we can provide or how we can bridge this access and penetration across these underpenetrated areas.

You are already present in many cities in India despite being a relatively new company. How has the journey been so far?

We have 16 facilities that go by the brand of American Oncology Institute all around South Asia. Today, we are one of the youngest cancer hospital chains of the region. Our vintage dates back to as little as six years. And in these six years, we've been able to establish ourselves as the leading oncology hospital chain of the geography in terms of the volume of patients that we serve and, of course, translating into the financial metric that we have.

Many private hospitals complain that rates offered through Ayushman Bharat-PMJAY are very low and don’t join it. Are such rates sustainable for a hospital like yours?

Most of our facilities are three years old. And if we are able to sustain ourselves, I don't think there's a reason to believe that it's only got to do with the price points being set by a public insurance initiative. It's got to do more with how hospital chains and healthcare drive efficiencies and introduce newer technologies, which take care of a lot of earlier fixed costs etc., to render best-in-class treatment.

What are the biggest challenges of operating in India? What changes would you want to see for private entities to work better?

There are some inherent challenges that come by virtue of being present in an emerging country or an emerging market. We've got infrastructure challenges, we've got logistic challenges and, however good the intent may be, there is only that much penetration that becomes physically possible in two, three years.

On the other end, you've got defined healthcare challenges in our country in which, of course, like we just spoke about, one of them happens to be low private insurance penetration. This is a major determinant and a major difference between western, developed healthcare markets and our country… And that's one of the greater challenges that I see, which is not specific to the tier-two and tier-three cities. But it becomes strikingly clear in tier-one cities.

Is finding specialised manpower for oncology services a big challenge?

So it won't be fair to say that that's not a pressing need. It is, but companies have to gradually evolve to solve this problem. We can't be harping around a problem that has existed for eternity. And the solution to this problem is not churning out X number of doctors or X number of technicians or X number of nurses only. The solution also is how you utilise this manpower to levels of efficiency. And what we do differently in CTSI is that we are a centrally run hospital chain.

We have the maximum number of clinical trials happening in oncology, which means the maximum number of research is happening, which means the adoption to the research has to be even quicker, which means that what you were looking for as the gold standard for yesterday, is going to change tomorrow. So even if you've got very trained manpower, the essence is about how you continually upgrade the skillsets of that manpower. And at CTSI, because we've got a centralised model, we’ve been able to drive in a lot of efficiencies and a lot of quality metrics, by having centralised teams working remotely for patient access and care across our hospitals.

The field of cancer treatment is changing rapidly but it can be very expensive. How will you make it accessible for a large number of patients?

So we are a part of Varian Medical Systems, which is the largest oncology focused medical technology company, and it has its own advantages. One of them being that we don't go slow on technology adoption. So most of our facilities offer multidisciplinary oncology, which means they cater to all branches of oncology, whether medical, surgical, radiation, or diagnostic.

Though most of these are very expensive, we're able to introduce these technologies faster than anybody else in areas where people would still be on Excel sheets trying to find feasibility.

Are you looking to raise funds for the company?

We're not trying to raise any investment, we have a very healthy balance sheet, we are not leveraged. And there's enough capacity for us to take on leverage if required. So we are not actively looking at any external investment coming into the company. But having said that, we are one of the few healthcare companies that has provided a very successful multibagger exit to a private equity firm in the shortest possible time of two years. So we had a private equity firm in our company that we provided an exit to before we became a part of Varian Medical Systems.

And our brand has been able to create some ripples, we are receiving a lot of inbound interest coming in, not only from pure-play investors, but also from strategics who want to partner in order to increase their reach in oncology.

What we are looking at definitely is forging partnerships with other hospitals to aid them in expanding their oncology reach and in expanding their services in the societies that they serve.

So there will be a lot of partnerships with other hospitals in small towns?

We typically go with a partnership model where we allow any multispecialty hospital to run the multi-specialties, the multiple specialties that they've bought. And we run oncology for them – medical oncology, radiation oncology and diagnostics, specifically focused on radiological diagnostics like positron- emission-tomography (PET) scan. And we do this on a revenue-sharing model or on a lease-rental model.

That's the typical model that we've introduced into tier-two and tier-three cities in this country. All of our partners have derived great benefit because they are able to introduce technologies that they otherwise could not afford, or would not have been most feasible for them to introduce in their geographies, but at the same time provide outcomes to patients far superior to what they would have been able to provide had they rendered oncology services on their own.