Mumbai: Apollo Hospitals is seeking to get a contract for managing a 300-bed super-speciality hospital in Kuala Lumpur by the Petronas group. Apollo is now getting into the hospital management business and is exploring possibilities of overseas contracts.

It is leveraging its brand equity to expand its network through managed hospitals that does not entail capital outflow. Hospital management is a fee-based activity that boosts margins, the return on average capital employed (RoCE) and growth.

The firm plans to adopt an asset light strategy such as hospital consultancy and pharmacy business to enhance growth. The company officials had announced this at a conference organised by the ICICI Securities in the US.

Apollo Hospitals has also sought certification from Joint Commissions on Accreditation of Healthcare Organisations (JCAHO), a premier US-based healthcare rating agency, to upgrade its quality standards. This is the first group in the country to have applied for this rating mechanism.

This rating will help Apollo attract more international patients. In addition to hospitals and the consultancy division, the company has many synergistic revenue streams - pharmacy, health insurance, medical business process outsourcing, telemedicine and education.

With more than 6,000 beds under its umbrella, Apollo is the largest private healthcare provider in Asia and also the most integrated healthcare service provider. Its business model straddles all aspects of healthcare.

The demand for quality healthcare is stronger than ever, the officials said. The bed-to-population ratio in India is among the lowest in Asia, and the world. Demand enablers are rapidly ageing population, stressful lifestyles, heightened awareness of health needs, opening up of insurance (currently, only 0.35 per cent of India's population has private insurance) and rising disposable incomes, they added.

Apollo is well placed to capitalise on growth in healthcare services. The company's hospital occupancy rates are expected to improve going forward. The company has been adding aggressively to its capacities with nearly 850 beds added in the last three years and this led to a fall in occupancy rates from 85-90 per cent in the late nineties to 68 per cent in FY03.

Over the next couple of years, Apollo plans to focus on improving its occupancy rates through domestic and international marketing initiatives and will not be adding bed capacity.