Indian hospital chain Fortis Healthcare plans to reduce costs

21 August 2019 (Last Updated August 22nd, 2019 08:16)

India-based hospital chain Fortis Healthcare intends to reduce costs by a fifth to revamp itself after regulatory authorities found it was defrauded of millions of dollars by its previous owners.

Fortis Healthcare intends to reduce costs by a fifth to revamp itself after Indian regulatory authorities found the hospital chain was defrauded of millions of dollars by its previous owners.

Fortis is planning to reduce expenditures, right from renegotiating salaries of doctors to deploying software to cut down employee count, reported Bloomberg.

Over the next two years, it aims to cut down expenses by $31m. Also in the offing is a fresh capital expenditure of $84m.

These plans come after Ashutosh Raghuvanshi took over as CEO in March.

Regulatory authorities had found that Fortis’ former owners, Malvinder Singh and Shivinder Singh had defrauded the firm of Rs4bn ($56m).

This led to a longer than expected bidding for Fortis. Malaysia-based IHH Healthcare  secured the bid, following which it injected Rs40bn for the stability of the business.

The firm plans to sell or close down under performing facilities and exit contracts related to managing other hospitals.

It is also looking at divesting non-core assets such as its interest in a hospital of Sri Lanka.

The hospital chain is also deploying software to replace people who carry out tasks such as collection and review of  patients who stay at the hospitals.

Raghuvanshi was quoted by the publication as saying: “What Fortis needs to reaffirm is its quality health-care positioning. We need to bring it back to where it was.” 

The company plans to consider providing  more affordable offerings in a few years that would complement its premium positioning.