To be or not to be a “Mall Hospital”

Prepared by Rakesh Godhwani, School of Meaningful Experiences

Archana Munshi, a 38-year-old doctor, working as the Head of Administration with PHF hospital in
Bangalore, stared at the email in front of her. The email was from a family friend, Ramesh Kini, who
had visited PHF hospital to get his mother treated for Dengue. The email said the following:

“Dear Archana,

Hope you are fine. I am writing to you to inform you about my experiences at PHF hospitals last
week. I had admitted my mom there for treatment for Dengue. Though my Mom is better now, the
entire experience was a nightmare. The room was run down, bed was uncomfortable, the room had
no AC or central air-conditioning. So, either it was unbearably hot or unbearably cold depending on
the time of the day. Coming to the hospital was agonizing because of lack of proper parking in the
area. The front desk is swarming with patients and looks worse than a railway platform. The staff is
overworked and unfriendly.

When I looked at my bill, your hospital charged me only 20% less than what Apollo or Manipal
Hospital would have charged me. So, it definitely is not a low-cost hospital that is promised on its
website and brochures.”

This was not the first time Archana had heard these complaints from patients and families of the
hospital. The hospital was run-down and needed a major overhaul of infrastructure very badly.
Archana had discussed this subject with the Chairman and founder of the hospital, Dr. Mohanlal,
who was now in his 70s.

Dr. Mohanlal had started this hospital in 1980s. He was the scion of the Gupta family who had large
businesses in textiles, sugar, and education and construction sectors. He himself was a qualified
surgeon from AIIMS. In 1980, this hospital building was one of the best as compared to the other
government hospitals around. He hired good doctors who had philanthropic intentions. His staff
were loyalists who had joined PHF in the 80s and had stood by him and the Gupta family. He himself
ran the show of the entire hospital till a debilitating heart attack forced him to retire in 2004. He
however became the chairman of the board and still involved actively in day-to-day operations of
the hospital.

Archana had joined as the head of administration in 2015. She was warned by her friends who were
familiar with the history of PHF that her predecessors did not survive here for more than a year.
They also told her that Dr. Mohanlal is known to be a miser and hates spending money. But she was
determined to make her mark. In her first meeting with the Chairman, he had said to her: “Archana,
we are not a mall hospital. I don’t care about the looks and the frills of the rooms or the reception.
1
This case has been prepared by Prof. Rakesh Godhwani for classroom discussion only.
https://some.education
But I do care for the low-cost treatment we give to the poor”. Archana argued that they no longer
cater to the poor at all. In fact, all the patients were from well-to-do families. They came to PHF
because of the convenience of being situated in one of the most populated localities of the city. The
data showed that 80% of the revenue came from patients who were urban and lived within 5 kms of
the hospital. The remaining 20% revenue came from patients from rural areas of poor socio-
economic background and slums within the city. The hospital was not really a low-cost hospital
anymore. The cost of manpower, medicines and the evils of insurance lobby had pushed the costs
up.

Archana had gone out on a limb to seek advice from an architect friend of hers. This friend worked in
an architecture firm that designed hospitals. The recent swanky Fortis Hospital was designed by
them. She asked him to give a rough estimate to refurbish the rooms, bathrooms, common areas
and reception. He came back and said that a basic refurbishing project of bathrooms, rooms, beds,
common areas and reception would cost them approximately INR 2 Crores. A central AC unit would
cost another INR 1 Crore.

Archana calls you up. She knows that you are doing a hot shot general management program in
healthcare from IIM Bangalore. She asks you the following:

“Can you help me make a pitch to Dr. Mohanlal? I need him to approve INR 3 Crores for this
project”

Work in groups of 5. Take 15 minutes to debate the question mentioned above and as a group,
prepare a recommendation. Apply the concepts you have learnt in this program – e.g., services
marketing, operations management, strategic thinking, cost benefit analysis and communication for
leaders. Feel free to make assumptions that make your argument more realistic.

Imagine that Archana has called you and your group and has asked one of you to present this
recommendation in front her. This is just a dry run. The actual presentation is scheduled in front of
Dr. Mohanlal next week. You have been given 5 minutes to present.

2
This case has been prepared by Prof. Rakesh Godhwani for classroom discussion only.
https://some.education