Apollo Hospitals belong to the healthcare industry in India, having more than 70 hospitals in the country. The healthcare organization is also managing 4500 pharmacies aiming to fulfil the needs of the public. The following PESTLE analysis of Apollo Hospitals examines the macro-environment in India and its influence on Hospital and their business decisions.
Political Factors
The political instability creates an uncertain environment which would put healthcare providers on high alert in case of a violent conflict outbreak. The hospitals have to provide first aid and treatment to the people affected by the violence. It also effects the way the business operations are managed as intense violence can adversely affect Apollo Hospital and can lead to damages.
Insurance policies aligned with the government regulations are also a factor that affect the profit of the hospital. Tax laws and policies related to providing access to healthcare to the public carries implications for the company. The Indian government has initiated a health coverage scheme aiming to target 10 crore families from the marginalized segment of the society (Vyas, 2018).
The government would invest 5 lakh per family, which is a positive factor for Apollo Hospital in increasing its profit. Moreover, Indian government has made the decision to permit 100% FDI in the domain of the healthcare sector which has facilitated in the development of the healthcare company.
Economic Factors
The pandemic had a negative effect on the economic situation of India, reflected through the 6.6% contraction. The GDP growth also shows positive economic trends, although the growth is slower than expected. Nevertheless, the economic strength is a positive macro-environment factor for the company (Apollo Hospitals, 2022).
However, inflation and increases in the prices of commodities is exerting pressure on the expenditure of the households in the country. The operating expenses at the hospital also rise when the price increases as the energy bills, labor cost and price of medicine and other related aspects of the healthcare is effected by inflation.
Pandemic has also negatively affected the economic environment for Apollo Hospitals. The company has reported a loss of ₹226.24 crore in 2020 due to the COVID outbreak in the country. The pharmacy segment gained benefit from the pandemic, increasing the number of consumers, including the online medical consultation.
Social Factors
The overall state of public health, mortality rate and population growth rate affect the consumer demand for healthcare services. Urban development is also a key factor in the growth of Apollo Hospitals, specifically the pharmacy segment has benefited from urban and semi-urban consumers.
Access to healthcare is also an important factor that influences the ability of the hospital staff to serve the patients. The increase in telemedicine has been boosted through government support, providing access of healthcare to those who are economically disadvantaged. Moreover, remote areas are being accessed through online consultation option.
Pandemic has increased the demand for healthcare services such as diagnostic services, pharmacy and hospital based care. A larger number of people have started using online pharmacies during the pandemic and social distancing helping in the development of digital presence.
People’s attitude towards healthcare workers creates risk for their safety. There have been cases where the attendants of the deceased patients have become violent towards hospital staff. One such example is from a patient who was brought to the hospital and passed away. The conflict resulted in 8 staff members being injured after the relatives of the patient instigated attack (Sinha & Joshi, 2021).
Technological Factors
The digital healthcare domain and telemedicine unit is one example of how the technology from the external environment has helped the hospital to expand its portfolio. The availability of technology has helped the management in moving beyond traditional health care system. The hybrid care model has been incorporated as a part of the service as well.
Healthcare technology and integration of up to date technology at the healthcare facilitates has helped the hospital to provide good quality services to the patients. The employees use electronic medical record (EMR) and personal health record (PHR). It allows them to make best decisions for the patients, considering their present condition and past history (Gupta, 2017).
Apollo Hospital is also using algorithm, analytics and artificial intelligence to provide the patients with high quality healthcare. Apollo Cardiovascular Disease Risk tool has been created out of the insights gained through analytics and AI, enabling the healthcare organization for better management of cardiovascular health of the patients.
In addition, AI and machine learning has allowed the healthcare providers to make more accurate decisions which have lowered the risk of medical mishap. For instance, the availability of interconnected data supported by cloud computing has helps the doctors to identify the suitable medicine and consider all aspects of the patient’s condition.
Legal Factors
Apollo Hospital is required to follow the different laws that have been developed in the context of the healthcare industry. A few examples of the legal regulations include National Medical Commission Act, The National Commission for Allied and Healthcare Professions Act, Ethical guidelines for Biomedical Research on Human Subjects etc.
These laws have been put in place to ensure that all patients get quality health care and the care providers do not engage in negligence or malpractices. Besides these legal aspects, the company also has to comply with the employment laws in India. The management is bound to follow the minimum wage guidelines, in addition to the other employment regulations.
Environmental Factors
The organization has taken some measures to increase its degree of sustainability. For example, the implementation of Green Purchase Policy (GPP) and use of stage IV fuel aims to reduce the harmful effect of operations. Moreover, the management is trying to engage in better management of natural resources.
The company has increased the focus on water and energy security and is incorporating the use of bio gas to adhere to the plan of using renewable energy sources. Apollo Hospital is also engaged in waste management by categorizing the waste into recyclable and hazardous waste and handling them accordingly.
Conclusion
Apollo Hospital is operating in a highly favorable environment as the political, economic and social factors have supported the company in achieving growth. There have been some negative circumstances however the management has been able to cope with these changes. The technological upgrade has significantly benefited the company in dealing with uncertainty.
References
- Apollo Hospitals (2022). Annual Report. Retrieved from: https://www.apollohospitals.com/apollo_pdf/AHEL-AR22-Full-Report-Final-(20220802).pdf
- Gupta, S. (2017). Apollo Hospitals: focusing on connected health to provide improved service. Mint. Retrieved from: https://www.livemint.com/Technology/Eotl1SIMzkhHdkwAb9U42J/Apollo-Hospitals-focusing-on-connected-health-to-provide-im.html
- Sinha, J., & Joshi, M. (2021). Delhi: Anger spills into violence at Apollo hospital. Indian Express. Retrieved from: https://indianexpress.com/article/cities/delhi/delhi-anger-spills-into-violence-at-apollo-hospital-7291724/
- Vyas, J. (2018). Government’s health cover plan a healthy idea for Apollo also. The Economic Times. Retrieved from: https://economictimes.indiatimes.com/markets/stocks/news/governments-health-cover-plan-a-healthy-idea-for-apollo-also/articleshow/63196226.cms?from=mdr