Leelawati Group Case Study

Leelawati group is the largest healthcare group in India, founded in 1977 by Dr. Ashok Leelawati chandar. It consists of 4 hospitals, 10 clinics and a medical institute where R & D work takes place. 40% of the revenue earned by the hospitals and clinics combined goes into the medical institute in the name of R & D expenditure. The 4 hospitals receive 47000 patients annually and the 10 clinics treat approximately 60000 patients annually. Leelawati group employ 800 physicians and scientists and 1500 hospital staff.
Healthcare industry in India is growing at a tremendous speed and other private healthcare groups are also emerging as fierce competitors by investing hugely in improving information technology and the standard of customer service.
Information like medical history of patients, diagnoses, medications, treatment plans, and dates of immunization, allergies, and images of radiology, and laboratory and test results will be collected and stored in one database. One of the key features of an EHR is that health information can be created and managed by authorized providers in a digital format capable of being shared with other providers across more than one health care organization. The basic purpose of EHRs is to share information with other health care providers and organizations – such as laboratories, specialists, medical imaging facilities, pharmacies, emergency facilities, and school and workplace clinics – so they contain information from all clinicians involved in a patient’s care. All the above information is accessible by both computer and mobile
100 crore rupees will be required for the changes to take place and another 20 crore rupees will be required for educating the staff about the use of technology. Considering the debt in the balance sheet of Leelawati group, 120 crore rupees seems a huge amount. Group is sitting on a cash pile of 30 crore rupees and the remaining 90 crore rupees needs to be financed from outside. This means more debt to come in the balance sheet. Although, the top management believes once this IT system is enabled the number of patients will increase and the market share of Leelawati group will increase as well and they also think this is an investment which will be recovered in next 3 years. Should the top management wait for some year to clear the existing debt and then go for this investment in IT or they should raise the capital from outside to undertake the changes right