LEADER BY DEFAULT, DOCTOR BY CHOICE Dr. Azad Moopen, Destination Kerala business magazine

Kochi: I am ushered into an aesthetically appointed office on the 33rd floor of Aspect Tower in Dubai’s Business Bay one fine morning in April 2017. From the windows one can see most of the bustling city getting ready at a feverish pace for Expo 2020. “Let us address the controversies towards the end of the session and start on a positive note,” says Dr. Azad Moopen, Chairman and Managing Director, Aster DM Healthcare, even before I have asked my first question. He is pegged #7 in the Forbes Middle East Top 100 Indian Business Leaders in the Arab World 2017.

Padma Shri awardee Dr. Moopen, aged 64, heads a healthcare conglomerate which runs a network of 307 operating facilities across nine countries which include 19 hospitals (Aster, Medcare), 95 clinics (Access) and 202 retail pharmacies (Aster). Aster DM Healthcare has ~20,000 employees, including 2161 doctors, as of May 2017. In India, Aster Medcity (Kochi), Aster MIMS (Kozhikode and Kottakal), DM WIMS (Wayanad), Aster CMI Hospital (Bengaluru), Aster Prime Hospital (Hyderabad), Aster Aadhar Hospital (Kolhapur) and Aster Ramesh Hospitals (Guntur and Vijayawada) complete the network.

He can aptly be called Kerala’s answer to Apollo Hospitals’ Prathap C Reddy. From a clinic setup in Dubai 30 years ago, Dr. Azad Moopen has come a long way to lead a healthcare conglomerate spread over different countries. But even as he has put on the garb of a business leader, he seldom belies the physician in him, underscoring the need to strike a balance between profit and principles. Here, in a candid conversation with Destination Kerala, this truly global Malayali touches upon every aspect of the institution he has built and his journey


I start by asking him how the industry has changed in the last three decades? What are the major transformational shifts that he sees? Dr. Moopen, after completing medical education in India, started his career as a teacher (Kozhikode Medical College), a job he performed for five years. It’s been 30 years since he moved to the UAE and started a single-physician clinic. “One major change is the move from public to private healthcare. Government healthcare facilities have not improved over the years,” feels Dr. Moopen. “The primary health centres, taluk hospitals and district-level hospitals have not improved much. But today, you have modern hospitals in the private sector providing secondary to quaternary care. This is true in Kerala, India and in the GCC region.”

There are 25 private hospitals today in Dubai. In 1987 when the first Aster clinic was being set up, there were just four government hospitals and not a single private hospital. Even today, there are only five government hospitals there. “This means the government is slowly getting out and the private industry is coming into the sector in the UAE,” asserts Dr. Moopen.“This is the most sensible thing to do.”

India spends about 2.5 per cent of its GDP on healthcare. Many of the developing countries (including some of its poorer cousins) incur 5-6 per cent and developed countries about 9-10 per cent. The US budgets 17 per cent. These numbers suggest that India has a long way to go to even reach the level of budgetary support required to address basic requirements. “In this 2.5 per cent at least 70 per cent is being contributed by the private sector and most of it is out-of-pocket expenses and not covered by medical insurance. So we indeed require a lot of government spending in the area of insurance as this can ensure that more people get access to quality healthcare irrespective of their financial background,” adds Dr. Moopen. Industry research reports that 80 per cent of lifetime medical expenses of a person is incurred in the last 20 per cent of his/her life. Also, incidence of lifestyle diseases has increased in the last decade.

“I have also witnessed tremendous improvement in patient care due to advancements in technology,” continues Dr. Moopen. “Nowadays, the number of people dying of infectious diseases has drastically reduced due to advanced antibiotics and immunization. Modern medicine has to be credited for this.” Life expectancy was 52 in Kerala and 40 in India in the 80s. Now in Kerala it is above 80 while in India it is 72. All these point to India needing a lot more healthcare facilities, wider insurance coverage and many more healthcare practitioners.

As modern medicine advanced, cost structures have changed. For middle income and BPL (Below Poverty Line) families, it has become difficult to access quality healthcare today. Hence, insurance coverage by the government is very critical. “The government, instead of building more hospitals or infrastructure should invest that money in insurance and provide coverage to the BPL population. Let people go to any hospital they prefer to get treatment. This open market competition will improve even existing government hospitals. We also need dedicated support from the government to establish private healthcare facilities,” he says.


Aster DM Healthcare’s organisational transformation was kick started with the onboarding of private equity (PE) partners 10 years ago. “It was the first external validation of our business model,” reminisces Dr. Moopen with a smile as he goes on to term as the happiest moment in his entrepreneurial journey. India Value Fund Advisors (IVFA), now christened True North, picked up five per cent stake in FY 2007-08 at a valuation of $100 million. Both partners were quite small at that time.

After five years, the second PE partner joined. At that time the valuation was $400 million. Its enterprise valuation ascertained now as part of the ongoing IPO proceedings is $2billion-plus. “From $100 million to $2 billion which is 20x growth over a period of just seven years has been remarkable and a matter of great joy for me,” says the founder. “IVFA and other PEs have contributed a lot to this success, not to forget the Aster DM family of employees and partners.”

Aster DM Healthcare is celebrating 30 glorious years of its existence. In the last three decades, by any modest estimation, the healthcare behemoth would have cared for 100 million-plus patients. 18 million patients are served today in a year. When I prod him to predict the future, he says affirmatively that he does not want to visualise something and leave behind a baggage for the people who will actually be running the next 30 years “because I am sure I will not be around for another 30 years! So, maybe, I will visualise for the next 10. Even in that, I maybe around in an active role for say five years as Group CEO or CMD.”

A comprehensive succession planning programme is already in place. In 2012, the company had done an offsite strategy session anchored by world renowned business consultant Ram Charan, which helped it establish and streamline succession planning across the organisation. In the last five years Aster DM has done that diligently. Today, there is visibility for second and third-level successors with each leader delivering a critical function. Aster DM has a COO and functional heads for areas like Corporate Governance, IT, HR and M&C reporting to the CMD. The organisation has six SBUs, each headed by a CEO – Aster – Hospitals & Clinics, Medcare – Hospitals & Clinics, Aster – Pharmacy & Retail, Aster Medcity, Aster MIMS and Aster CMI.

“We do not yet have a CEO for the India market. Some CEOs report to me. The CEOs of individual hospitals report to the Group-level CEO for Hospitals and Clinics SBU,” explains Dr. Moopen. Aster DM has a large pool of exceptionally good talent, some of its founders and the senior leadership team have already been groomed and others are in the process of being groomed. Dr. Moopen tells me that for his organisation (like Vineet Nayar’s HCL) it has always been ‘employees first; customers second’. “We really believe in that as we fully realise its importance.”


Dr. Azad Moopen is blessed with three daughters. The eldest daughter Alisha, after completing her BBA degree from the University of Michigan, Chartered Accountancy programme from the UK and seven years with EY in New Castle, is now Executive Director & CEO of the Hospitals and Clinics SBU in the GCC region. The second daughter, Ziham, is in to education and not involved in the healthcare business. The third is Zeba and she has just joined the business after her medical graduation. “She completed her MBBS degree at Manipal as we did not have our medical college then,” says a proud father. DM WIMS runs a medical college, a nursing college and a pharmacy college in Wayanad, one of the most backward districts in Kerala. It is the first medical college hospital in India to be set up in a rural area.

The interview was interrupted only once by a call from the Sharjah Ruler’s Court for discussing the inauguration time of the new 115-bed Medcare Hospital, Sharjah. (The healthcare facility was inaugurated in May 2017). So I take a cue and ask Dr. Moopen about his leadership style because I felt it is quite hands-off.

“I have been quite successful in delegating and not interfering but I am certainly monitoring. We have over 300 establishments, so micro managing is anyway not possible.” He reaffirms that he is certainly not like Warren Buffet who writes only one letter every year to the CEOs! “Dr. Moopen is a visionary with sharp business acumen, loads of empathy and a great sense of timing. As an institution builder his leadership style is truly inspirational and he engages us with full domain expertise, says Dr. Harish Pillai, Cluster Head – Kerala and CEO, Aster Medcity Kochi who has known Dr. Moopen personally for the last 15 years.

“I am lucky to find good people,” concurs Dr. Moopen. “Identifying capable people and empowering them is my best skill. I fully agree with management guru Tom Peters who said: leaders don’t create followers; they create more leaders.”


I bring his attention to the contentious issue of profits and principles in private healthcare and question him on where should the compass lie. He says that at Aster DM he wants to always drive a perfect balance – a combination of world-class clinical model (like Mayo) and a sustainable corporate business entity satisfying investors. He is emphatic Aster does not want to be either one only.

“Recently, when my youngest daughter returned after her medical degree programme, she was in a dilemma whether to work for us or study further. I told her to come here and be with us for a few months. The plan was to get her to do a rotation in every department and also spent 15 days with me. After her rota, she told me that she is very happy to realise Aster has grown tremendously in the last seven years since she had left for her studies. She drew my attention to the fact that when she sat in my meetings, my team was only discussing numbers, and not outcomes or patients. Something we were passionately discussing seven years ago in such meetings.” Dr. Moopen admits it came as a rude shock and kept him awake for many nights.

In the healthcare industry, profit should be a byproduct and not the primary motive is a reasonable expectation from society. “This is what we say at Aster, too, but we were slipping away from that. I looked around and saw non-doctors (including Alisha) around me; mostly finance professionals. In the last one year, deliberately I have put more clinicians in top jobs at Aster DM Healthcare, to realign our thinking and mindset,” says Dr. Moopen. “Unknowingly, we had drifted.” Dr. Zeba is now with the company and can serve as that much-needed balancing force as Aster DM races forward.


In that strategy session in 2012, Aster DM had put out a vision document for 2025 divided into three terms of four years each. The first term will finish in 2017; then 2021 and 2025. There were 25 people in the room, including the PE partners, divided into three teams. Charan asked them to come out with a blue print and all three groups, more or less arrived at the same priorities. “In 2025, all the three teams said, we will be one of the top 10 healthcare companies in the world by way of turnover, profits and spread. We will have a turnover of $6 billion by then,” recollects Dr. Azad Moopen. Aster just crossed the $1 billion mark. In 2017 it is on track as far as meeting revenue projection is concerned. The exponential flywheel effect has to take place now. It will take lesser time now to cross the next billion and then the next.


Aster has huge investments in Kerala – hospitals in Kozhikode, Kochi, Kottakkal and Wayanad. About 10,000-plus people are employed at Aster facilities in the State. “I was shocked when I heard it – every year, apart from the investments that we make and tax that we pay, we pay out Rs. 400 crore as salary!” In a district like Wayanad, where employment opportunities are rare, Aster DM employs 1,200 people across its hospital and teaching institutions. There is a huge opportunity in Kerala in the healthcare sector as the State has qualified Malayali doctors and nurses to run hospitals, and local patients believe in their skills.

“I felt too sad recently. Few days ago, someone sent me a paper cutting of the Times of India. It was an advertisement released by the Government of Gujarat inviting entrepreneurs to invest in healthcare in the State,” informs Dr. Moopen. “Gujarat is offering all kinds of sops but even now, unfortunately in Kerala, whether it is a private medical college or hospital, the government is not very supportive.”

He feels that discouraging private investment in healthcare or medical education is not the right way to protect and preserve government investments in these areas. “We have been in Kerala for 15 years now, and we have never had any major issue. There may have been variance in the degree of support or collaboration, but otherwise, we have had no challenges,” says Dr. Moopen.

The price of private healthcare is high because it is world class, argues the physician-turned-entrepreneur. That quality comes at a premium is not rocket science and this is not what should be discussed. Industry players say the government can stop investing in infrastructure and spend that on insurance instead of advising entrepreneurs in the healthcare sector to reduce cost because that is simply not feasible. “We are not operating at 30-40 per cent margin. Most of us operate on a 10 per cent margin and have debt to service. The government is able to invest in healthcare and still offers it at a highly subsidised rate because the taxpayer is funding it!” retorts Dr. Moopen.

“We have been in Kerala for 15 years now, and we have never had any major issue. There may have been variance in the degree of support or collaboration, but otherwise, we have had no challenges,” says Dr. Azad Moopen.

A cursory glance at the aviation sector in India will offer the answers. Since the quality of India’s national carrier is what it is, people fly private airlines. “Quality is the only means of survival today in the global marketplace. I strongly feel our government medical colleges will improve if their survival in the market is challenged by world-class private medical colleges”.


Aster DM has been in the news for its plans to hit the market. Their IPO timeline had to be postponed in order to comply with SEBI guidelines and adjust overseas revenue owing to GCC market conditions. Explains Dr. Moopen: “There was a cash flow issue in one of our key markets, the Kingdom of Saudi Arabia (KSA). In KSA, the healthcare market is predominantly driven by government-funded patients. We had to receive $180 million from the government and this was getting very delayed due to the economic situation in the GCC region. So our bankers advised us that if we go to the bourses with high receivables, we may not secure the response we truly deserve. Hence, we decided to postpone the IPO”.

Aster DM has received $40 million recently from the Saudi Government and the remaining is expected before the end of the year. The company will refile the DRHP (Draft Red Herring Prospectus) within the next three months and have the IPO completed within 6 to 12 months. There will be a little write down – initially, the valuation was $2.2 billion, but now it will be in the range of $1.8 – $2 billion. The PE players who have 35 per cent will not exit. Aster DM is diluting only the minimum mandatory requirement of 10 per cent. There was a proposal to list in London, but now the company has decided to do it in India. The bankers have been identified, too – Kotak Mahindra, Bank of America-Merrill Lynch and Axis Bank.

The IPO proceeds will primarily go towards fuelling further growth. Three new hospitals are in the pipeline in the GCC region. Aster also has major expansion plans in Kerala and across other Indian states. In June 2016, Aster DM had announced multiple investments of around Rs. 600 crore in Kerala in various projects over a period of three years. This included a greenfield 350-bed super-specialty hospital in Thiruvananthapuram, a 200-bed multi-specialty hospital in Kannur and a 250-bed super-specialty hospital in Kozhikode. Taking the proposed expansion at Aster into account, the various projects will add over 1500 beds to the group’s existing capacity and about 4000 jobs in the State.

India has always been a key priority for Aster DM, with the company already having 8 of its hospitals in five of the country’s states, offering 1840 functional beds. Aster DM had earlier raised nearly Rs. 1376 crore from PE funds for its India growth plan. In August 2014, the company had acquired 51 per cent stake in Hyderabad-based 200-bed Prime Hospitals. In September 2014, Aster DM acquired operational and management rights of the 75-bed Cauvery Medical Centre (CMC) in Bengaluru and expanded it to a 550-bed Aster CMI Hospital. It has picked up 51 per cent stake in Ramesh Hospitals which has multi-specialty tertiary care facilities in Vijayawada and Guntur. Today the installed bed capacity across India locations stands at 3822 with 2836 operational beds.

Expansion plans are massive in India as the country offers huge potential for investments in quality healthcare institutions. Aster DM is certainly looking at Mumbai and other places, and actively pursuing acquisition opportunities.


I move to another area that is challenging traditional revenue models in the healthcare space – Digital. Driving digital business transformation at Aster DM is his KPI this year, Dr. Moopen tells me. He fixes one every year and works diligently to achieve it. “It is certain now that in the next decade the way people access medical care will drastically change especially in the wearables and telemedicine areas. So, if we are not ahead of the game, we will become like Nokia and Kodak”.

3D printing and Artificial Intelligence are already transforming healthcare, and opening up immense possibilities. Why would a patient need a doctor to analyse an X-ray or CT or MRI? It is something a machine can do much better. This technology revolution is something Aster DM is embracing with delight.

In a first-of-its-kind initiative, at the new Medcare Hospital, Sharjah the company will enable patients to receive a follow-up doctor consultation from the comfort of their home with the help of a simple, user-friendly tele-medicine technology called ‘eSTISHARATI’. Post-operative patients can benefit from this facility and interact via video conferencing with their treating doctor within seven days from the date of their surgical procedure.

The Aster Emergency App launched in Kozhikode in May 2017 envisions a leap in emergency care by combining health and technology. It provides a real-time interface between the patient in emergency and a GPS-enabled Aster ‘Responder’. This brings help to the needy even before the ambulance arrives providing Basic Life Support (BLS). The first hour after an incident is called the ‘Golden Hour’ which is the most critical time when intervention will give best results.“Anybody who wants to take it to their city can and we are willing to share the technology free as part of our CSR activity,” informs Dr. Moopen. Last year, Aster DM started the first online pharmacy in the GCC region, www.asteronline.com, offering OTC drugs, nutritional products, personal care products and the like.


“Frankly, it does not mean much”, says the billionaire physician. “Most of the days I come out of my home without any money in the pocket. It is normal for me to go somewhere, pick up something and realise I am not carrying cash! So money should be a servant and not me its servant.” God has been kind and Dr. Moopen has created wealth beyond his imagination. But he made a decision some time back that 20 per cent of his wealth will go to charity and is keeping that promise. The fifth heir to his wealth is the under privileged people. Over the years, various activities aimed at giving back to society in India, the Middle East and Africa have been launched. Such initiatives are now channelled through Aster DM Foundation and Dr. Moopen Family Foundation, both of which operate under the Dr. Moopen’s Foundation umbrella.

I conclude by asking him how possible it is for Aster DM to have a non-family CEO? “Very much possible. Why not?” counters Dr. Azad Moopen. “Whether it is Alisha or someone else from outside the family, the Board is open to the idea. Qualification and capability will be the criteria. Family will anyway be represented on the Board. So this is not at all a worry or constrain.”

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