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'It is a good business proposition'

india Updated: Jul 02, 2008 22:16 IST

Dr Arvind Lal, the chairman and managing director of Dr Lal Path Labs, which claims to be the oldest lab in India with the largest number of tests and the most patients passing through each day, at an average of 9,000. Eight of its 30 labs are accredited to the exacting College of American Pathologists -- the highest number of any chain in India. Lal proffers some sage advice to those thinking of starting up on their own:

If someone wants to start a pathology lab today, what are the niche areas you would advise him to cater to?
There is no niche market in this field. For a pathologist who has just finished his or her studies, it would be best to start doing routine tests, catering to general practioners and hospitals.

What are the risks involved in starting a pathology lab?
In India, the biggest risk in starting a pathology lab is the kickback system: the labs work on a referral system, where the physician sends patients to the lab but expects money in return. This is an unethical practice, but it is prevalent in most cities. Patients are being taken for a ride as almost half the money they pay goes to physicians.

But is it a good business proposition?
In light of the fact that 70 per cent of medical treatments depend on pathology reports, it is a good business proposition. Also, 25 to 30 per cent of revenue in a hospital is generated from pathology tests. But this works only when the pathology industry works as it should. This is not the case in India. I know of many doctors who have left India because they are disgusted with this. There should be a law, and the government should crack down on the kickback system. This has also given rise to unprofessionally run labs that constitute over 50 per cent of the labs in the country.

What does it take to become a world-class pathology laboratory?
You must have a wide range of tests and up-to-date technology.