Transforming a small pathology lab into a $1bn business

Ameera Shah, managing director of India’s Metropolis Healthcare, returned to her Mumbai home in mid-March, after giving birth to her first child. Her plan was to spend a month “without worrying about Metropolis,” the nationwide chain of diagnostics laboratories she had built over the previous two decades.

But coronavirus cases had begun emerging in India, where authorities had done little to prepare for the pandemic. Ms Shah was soon ensnared in calls with government officials about testing policies.

On March 23, New Delhi permitted six private pathology labs — including Metropolis — to start testing for the pathogen. A day later, Prime Minister Narendra Modi abruptly imposed a nationwide coronavirus lockdown. The 40-year-old entrepreneur — who by then had retreated with her husband, parents and baby to a house in the countryside — found herself at the centre of a maelstrom, trying to help her company ramp up its coronavirus testing capacity amid the severe disruption of the lockdown.

For years, she fought the stereotype [in India] that young women lacked seriousness, as she transformed her father’s small pathology lab into a listed company valued at nearly $1bn on the Bombay Stock Exchange. Now, she knew it was critical to manage her own emotions and keep a cool head to face the onslaught.

“Thankfully we know how to operate in chaos,” she recalls in a Zoom call from her rural bolt-hole. “We were in a crisis situation. But the minute you get anxious and overwhelmed, that is the beginning of the downhill slope.”

Testing in Dharavi, Mumbai Testing in Dharavi, Mumbai © Francis Mascarenhas/Reuters

Testing kits, reagents, protective equipment and other necessary items were in short supply, leading to fierce competition by rival labs for stocks. “It was a struggle,” she says. “Ten of us were all fighting for the same chemicals and nobody was giving consistent supply.”

The suspension of public transport — and aggressive police enforcement of lockdown — made it tough even for critical health workers such as lab technicians and phlebotomists to report for duty. Metropolis organised buses and hotels for key staff who feared their families would be exposed to the virus if they went home.

Government testing policy was another frustration. While New Delhi urged private labs to scale up, state and city governments had their own testing criteria — often highly restrictive. “You can imagine the chaos — you are trying to do testing across India, and each municipal corporation makes its own rules,” she says.

Metropolis — which has 125 clinical laboratories and more than 2,700 collection points across India — ended up squeezed between patients clamouring for tests and local authorities less than eager for the confirmed caseload in their jurisdictions to rise.

“Testing was clearly the most fundamental right and the most fundamental need of citizens at the time,” Ms Shah says. “The idea that we were not being allowed to test to our full capacity was very shocking and very scary at the time.”

While battling government authorities over access to testing, Ms Shah also had to devise ways for Metropolis to withstand the financial shock of lockdown, as nearly all medical services — except emergency care and coronavirus treatment — were suspended, a huge blow to private healthcare businesses.

Metropolis’ revenues were previously growing 15 per cent year on year. But in the second half of March, revenues contracted 45 per cent from 2019, as demand collapsed and labs struggled to reopen. April’s revenues were just 40 per cent of what was previously expected.

“There was so much panic,” Ms Shah says. “We were all trying to figure out ‘can we pay salaries? Can we survive?’ I was working with my team to figure how do we maintain strength from a balance sheet perspective. We didn’t want to fire anybody nor have anybody take pay cuts.”

Negotiating rent reductions with landlords and trimming other expenses helped reduce costs. But shocks kept coming as India’s Supreme Court in April ordered private labs to make coronavirus tests available to the public free of charge — leading to fresh anxiety.

“It seemed that private labs like our small company must pay for millions of Indians [to be tested] because it is a noble profession,” she says. 

Ms Shah worked “day and night” with lawyers to prepare arguments against the order. It was finally rescinded, though many states have since imposed price caps on coronavirus tests. By late April, the strain had left Ms Shah “bone-tired”.

Metropolis’ roots lie in the in-house lab of a small 10-bed private nursing home run by Ms Shah’s grandfather, a prominent Mumbai doctor. In the late 1980s, her pathologist father, Dr Sushil Shah, moved the lab into bigger, independent premises.

A decontamination vehicle sprays a road in Chennai A decontamination vehicle sprays a road in Chennai © P Ravikumar/Reuters

As a girl, Ms Shah spent several summer holidays helping at her father’s lab — writing receipts, answering phones, even cleaning patients’ arms before technicians drew blood samples. It was while studying business at the University of Texas at Austin that she saw the potential for modernising India’s loosely regulated diagnostics industry, then mostly made of independent local businesses.

Returning to India in 2001, Ms Shah travelled across the country to acquire or form partnerships with the most reputable diagnostics laboratories run by highly trained, well-known pathologists. Her vision was to bring them together under the Metropolis brand — to which her father’s eponymous clinic had also been renamed.

Potential partners were often initially sceptical, given her youth and lack of experience or medical training. “If you are young or female it was like a deadly combination that you probably had no clue what you were doing,” she recalls.

But she leveraged her father’s reputation, and the frequent but mistaken assumption that he was driving the project. As the network grew, Metropolis also built a high-tech centralised laboratory in Mumbai to carry out the most sophisticated tests of samples collected from across India.

“My personality was always quite bold,” she says. “I didn’t think twice about knocking on doors of people I didn’t know and getting something moving.”

Through the pandemic, Ms Shah says she has had unstinting family support while juggling the responsibilities of a new baby and a company under severe pressure. “My parents, my husband all rallied around me to help in as many ways possible, as they knew how stressful it was,” she says.

Three questions for Ameera Shah

Who is your leadership hero?

Muhammad Yunus [the Bangladeshi microfinance pioneer]

If you were not a CEO/leader, what would you be doing?

Building philanthropic institutions.

What was the first leadership lesson you learnt?

Courage is not the absence of fear. It is the ability to face your fears and keep moving ahead.

Compared with April, Ms Shah says she now feels better, after deciding not to battle every government policy she finds illogical or overly restrictive. Meanwhile, some jurisdictions, including Mumbai are also relaxing controls on testing.

“I just decided there is no point fighting the system — if things are going to be decided a certain way,” she says. “We continue to do the best we can in the situation as it is. We can’t influence everything around us.”

For all the turbulence of recent months, she also believes the pandemic will boost national laboratory chains such as Metropolis, as anxious consumers seek reputable names with stringent quality standards for healthcare needs.

“I believe this will be a catalyst for consolidation in our industry,” she says. “People expecting a certain level of safety and hygiene prefer to go to large branded names versus going to a local player.”