Presented at Lounge47.in on 1st February 2014Copyright © Mr. Dr. V Renganathan

A Novice’s Experiment With Affordable Healthcare

V. RenganathanCo-Founder, Vaatsalya Healthcare Solutions

Presented at Lounge47.in on 1st February 2014Copyright © Mr. Dr. V Renganathan

Enabling access to affordable healthcare

Vaatsalya Healthcare Solutions

Presented at Lounge47.in on 1st February 2014Copyright © Mr. Dr. V Renganathan

Year HC Expenditure ($)2008 45 B2012 79 B2017 158 B

• Annual Growth rate: 15%• Increasing income• Insurance availability• Availability of good hospitals• Availability of highly skilled doctors

Indian Healthcare Expenditures

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Healthcare Services Distribution

Indian Population: 30% Urban & 70% Rural

Hospitals: Mostly Urban & Tertiary Care

Demand: Mostly Primary & Secondary care

Semi-urban & Rural areas lack healthcare facilities & when available may not be of good quality

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About Vaatsalya• Mission: Create a network of for-profit

hospitals providing customer-oriented, ethical, affordable, and efficient healthcare services in semi-urban and rural areas

• Number of hospital units operational: 15• “Accessible, affordable, human-touch, &

respect”

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Vaatsalya Business Model• Location: Tier II and III cities with 200K

population• 50-100 bed hospitals• Specialties: General medicine, Gynecology,

Pediatrics, and General Surgery• Offer 70% of needed healthcare services• Other Specialties: Nephrology, Urology,

Pediatric Surgery

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Founders/Management Team

Dr. Ashwin Naik, Co-Founder & CEO• Physician, scientist, and entrepreneur

- VP of Business Development at Triesta Sciences

- Human Genome Project, Celera Genomics, USA

Dr. Veerendra Hiremath, Co-Founder & VP, Projects• Physician & Hospital admin - Vivus Group Hospitals, and Asia Heart Foundation

Presented at Lounge47.in on 1st February 2014Copyright © Mr. Dr. V Renganathan

Dr. Renganathan V , Co-Founder & VP Alliances

- Scientist turned manager- Asso. Prof, Biochemistry at Oregon Graduate Institute, Portland, USA

- 40 publications & 6 PhDs- Program manager, Intel, Portland, Oregon, USA

- PhD from Indian Inst. Of Science, Bangalore

- MBA from Portland State University, Portland, Oregon, USA•.

Founders/Management Team

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Vaatsalya Hospitals (12)Karnataka

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Vaatsalya Hospitals (4) – A.P.

Rajmundhry

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Facilities

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Vaatsalya Hospital, HassanBharathi Healthcare Complex, Opp to Sandalkote

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Vaatsalya Hospital, HubliIMZ Plaza, Next to New Bus Stand

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Vaatsalya Hospital, MandyaPragathi Healthcare Complex, G. H. Road

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Reception, Shimoga

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Neonatal ICU, Gadag

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NICU – Vizianagaram, AP

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ICU, Gulbarga

NICU, Gulbarga

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Top 100 startups – TATA NEN Hottest Startup 2008 Sankalp Award for Social Enterprise 2009 Rashtriya Samman Puraskar 2009 Frost & Sullivan India, Excellence In Healthcare Award 2010 India Fast Growth 25 (# 5 Ranking) 2010 Ashwin Naik selected as a global Young Leader by WEF (2012) Porter Prize for Value Based Healthcare (2012)

Awards & Accolades

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March 2010

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14 March 2010

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July 2009

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Affordability in a Hospital Context

• Affordability depends on target segment• Target segment for Vaatsalya: Rs 36 – 120K/year• BPL income: 17K a year• Our customer earns 2x – 7x that of a BPL family• Vaatsalya is affordable by APL segments

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Understand Healthcare Service Costs

Service Price = Total cost of operations + Provider profits

Total Cost = Fixed Cost + Variable Cost + Indirect Cost

Fixed costs: Professionals, Mortgage/Rent, DepreciationVariable costs: Medicines, ConsumablesIndirect Costs: Water, electricity, Corporate expenses

(Expected) Provider Profits α Investments

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Vaatsalya Approach to Cost Control & Profit Optimization

Strategy Impact

Don’t own but lease building Low investment requirement

Buy only reliable Indian made equipment

Lowered capital expenditure

Negotiate volume discount Lowered capital & variable expenditure

No costly equipment (eg; MRI) Lowered capital expenditure

Doctors on revenue share Lower fixed expenditure

Control corporate expenditure Lower operational expenses

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User Challenge to Provider•

1. Offer good quality accessible services at

affordable prices

2. That offer should be available wherever I move in my community – That means scalable

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Cost as low as possible

High Quality

Easy Accessibility

User Expectations: Healthcare Service

User’s Street

Home Hospital

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What is Quality?User yardsticks of Quality• Cure rate or how fast I got cured• Clinical Diagnosis Skills• Hospital Cleanliness

A quality provider follows recommended guidelines of diagnosis & treatment

What are the impact of quality measures on cost?

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Accessibility to Services• Physical as well as services accessibility

• Physical accessibility means hospital in the neighborhood itself or if transportation is available easy access through roads

How does accessibility impact costs ?

Closer the healthcare facility to the user higher the costs

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Urban Health Issues

Communicable/Infectious diseases Non-Communicable

Prevention Acute Care Prevention Chronic Care

•Long-term•No significant role for Provider

•Short-term•Predominant role for Provider• OP & IP care

•Long-term•Significant role for Provider• OP care• Diagnostics

•Long-term•Significant role for Provider• OP & IP• Diagnostics

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Urban Healthcare Delivery Model

• Low-cost clinics• 1-2 docs, ANM, Nurses• Clinics with OP care• Diagnostics• Medical management• Diet/exercise consultation• OP chronic care treatments

Peri-urban Spaces

Full fledged secondary care

hospitals with OP & IP care