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Corporate GovernanceEmerald Article: Enabling healthcare services for the rural and semi-urbansegments in India: when shared value meets the bottom of the pyramid

Mark Esposito, Amit Kapoor, Sandeep Goyal

Article information:

To cite this document: Mark Esposito, Amit Kapoor, Sandeep Goyal, (2012),"Enabling healthcare services for the rural and

emi-urban segments in India: when shared value meets the bottom of the pyramid", Corporate Governance, Vol. 12 Iss: 4 pp. 514 -33

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http://dx.doi.org/10.1108/14720701211267847

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Academic paper

Enabling healthcare services for the rural

and semi-urban segments in India:

when shared value meets the bottom ofthe pyramid

Mark Esposito, Amit Kapoor and Sandeep Goyal

Abstract

Purpose The access to high quality, a reliable and affordable basic healthcare service is one of the

key challenges facing the rural and semi-urban population lying at base of the pyramid (BoP) in India.

Realizing this as a social challenge and an economic opportunity (shared value), there has been an

emergence of healthcare service providers who have bundled entrepreneurial attitude and passion with

available scarce resources to design and implement cost-effective, reliable and scalable market

solutions for the BoP. The purpose of this research paper is to understand the underlying operating

principles of these self-sustainable business models aimed at providing healthcare services to the BoP

segment in India.

Design/methodology/approach The empirical context involves the use of case study research

methodology, where the source of data is published case studies and the company websites of four

healthcare organizations who have made a socio-economic difference in the lives of the rural and

semi-urban population lying at the BoP in India.

Findings The analysis and findings reflect the key operating principles for sustainable healthcare

business ventures at the BoP. These include focus on 4As (accessible, affordable, acceptable and

awareness), local engagement, local skills building, learning by experiment, flexible organizational

structure, dynamic leadership, technology integration and scalability.

Research limitations/implications This research study has focused mainly on the published case

studies as source of data.

Originality/value The intent is to understand and bring forth the learning and guiding principles,

which act as a catalyst for the future researchers and business ventures engaged in BoP context.

Keywords Base of the pyramid, Rural healthcare, Low income markets, Emerging markets,Shared value, Developing countries, Poverty

Paper type Research paper

1. Introduction

Prahalad and Hammond (2002) have described bottom of pyramid (BoP[1]) as both a

challenge as well as an opportunity for organizations. This is an opportunity to solve the

unique problems profitably and to develop breakthrough business models for sustainability

at BoP. This requires market based ecosystems and engagement of BoP segment across

the value-chain. Schumpeter (1934) advocated the role of entrepreneur (actor), technology

and innovation in bringing about an economic transformation for the organizations and

nations as a whole. How the entrepreneur assesses the environment and makes use of

environmental dynamics, actors, technology and innovation is what decides the

PAGE 514 j CORPORATE GOVERNANCE j VOL. 12 NO. 4 2012, pp. 514-533, Q Emerald Group Publishing Limited, ISSN 1472-0701 DOI 10.1108/14720701211267847

Mark Esposito is an

Associate Professor of

Business and Society in the

Department of People,

Organizations and Society,

Grenoble Ecole de

Management, Grenoble,

France. Amit Kapoor is

Honorary Chairman of the

Institute for

Competitiveness, Gurgaon,

India. Sandeep Goyal is a

Doctoral Candidate at the

Management DevelopmentInstitute, Gurgaon, India.


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competitiveness of a particular enterprise. Since 2006, the developed economies are

growing at a rate of 1-2 percent as compared to developing economies, which are growing

at a rate of 6-10 percent. The declining gross domestic product (GDP) growth rate and

market saturation in developed economies is bringing about a paradigm shift in focus and

attention towards the growing demands and potential business opportunities in developing

economies. The predominant market in these developing economies is characterized as

uncertain, informal, rural and heterogeneous having people lying in the BoP socio-economic

segment.

India is one such developing economy, which is emerging as a promising market having aconsistent GDP growth rate of more than 7 percent since 2006 and having a huge population

base (.1.2 billion as in year 2011). As per UNICEF (2009), 70 percent of the population in

India resides in rural areas. As per the World Bank estimates, 41.6 percent of Indias

population lives below $1.25 per day and 75.6 percent live below $2 per day (Haub and

Sharma, 2010). This is characterized as a BoP segment, which lives and resides in an

informal market and differs from mid and high-income context with respect to increasingly

prevalent market imperfections like information asymmetries, market fragmentation, weak

legal institution, weak infrastructure, resource scarcity and poverty penalty (Viswanathan

et al., 2007). The BoP segment lacks access to formal market conditions for the fulfillment of

their basic needs like food, energy, drinking water, healthcare, sanitation, education,

financial infrastructure, insurance etc. This presents a significant business opportunity for

the organizations to enter the BoP market using a differentiated business model and

organizational mind-set.

One such area is need for healthcare, where there exists a significant demand-supply gap at

BoP in India. There is a big gap between the pricing and quality of healthcare services

provided by the private hospitals and government hospitals. There exists an unmet market

need for an alternative option from the existing options. The existing options are:

B government hospitals with limited resources;

B large private hospitals whose high prices resulting in services beyond the reach of BoP

segment;

B small private nursing homes that lack transparency in pricing and quality; or

B medical quacks.

The lack of accessibility and availability of affordable healthcare products, services and

information has created a big barrier in the social and economic development of the BoP

population in India. With the organizations realizing this as a huge opportunity, there has

been an emergence of self-sustainable/profitable business models aimed at the healthcare

related offerings for the BoP population. These organizations are bundling entrepreneurial

attitude and passion, information and communication technology and innovation to design

and implement cost-effective, reliable and scalable market solutions for the BoP segment.

The objective of this paper is to understand the self-sustainable / profitable business models

aimed at providing healthcare services to the BoP in India. The empirical context involves the

use of case study research methodology, where the source of data is the published case

studies of four healthcare organizations. For data collection and analysis, the study follows

the directives for case-based research (Yin, 2009) and is based on multiple sources ofevidence as published case studies, archival data, industry publications, companies web

sites and other literature available in an online public domain. The criteria for choosing case

based research are the underlying complexity and heterogeneity of the BoP socio-economic

segment. The BoP segment carries a different mindset and involves the application of a

different set of rules as compared to the middle and upper segments. So, there is a need to

undertake phenomenon driven research based upon analyzing and interpreting the data

from multiple sources. The sample involves healthcare organizations, which are having a

self-sustainable or for-profit business model at the BoP.

VOL. 12 NO. 4 2012 jCORPORATE GOVERNANCEj PAGE 515


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This research work is an attempt to establish an understanding of the characteristics of the

sustainable BoP healthcare business models. This will add value to the research literature by

bringing forth an understanding of the operating principles for a sustainable and successful

business model aimed at the BoP segment in emerging economies. This will add value to the

practitioner community by bringing forth a practical view on what kind of business models

work and what are the underlying operating principles for providing the healthcare offerings

at BoP, especially in the emerging economies. The question related to what kind of

business . . .? is still an unanswered one and will require clarity by looking at the existing

models in the field.

The subsequent research study is divided into seven further sections. Section 2 will

elaborate the existing literature regarding BoP, business models and healthcare in India.

Sections 3-5 will elaborate the research design, sample selection and research

methodology. Section 6 will present the analysis and findings resulting from with-in and

cross-case analysis. Section 7 will be the conclusion of the study and Section 8 will present

the recommendations for future research.

2. Literature overview

2.1 BoP

BoP is a collective reference to 3.7 billion people populating the lowest income strata in the

world. The income threshold for this group is US$ 3,000 per person per year (as per year2002 purchasing power parity (PPP)$), or roughly US$8 perperson perday (Hammond et al.,

2007; Prahalad and Hammond, 2002). Landrum (2007) and Karnani (2007, 2011) argued

that the promised US$4 trillion worth market does not simply exist and has some

misconstrued assumptions, which need be understood and corrected by organizations

entering the BoP. Karnani (2011) argued that:

BoP is a fuzzy phrase. The poor should be considered in terms of absolute poor. What is unique

about the BoP idea as Prahalad and Stuart Hart first talked about it is that you could make a profit

from it, not do it as a charity. I think we should impose three strict conditions on BoP logic: That its

profitable. Its actually (serving) the poor. Its good for the poor. Now, you put these three

conditions together and there are very few positive examples (of BoP enterprises).

Despite the different perspectives on what constitute the BoP, the global organizations have

realized this as a big untapped opportunity having its own unique set of underlying

challenges, which require a differentiated mind-set and approach towards value

proposition, value creation, delivery channels and revenues generation. There is a need

for understanding that the criteria for the BoP differ by country. From business perspective,

BoP should be looked upon as a heterogeneous segment, which can be further categorized

into sub-segments like extreme poor (,$1 per person per day), $1-2, $2-8 and so on.

India itself serves as a good example of differing estimates of the number of people who are

below the poverty line (BPL[2]). Figure 1 reflects the comparative numbers of Indian

population classified as BoP, as projected by different studies.

This research paper considers the World Bank definition as the classification of BoP

segment (,$2 PPP per day).

There is a need to look at an integrated view of the BoP segment in terms of opportunity,

need and challenges (Figure 2).

The opportunity dimension represents the BoP socio-economic segment, which presents a

huge untapped market potential of 3.7 billion consumers worth having an annual household

income of US$5 trillion (Hammond et al., 2007). The average daily income level of the BoP

individuals lies between US$1 to US$8 (as per Year 2002 PPP $). The study by Hammond

et al. (2007) quantifies the potential market opportunity as follows. Asia represents a BoP

market potential of 2.86 billion people having annual household income of $3.47 trillion.

Eastern Europe represents a BoP market potential of 254 million people having annual

PAGE 516 jCORPORATE GOVERNANCEj VOL. 12 NO. 4 2012


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household income of $458 billion. Latin America represents a BoP market potential of 360

million people having annual household income of $509 billion. Africa represents a BoP

market potential of 486 million people having annual household income of $429 billion.

The need dimension represents the key characteristics of the value offerings, which are

required to build the market at the BoP. The BoP segment has to be looked upon from the

market development perspective. This involves identifying the unmet basic need,

Figure 1 India population comparative estimates below poverty line (millions)

Source: Haub and Sharma (2009) http://www.prb.org/Articles/2010/indiapoverty.aspx Last accessed on 26 Jan 2012

Currentofficial

328

413 436

488

710

887 903

NC SaxenaCommiee(Rural only)

Proposedofficial

World Bank


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understanding the price point (price minus rather than cost plus perspective), designing

and offering the market based solution for the same, which is affordable, accessible,

available and leads to formal market inclusion and awareness (Prahalad, 2004). Affordability

involves understanding the price point of the target segment and work backward to identify

the challenge cost after adjusting the margins. Accessibility and availability refers to the

design of delivery channels to enable the reach and availability to the target segment.

Awareness involves providing necessary information and education to the BoP segment,

which helps them in understanding the formal markets, taking a decision, which is beneficial

to them.

The market complexity dimension represents the key challenges faced by the organizations

entering the BoP (Shukla and Bairiganjan, 2011). The BoP customer profile poses challenge

to the organizations in terms of making market decisions based upon the unpredictable

market dynamics like income volatility, low savings due to lack of access to formal financial

infrastructure, diversity in languages and literacy levels across regions, limited mobility and

travel infrastructure and purchase decisions driven by social beliefs and frugal mindset. The

BoP environment poses challenges in terms low population density across geographies,

lack of government interventions and policy support and scarcity of data sets related to BoP

population characteristics. The BoP infrastructure poses challenges in terms of lack of basic

infrastructure like electricity, water, technology, roads, etc. as well as lack of complementary

products and services, which can help to expand the market. This leads to barriers for reach

and accessibility. The availability of skilled resources like doctors, paramedical staff,

engineers, etc. is another challenge in terms of resources, which act as a major barrier inlaunch of products/services which require skilled manpower.

2.2 Business model

The term business model is being used as a heterogeneous concept having diverse

interpretations and growing typologies. While some researchers perceive business model

as a business concept that explains the logic of value creation for a firm (Timmers, 1998;

Linder and Cantrell, 2000; Hamel, 2000; Shafer et al., 2005; Mitchell and Coles, 2004a, b;

Morris et al., 2005; Teece, 2010; etc.), others rely on it as a link between strategy, business

processes and information systems (Amit and Zott, 2001; Chesbrough, 2007; Osterwalder

and Pigneur, 2010). The difference between these two interpretations of business models

concerns the relationship of business model with the concepts of strategy, business

processes, and information and communication technology (ICT). While in the firstinterpretation, the three concepts are included in the description of business model, the

second interpretation considers them as inter-linked components. Chesbrough (2007)

explained the business model as a combination of value proposition, customer segment,

value-chain setup to create and distribute value, cost and revenue structure, firm position in

value network and competitive strategy. Osterwalder and Pigneur (2010) emphasized that

the business model is like a blueprint for a strategy to be implemented through organization

structures, processes and systems. A business model describes the rationale of how an

organization creates, delivers, and captures value. The framework proposed by Osterwalder

and Pigneur (2010) follows a system approach, wherein business model for any

product/service offering is evaluated on the basis of nine sub-systems/building blocks as

value proposition, target customer segment, customer relationship, delivery channel), key

resources, key activities, key partners, cost structure and revenue structure.

2.3 BoP business model

The BoP phenomenon is characterized by divergent and multi-directional nature of research

literature, which has focused on multi-dimensional themes like value proposition, disruptive

innovation and value co-creation through local capacity building and native learning. In the

context of BoP, value proposition refers to the offerings made for engaging the BoP segment.

This not only includes BoP as consumers but also as employees, distributors, and suppliers

(Viswanathan et al., 2007; Karnani, 2007). Local capacity building refers to the building of



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necessary skills and ecosystem for engagement of local community in BoP business

operations. Chaskis et al. (2001) defined local capacity at the community level as:

[. . .] interaction of human capital, organizational resources, and social capital existing within a

given community that can be leveraged to solve collective problems and improve and maintain

the well-being of that community.

Local capacity building thus refers to a communitys increased collective ability to solve

problems and identify opportunities. Local embeddedness refers to the engagement of an

organization operating at BoP with the local community not only for business transactions

but also as a long-term relationship. Miller (1996) defined embeddedness as:

[. . .] theextent to which a companys strategy reflects or is influencedby its social andinstitutional

connections.

Hence, it could be understood that local embeddedness of business develops a local

presence within peoples everyday life., One of the most effective approaches for local

embeddedness is to work with non-traditional partners for value creation and delivery (Hart

and London, 2005). Localized learning refers to the incorporation of bottom-up learning

mechanisms by the organizations operating at BoP. There is a need to systematically

identify, explore and integrate the views of the stakeholders on the fringe and to co-discover

and co-create new business opportunities and business models with marginalized groups

and communities (Hart and Sharma, 2004; Hart and London, 2005; Simanis and Hart, 2009).

The different researchers have focused on different dimensions and have highlighteddifferent attributes of BoP market. According to Hart and Milstein (2003), sustainable

development requires multi-dimensional performance to manage multi-faceted challenges

across social, economic and environmental aspects. This requires strategic business

models to focus on sustainability drivers like, clean technology, product stewardship,

pollution prevention and sustainability vision. Multinational companies (MNCs) that are

facing tough situation in saturated markets in developed countries could shift their focus to

emerging economies. However, they need to develop a global capability in social

embeddedness for targeting the low-income segments in emerging markets (London and

Hart, 2004). This includes developing relationships with non-traditional partners,

co-inventing custom solutions, and building local capacity.

It has also been highlighted in literature that social entrepreneurship has the potential to

create new models for the provision of products and services that cater directly to basichuman needs that remain unsatisfied by current economic or social institutions (Seelos and

Mair, 2005). Social entrepreneurship is defined as a process that catalyzes social change

and addresses important social needs in a way that is not dominated by direct financial

benefits for the entrepreneurs. This requires embeddedness as a critical link between

different theoretical perspectives as structuration theory, institutional entrepreneurship

theory, social capital theory and social movement theory (Mair and Marti, 2006).

Another area that has attracted attention of researchers is role of innovation in BoP markets.

Anderson and Markides (2007) have highlighted the importance of strategic innovation and

affordability, acceptability, availability and awareness as key dimensions for serving the

base of the pyramid profitably. Simanis and Hart (2009) argue that organizations need to

adopt embedded innovation paradigm (EIP) as compared to structured innovation

paradigm (SIP) at BoP. While SIP is transaction based having focus on fulfilling customerneed by delivering product/service that is faster and cheaper than the ones by the

competitors, EIP is relationship based having transformational stakeholder commitment.

Moreover, affordability and sustainability are replacing premium pricing and abundance as

innovations drivers (Prahalad and Mashelkar, 2010). To tackle this challenge and

opportunity, companies are adopting inclusive growth and innovation via disrupting

business models, modifying organizational capabilities and creating or sourcing new

capabilities. This requires a clear vision, setting stretch targets, exercising entrepreneurial

creativity within constraints, and focusing on people, not just profits or shareholder wealth.



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Lately researchers have identified that it is necessary to involve local resources to ensure

BoP consumers are addressed in a meaningful manner. According to Dahan et al. (2010),

Multinational enterprises (MNEs) should collaborate with non government organizations

(NGOs) for value creation and delivery, while entering developing countries. This

partnerships enable MNEs to gain market expertise, legitimacy with clients/customers,

civil society players and governments, and access to local expertise and sourcing and

distribution systems.

It has been repeatedly emphasized that organizations having intention to enter the BoP

market should not only focus on economic value, but also on social value. Porter and Kramer(2011) argue that when organizations would focus on shared value, which involves economic

value creation, it leads to an inherent objective of creating value for the society by addressing

its needs and challenges. This requires reconfiguration of products and markets, redefining

productivity in the value chain and enabling local cluster development. Further, Yunus et al.

(2010) highlight the role of social business models at BoP, the underlying components, core

objectives, comparison with CSR and profit maximizing businesses and resulting impact on

the involved organizations as well as target segments and other stakeholders in the

value-chain. Thispaper highlights five lessons fromGrameenBank experience, whichinclude

challenging conventional thinking, finding complementary partners and undertaking

continuous experimentation, recruiting social-profit-oriented shareholders, and specifying

social profit objectives clearly and early. Thus, business models need to be tweaked to

incorporate the social aspect and not only focus on economic aspects.

2.4 BoP healthcare in India

The healthcare industry in India is on a strong growth curve and is growing at a CAGR of 14

percent. As per IBEF (2011), the market size is expected to grow from US$40 billion (Year

2009) to US$79 billion (Year 2012E). This includes hospitals (71 percent), pharmaceuticals

(13 percent), medical equipment and supplies (9 percent), medical insurance (4 percent)

and diagnostics (3 percent). The demand for primary, secondary and tertiary healthcare in

India is in the ratio of 60:30:10.

WHO (2010) has highlighted the comparative indicators to reflect the urban-rural and

public-private distribution of healthcare in India as compared with the rest of the world

(Figure 3). India has an infrastructure of around 16,000 hospitals; though most of these

are based in urban areas as against majority population living in rural areas (International

Trade Administration, n.d.). The public-private contribution ratio is 20 percent:80 percent.

This raises a big question mark on the availability of affordable and good quality healthcare

for the majority of the population which lies in the BoP segment and lives primarily in rural

areas. The private healthcare is mainly focused on profitable urban markets. The lack of

micro-insurance coverage for the BoP segment further excludes them in accessing the

private healthcare services.

As highlighted in Figure 4, India lags behind other developed and emerging economies in

terms of the number of available skilled doctors, nurses and physicians for each one

thousand population (PWC, 2007). These figures get skewed further when mapped to

rural-urban distribution of population in India. As per IBEF (2011), India has 700 million

people (approximately) residing in 636,000 villages (approximately). This accounts for 70

percent of the total population in India. The rural doctor to population ratio is lower by six

times as compared with urban areas. The rural bed to population ratio is lower by 15 times as

compared with urban areas.

Considering all these factors, it becomes evident that there is a severe shortage of

accessibility and availability of affordable healthcare facilities compounded by lack of skilled

resources (doctors, nurses, physicians, medical equipments etc) in rural areas. The situation

is further compounded by lack of adequate health insurance schemes for the people at BoP

in both rural and urban areas. A World Bank Report on Indian Healthcare in the year 2002

noted that:



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One episode of hospitalization is estimated to account for 58 percent of per capita annual

expenditure, pushing 2.2 percent of the population below the poverty line. 40 percent of those

hospitalized have to borrow money or sell assets.

This reflects that 22 million of the population is pushed below the poverty line annually due to

healthcare expenditure alone. This is a cause for concern and attention for all.

Figure 4 Health care comparative resources

High Income

Countries

(US, Europe

etc.)

Middle

Income

Countries

(Brazil,

China, South

Africa etc.)

India

Other Low

Income

Countries

(Sub-

Saharan

Africa)

World

Average

Beds 7.4 4.3 1.5 1.5 3.3

Physicians 1.8 1.8 1.2 1 1.5

Nurses 7.5 1.9 0.9 1.6 3.3

0

1

2

3

45

6

7

8

Countper'000Popu

laon,

2001

Be ds Hospitals Dispe nsar ie s

Rural 9.85 0.36 1.49

Urban 178.78 3.6 3.6

0

20

40

60

80

100

120

140

160

180

200

CountPer100,0

00Populao

n

Sources: PWC (2007); Gangolli et al. (2005)

Figure 3 Health care comparative indicators

Source: WHO World Health Statistics (2010)

8.40%

4.10% 4.30%

15.70%

8.40%9.70%

Brazil India China USA UK Global

Healthcare Spending (%age of GDP)

%age

60640 108

7,285

3,867

802


Per Capita Spending (USD)

USD

837109 233

7,285

2,992

863


Capita Spending (USD)

USD


Private 58.40%

120%

100%

80%

60%

40%

20%

0%

73.80% 55.30% 54.50% 18.30% 40.40%

Public 41.60% 26.20% 44.70% 45.50% 81.70% 59.60%

%age

Healthcare Spending Comparison

(%age)



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3. Research study design

The objective of this paper is to understand the self-sustainable business models aimed at

providing healthcare services to the BoP in India. The empirical context involves the use of

case study research methodology, where the source of data is the published case studies of

four healthcare organizations. The case study approach is needed to analyze the issues and

relationships which are complex and inter-disciplinary and which cannot be made evident

by survey-based statistical analysis. A multi-organization case study design allows for an

in-depth analysis across different contexts and enables researchers to better understand

how and why outcomes occur (Huberman and Miles, 1994). The tentative explanations

found in a within-case analysis can be tested across other cases, enhancing reliability and

validity of the conclusions drawn (Yin, 1981).

4. Sample selection

The sample includes healthcare organizations, which have adopted a self-sustainable

business model for offering services to the BoP in India (Table I).

5. Research methodology

The research methodology involves iterative data analysis process. The details for each of

the selected case studies has been compiled from the multitude of secondary sources,

which includes published case studies across publications like EMCS[3], UNDP[4], WDI[5],innovations[6] as well as published literature from online sources, websites of selected

organizations, published books etc. The first step involves identifying the sources of data for

the required information on the selected organizations. The second step involves content

analysis (with-in) of the published literature identified for each of the selected organizations

using Atlas.ti[7] software. The third step involves doing the cross-case analysis to

understand the similarities and differences across the different building blocks of the

business models of the selected organizations. The fourth step involves compiling the

overall findings in a comparative table (Appendices 1-5) and building on that to bring forth

the recommendations and findings, which will enable the understanding of key operating

principles at BoP in rural and semi-urban healthcare in India.

6. Analysis and findingsThe review of the business model and BoP literature brings forth the following key

dimensions, which should be evaluated for understanding the BoP business models. The

first dimension is to identify the pain point and decide upon value offering. The second

dimension is to understand the customer aspect. This includes answers to the questions like

what are the target segments, how the customer relationships are being built, what kind of

Table I Inclusive healthcare sample selection

S no. Company Offering Type

BoP inclusion

type Source Published in

C1 Aravind

Eyecare

Eye care Service,

product

Consumer,

employee

Kasturi Rangan and

Thulasiraj (2007)

Innovations

C2 Narayana

Hrudalaya

Heart care Service Consumer,

employee

Kothandaraman and

Mookerjee (2007)

UNDP

C3 Vaatsalya Primary and

secondary care

Service Consumer Mukherji (2010) UNDP

C4 LifeSpring Maternal care Service Consumer,

employee

Krishnadas (2011) Emerald EECS

Note: The selected cases had to describe a business model that included the poor in ways that could be profitable and that clearly

promoted human development



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delivery channels are being setup. The third dimension is to understand the value creation

aspect. This includes answers to the questions like what kind of organizational form and

structure is being setup, what is the leadership style, what kind of actions, competencies

and capabilities are necessary to enable the market based ecosystem for value creation.

The fourth dimension is to understand the value network. This includes answers to the

questions like what is the significance of partnerships and what kind of partnerships are

undertaken to build market based ecosystem. The fifth dimension is to understand the

socio-economic aspect. This includes answers to the questions like what kind of cost

structure and revenue streams are in place and what is the social impact.

The four selected organizations are analyzed with respect to the key dimensions highlighted

above, as the primary evaluation criteria.

The starting point for analysis is need identification and value proposition. Aravind Eyecare

(AE), Narayana Hrudayalaya (NH), Vaatsalya (V) and LifeSpring Hospitals (LH) started by

segmenting the market as per the competency and vision of the founder. AE focused on

enabling theaccess to affordable treatmentfor needless blindness. NH started with thefocus

on cardiac care but gradually diversified itself across the primary, secondary and tertiary

healthcare services. V focused on enabling the access to affordable primary and secondary

healthcare in rural and semi-urban areas. LH focused on enabling the access to affordable

maternal care in semi-urban areas. The overall intent remained the same across the

organizations thatis to builda self-sustainableeco-systemfor offeringaffordable,accessible

and high quality (performance/price) healthcare to the rural and semi-urban population.

Depending upon the competency and vision of the founder, these organizations segmented

themarket accordingly. Themainintent wasnot only to enableaccess to healthcare butalso to

build a healthcare awareness ecosystem, which could lead to preventive healthcare.

The second point of analysis is the customer aspect. The BoP market is a non-homogenous

market having several sub-segments, which can be determined by income level (,$1 per

day, $1-2 per day, $2-4 per day, $5-8 per day and so on), by geographical concentration

(rural BoP, urban BoP, etc.), by gender (men or women or children or aged etc) and so on.

So, the identification of target segment before finalizing the value offering is found to be

extremely important for successful venture at BoP. Regarding target segments, all these four

healthcare service organizations identified the unfulfilled specific or generic healthcare need

at the BoP and went for a scalable and replicable business model aimed at market

development for fulfilling that particular need. All these healthcare organizations focused on

providing healthcare services across the socio-economic segments with the primary focus

on BoP segment. This enabled them to cross-subsidize the margins while maintaining the

affordability for the masses. While AE and NH enabled the healthcare services to all

irrespective of the paying capacity, V and LS focused on the paying patients only thereby

missing out the extreme poor. Regarding customer relationship, all the four organizations

realized the need to build trust and transparency apart from affordability and accessibility to

pull the BoP segment from informal market substitutes. To enable this, these organizations

adopted the last mile connectivity by adopting the inclusive approach, which involved

engaging the locals as para-medical staff and nurses. On one hand, this helped to provide

income opportunity to the BoP segment and on the other hand, this helped to gain trust and

transparency with the BoP segment. Another relationship aspect that stood common among

all these healthcare organizations was that all these organizations realized the need to focus

on building healthcare awareness among the BoP segment. The common belief was thataccess to preventive healthcare awareness and information is more important than access

to reactive healthcare services. AE focused on customer relationship by ensuring the

treatment for all irrespective of the paying capacity, by organizing eye-care camps to spread

awareness and mobilize the masses into a system to get treated and by providing bets

quality treatment and eye-care products at fraction of the imported costs. NH created a

dynamic shift in customer relationship by enabling the affordability of healthcare for BoP

consumers through private micro-insurance schemes like Yeshaswini and Arogya Raksha. V

complemented its primary and secondary healthcare services with preventive healthcare



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camps like rural birth centers, test lab for checking the fluoride content in water etc. LS

focused on preventive healthcare by organizing community outreach programmes among

the semi-urban poor. Regarding delivery channel, the main focus of the healthcare

organizations was to overcome the accessibility issues with cost effective measures. V and

LS implemented hub model by building a network of hospitals as a solution to increase

access to the masses. The idea behind the hub model was to be big enough to gain more

acceptance in the market as compared to existing government community health centers

and small private clinics. NH and AE adopted the hub-n-spoke model for value delivery.

This included building an integrated network of hospital setups, mobile outreach vans and

tele-network. All the issues for remote patients are screened via teleconferencing orvideo-conferencing and mobile outreach vans and whoever required an advanced

treatment were being treated at the main hospital facility. This made a significant contribution

in bridging the accessibility gap for remote BoP patients.

The third point for analysis is value creation aspect. This includes analyzing the type of

organizational structure, leadership type, operational focus areas and key resources. Cost

efficiency, performance price ratio, experimentation, centralization or decentralization and

scalability are some of the decision points, which require action during value creation.

Regarding organizational structure, all these organizations realized the importance of the

productive utilization of their core resources doctors and paramedical staff. These

organizations went about the same by ensuring the minimal administrative involvement of

doctors and paramedical staff. This resulted in better productive as compared to the

industry average thereby resulting in increased capacity utilization and access to themasses. Regarding the leadership type, all these five organizations were driven by the

philosophy and goals of the founders. The founders of these organizations had a clear focus

driven by passion, positive attitude, experimentation, innovation and willingness to learn.

The focus was on balancing the speed of execution, cost of execution and outreach. They

always aimed at the business venture to be self-sustainable rather than relying on charity

and grants. Regarding core resources and capabilities, all these organizations focused on

building the BoP market knowledge, building the pool of doctors and paramedical staff and

innovation capacity complemented by standardization of processes. AEs capabilities

included leadership, customer focus, in-house funding, in-house training programs for

training locals as nurses, continuous focus on technology and innovation to reduce cost and

increase access, backward integration into manufacturing eye-products, permanent hiring

of doctors, ability to scale and to build no-frills, asset-light infrastructure. NHs capabilities

included leadership, customer focus, strategic partnerships for funding, in-house training

programs for training locals as nurses, continuous focus on technology and innovation to

reduce cost and increase access, short term contracts with suppliers, permanent hiring of

doctors, ability to scale and no-frills, asset-light infrastructure. Vs and LSs capabilities

included leadership, customer focus, strategic partnerships for funding, ability to scale,

competency in setting up cost-efficient asset light infrastructure set-up, engagement of

locals as paramedical staff. Regarding operational activities, the focus of all these

organizations was on adopting a bottom-up approach for design and delivery of healthcare

offerings. Also termed as challenge cost or price minus, this included finalizing the end

price first based upon market capacity and then worked backward to meet the challenge

cost while keeping some scope for margins. To effectively meet the challenge cost, all these

organizations adopted the asset-light and local engagement model where they undertook

the continuous cost efficiency measures across the value-chain via short term agreementswith suppliers, leased infrastructure, outsourcing of allied activities, standard operating

procedures and equipments, engagement of locals (in-house training) as customer contacts

and paramedical staff, minimal administrative involvement of specialists, prolonged use of

OTs, technology adoption, experimentation, innovations and local capacity building. AE and

NH achieved the same by adopting a no-frills-assembly line model. This included a lean

organizational structure with specialists focusing only on surgeries and consultations rather

than administrative tasks, in-house of training of girls from poor communities as nurses for

doing the intensive and complex healthcare related tasks, facilitating high volumes of



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surgeries by adopting capacity utilization and productivity as well as extended working

hours for doctors and extended availability of operation theatres. NHs cost control measures

also included short term (weekly) procurement contracts with suppliers to have increased

bargaining power, preferring lease over buy-outs for most of the medical equipments,

volume based purchase agreements, integration of technology wherever applicable,

unbundling of hardware and software for ECG machines, use of digital x-ray plate, use of

software to transmit images over internet, use of mobile outreach van and use of

telemedicine network. AEs cost control measures also included assembly line setup for

surgeries measures (For example: AE conducted 10X number of surgeries, each taking

10-15 min as compared to X number of surgeries each by other hospitals using the same

resources), vertical integration (manufacturing of IOLs, sutures, ophthalmic products via

AuroLab setup) and standardization of equipments, systems and processes. V and LS

achieved the same by adopting a no-frills approach. The no-frill approach included

minimizing the non-core expenditure on hospital infrastructure set-up like choice of location

in cheaper semi-urban areas, having building on lease, having equipments on rent, having

rooms with only essential items and so on. Other cost control measures included engaging

locals as nurses and paramedical staff, having centralized procurement terms and

conditions to attain bargaining power with suppliers. Other operational measures included

focusing on achieving a capacity utilization of at least 80 percent at each hospital and having

rapid expansion of the network of hospitals.

The fourth point for analysis is value network aspect. This includes analyzing the type of

partnerships in creating a market-based ecosystem. For a sustainable and scalable venture,

these healthcare services organizations realized the importance of technology integration to

enable reach to the BoP, the importance of funding to enable the scale-up and scale-out, the

importance of operational partnerships to enable cost innovation and the importance of local

skill and capacity building and BoP inclusion as nurses and paramedical staff to enable trust

and transparency. AE was the only exception here as it mainly relied on internal sources for

funding rather than focusing on funding partners. The key aspect, which was found missing

and needed attention, was that most of these healthcare services business ventures were

operating individually in their respective area of expertise. Considering the complexity and

the magnitude of the healthcare services required at BoP, it would be better to integrate the

individual BoP healthcare organizations into a uniform network. This development of an

integrated ecosystem of inclusive healthcare is required to maximize the reach and impact

and resolve the scalability limitations.

The fifth point of analysis is socio-economic impact. Regarding social impact, all these

organizations kept the primary focus on serving the low-income segments in semi-urban and

rural areas. At the same time, these organizations adopted the local engagement model,

which helped in building the trust and transparency with the low-income communities and

also provided the avenues for increased earnings and professional skill building as nurses

andparamedical staff, to the low-income segment. Thedetails arehighlighted in Appendix 3.

Regarding economic impact, all these organizations had an ongoing focus on cost control

and optimization by integrating technology based innovations in their operational processes,

bargaining with suppliers on volumes and inventory, taking decisions on lease versus buy,

hiring locals for operationsand customer interface and no-frills offeringshaving best of quality

with optimal packaging. All these organizations maintained the operational cost and salary

overheads much below industry average. Regarding revenues, all these organizations

focused on scale and volume by productive utilization of core resources and by charging

much below industry rates for the high quality service offerings. AE and NH followed the

cross-subsidized approach, wherein they targeted the high and mid-income segments as

well apart from low income segment and charged them as per their paying capacity. This

helped them to offer a high performance/price ratio to the BoP segment. V and LS focused on

revenues generation from surgeries and consulting fees from the paying patients.



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7. Conclusion

The healthcare services organizations displayed the common intent, objective and passion

of creating an ecosystem to deliver the inclusive healthcare services to the poor. All these

organizations were driven by the passion, vision and mission of the founders, which over rid

the operating challenges and infrastructural constraints. This brings an interesting question

for the future. That is, how to build sustainable and scalable healthcare services

organizations at the BoP, which are driven by multi-national enterprises. The key operating

principles, which act as recommendations for the sustainability of healthcare services

organizations at the BoP are as follows:B Segment, segment and segment. There is a need to clearly identify the need and target

segment at BoP, which the organization wants to focus. BoP is a non-homogeneous and

complex market, which requires clear understanding and focus before the launch of

business venture.

B Focus on 4As. To enable a successful venture at BoP, the organizations need to focus on

product/service offerings, which are affordable, accessible, available and lead to

awareness among the masses.

B Do not assume. One of the most common mistakes being done by the organizations

venturing into BoP is that they go by their own perception and assumption as to what is

required by the BoP segment.

B

Engage the BoP. To build trust, transparency and buy-in, there is a need to engage BoPacross the value-chain as employees, suppliers, entrepreneurs, innovators and

distributors.

B Local capacity building. There is a need to build a pool of skilled resources for ensuring

quality services at the BoP. For example, regarding healthcare, the demand for doctors

and nurses is much more than the availability. There is a need to follow the AE and NH

approach of having focused training and education programs for the inclusion of the

low-income local population as nurses, support staff and intermediate specialists. This is

required to bridge the demand-supply gap of these skilled resources as well as

contribute in local skill building and economic welfare of the BoP segment.

B Experiment, experiment, experiment. There is no business plan, which can succeed in

first go at the BoP. Considering the complexity of the BoP market, there is a need to

experiment during design and implementation of products and services at BoP.B Build a network. There is an increasing role for technology and funding in the success of

business ventures at BoP. This signifies the importance of collaborative network of

strategic partners for funding, technology and operational efficiency, which will lead to

sustainable business venture at BoP.

B Focus on end-to-end need. The BoP market is served by the informal market players like

local money-lenders, uneducated quacks as doctors etc. To replace the informal market

players andto encouragetheBoP segment toadoptthe offeringsin formalmarket, thereis a

need to complement the product/service offerings with complementary access to

information, technology and funding support. For example, regarding healthcare, there is a

needto offerpreventivehealthcare related awarenessas wellas access to micro healthcare

insurance. A major part of the rural BoP segment suffers from lacks of basic education

(literacy), lack of regular per-capita income, low disposable income and lack of access tosavings infrastructure. This limits their capacity to withstand any major economic shock. V

ensured the same by complementing their value offerings by organizing preventive

healthcare camps like rural birth centers, test lab forchecking thefluoride content in water,

etc.NHensuredthesamebyestablishingtele-medicinenetwork,mobileoutreachvansand

launching micro-insurance schemes like Yeshaswini and Arogya Raksha.

B Align with the government and regulatory framework. The BoP business ventures need to

ensure that they are in sync and complement the government offerings and fulfill the

regulatory requirements while entering into BoP.



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B Technology is the key. Considering the affordability, accessibility and availability

challenges in emerging economies, technology is a key stakeholder for any business.

With this in mind, business models designed for emerging economies should focus on

technology integration as a key aspect in value creation and delivery.

B Organization structure and leadership. The business ventures at the BoP require a

decentralized organizational structure, which has the flexibility to take dynamic decisions

in dynamic environment. Regarding leadership, there is a need for a passionate and

dynamic leadership to drive the business ventures at BoP. The founders of the respective

healthcare organizations analyzed in this paper, had the passion, positive attitude,

willingness to experiment, innovate and learn. They maintained focus on balancing the

speed of execution, cost of execution and outreach.

B Focus on scale. The business ventures at the BoP need to focus on scale to neutralize

the high operational and infrastructure costs and low margins. It becomes necessary to

have the ability and capacity to drive volume based revenues as well as being able to

target the mid and upper segments to get higher margins to balance the lower margins

from the BoP segment. This has proved to be quite successful because there is an

institutional void in the fulfillment of basic needs (healthcare, energy, education, finance,

etc.) for the BoP population in India. Regarding healthcare, NH diversified into

availability of non-cardiac related healthcare facilities to increase the economies of scale

and scope. V specialized into treatment of wide range of primary and secondary

healthcare diseases.

B Build a collaborative platform. At a macro level, there is a need to move from isolation to

collaboration among different BoP business ventures. For example, regarding healthcare,

most of the healthcare business ventures are operating individually in their respective

area of expertise. Considering the complexity and the magnitude of the healthcare issue

at BoP, it would be better to integrate the individual BoP healthcare organizations into a

uniform network. This development of an integrated ecosystem of inclusive healthcare is

required to maximize the reach and impact with shared resources and to resolve the

scalability limitations with individual organizations.

To conclude, this research article is an original attempt to understand the key operating

principles for sustainable healthcare services and othersimilar business ventures at BoP. This

research holds an implication both for the research community and the practitioner

community. Forthe research community, this paper acts as a deeperinsight into theemergingbusiness models and key operating principles in the context of BoP, primarily in healthcare

services. For the practitioner community, this paper acts as a reference guide on the key

essentials and steps to be taken care of, while entering the BoP. The intent is to understand

and bring forth the learning and guiding principles, which act as a catalyst for the future

researchers and business ventures in BoP service offerings especially inclusive healthcare.

8. Future research

This research study has been limited to in-depth evaluation of published case studies and

other secondary data pertaining to four healthcare services organizations operating at BoP

in India. The findings from this research can be enhanced further by extending the scope of

this study with field studies of other prominent healthcare products/services providers atBoP in India. Also, the source of data for this research study has brought forththe inputs from

the organizational perspective. To add value to the same, it is recommended to undertake a

survey research of the BoP stakeholders (BoP consumers, civil society organizations, BoP

suppliers, BoP employees, BoP entrepreneurs, etc.) to get the perspective of the

intermediaries and the target segments. This will bring forth the quantitative analysis of the

inputs regarding key expectations of the BoP segment from the organizations and whether

there exists a gap in assumptions and expectations.



16/21

Notes

1. As per Hammond et al. (2007), The Base of the Pyramid (also referred to as the Bottom of the

Pyramid or Low Income Segment) refers to the estimated 4 billion people around the world who are

poor by any measure and have limited or no access to essential products and services such as

energy, clean water, and communications. Globally, people in this socioeconomic group earn US$1

to US$8 in purchasing power parity (PPP) per day. Yet these households often pay higher prices

(poverty penalty) than wealthier consumers do for lower-quality goods and services because of

uncompetitive markets. As per London (2008), BoP is defined as the socio-economic segment that

primarily lives and transacts in the informal economy.

2. As per Haub and Sharma (2009), Indias official poverty measure has long been based solely uponthe ability to purchase a minimum recommended daily diet of 2,400 kilocalories (kcal) in rural areas

where about 70 percent of people live, and 2,100 kcal in urban areas.

3. EMCS refers to Emerald Emerging Markets Case Studies

4. UNDP refers to UNDP growing inclusive markets

5. WDI refers to The William Davidson Institute

6. Innovations refers to peer-review academic journal published by MIT Press.

7. www.atlasti.com

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Appendix 1

Table AI BoP healthcare services providers in India scenario

Aravind Eyecare Narayana Hrudayalaya Vaatsalya LifeSpring Hospitals

Scenario As per WHO (2010), 285

million people who are

visually impaired worldwide,

which includes 39 million asblind and 246 million people

having low vision. About 90

percent of the worlds visually

impaired live in developing

countries. About 80 percent

of all visual impairment can

be avoided or cured

India needs 2.5 million heart

surgeries per year whereas

all the hospitals in India,

together perform around80k-90k surgeries per year.

There is a huge

demand-supply gap.

Another issue is the huge

cost of heart surgery, which

is unaffordable for the

majority of the population in

India

70 percent of India is living in

semi-urban and rural areas

while 80 percent of Indias

healthcare facilities arelocated in urban (Tier I)

areas. This large gap in

demand-supply requires

focus on increasing

availability of primary and

secondary healthcare in rural

and semi-urban areas

As per WDI (2008), India has a

maternal mortality of 450 (per

100k live births) and infant

mortality of 57 (per 1k livebirths). Only 43 percent of

Indian women are cared for by

a skilled attendant during birth

and more than 100k women

die every year from

pregnancy-related causes.

Health insurance, especially

for the poor, is virtually

nonexistent



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Appendix 2

Appendix 3

Table AIII BoP healthcare service providers in India outreach socio-economic impact


Capacity Year 2010-2011 Year 2008 Year 2012E Year 2011Eye hospitals (8), visioncenters (40), communityclinics (7), PG and researchinstitutes, AuroLab, LAICO

12 hospitals, 1,000 beds, tele-medicinenetwork, 24 OTs

14 hospitals (45-50 bedseach), 800 beds, 14kemployees

12 hospitals (25-30 bedseach)

Productivity 2k surgeries persurgeon peryear, 10-12 min. per surgery(10x)

30 major heart surgeries/day

Economicimpact

Year 2010-201170:30: Free:Paying; .30percent margins

Year 2008Revenues: individuals (68percent), corporate (22percent), philanthropicfunds (9 percent), margins:22 percent (EBIDTA)

Year 2012ERevenues: INR 1,378 millionNet profits: INR 47.9 million

Revenues: each setup getsprofitable in two years

Social Year 2010-2011 Year 2008 Year 2009 Year 2011impact AEH (2.6 million

consultations, 0.3 million

surgeries)2,600 camps (0.7 millionscreened, 76k surgeries)Training (6,500 candidatesfrom 94 countries)Aurolab (7.8 percent globalshare, 120 countries)Eye bank (procured4,300 eyes)LAICO (consulting to 280hospitals)

35k surgeries, 70kcatheterization, benefit ($2.5

million)Tele-medicine (30k consultation, 144k ECGimage, 33k angiogram)Micro-insurance (1.8 millionfarmers by 2006)Skill building (19 PG coursesfor nurses and doctors)

No. of patients covered(175,000)

Access to affordable (@15percent costs) healthcare

200,000 customers,12,000 babies delivered

Awareness via communityoutreach programsAffordable (servicescheaper by at least 30-50percent vs privateclinics/hospitals)Customer focus LifeSpring CARES

Table AII BoP healthcare service providers in India overview


Year of setup 1976 2001 2004 2005Founder/managedby

Dr G. Venkataswamy Dr Devi Prasad Shetty Dr A. Naik/Dr V. Hiremath Dr Anant Kumar

Business modelphilosophy

Assembly line (valuecreation); no-frills

hub-n-spoke (outreach);hybrid (multi-tiered pricingand cross-subsidization)revenues

No-frills hub-n-spoke(outreach); hybrid

(multi-tiered pricing andcross-subsidization)revenues

No-frills hub (outreach) No-frills hub (outreach)

Vision/mission V: Eradicates needlessblindness in India

V: Affordable qualityhealthcare for the massesworldwide M: A dreamto making qualityhealthcare accessible tothe masses worldwide

To set up an ecosystemof providing for affordableand high-quality primaryand secondary healthcareservices in rural andsemi-urban areas

M: To be the leadinghealthcare providerdelivering high-quality,affordable core maternalhealthcare to low-incomemothers across India

Issue addressed Treatment for needlessblindness for all

Provide primary,secondary and tertiarycare for all

Provide primary andsecondary healthcare inrural and semi-urbanareas

Provide maternalhealthcare to low-incomesegment

Outreach India (mainly Tamil Nadu) India (mainly Kamataka) India (mainly Kamatakaand Andhra Pradesh)

India (mainly AndhraPradesh)

BoP engagement Consumers, employees Consumers, employees Consumers, employees Consumers, employeesPrice challenge Depends on paying

capacityDepends on payingcapacity

@15 percent-20 percentcost vis-a`-vis otherhospitals

@30 percent-50 percentcheaper than otherhospitals

Awards Conrad (2010), GatesAward (2008), AntonioChampalimaud VisionAward (2007)

The Economist (2011),Schwab Foundation(2005), E&Y (2003)

Sankalp (2009), LRAMP(2008), BiD Challenge(2007)

World BusinessDevelopment Awards(2010), Frost & SullivanAward, ETNow award



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Appendix 4

Appendix 5

Table AIV BoP healthcare service providers in India key attributes


Valueoffering

Enable access to high qualityand affordable eye care forneedless blindness for all,irrespective of the payingcapacity

Enable access to affordableand high quality primary,secondary and tertiaryhealthcare with specializationin cardiac care for all,

irrespective of the payingcapacity

Enable access to affordableand high quality primary andsecondary care for mid andlow income population insemi-urban and rural areas

Enable access toaffordable and highquality maternal care andpediatrics for low-incomemothers in urban slums

Keyoperatingprinciples

Focused eye care needsDynamic leadership havingbelief in experimentation andcost-based innovationRely on self-fundingFocus on 4As* andprice-minusHybrid revenue model freeand paying patientsFocus on innovation,experimentation andlearning-by-doingAccessibility eye hospitals(hubs) supported by spokesas vision care centers andcommunity camps. Mobile

outreach van and ICT forintegrating hub-n-spokesSkilled staff eco-systembeing set up to identify andtrain locals as nursesAffordability ongoing focuson productivity,standardization and cost ofinnovation across thevalue-chainBackward and forwardintegration into eye careproducts and consulting setupFocus on volume-basedscalability within eye care only

Diversify primary,secondary, tertiary health careneedsDynamic leadership havingbelief in technology-driveninnovationRely on funding partners(equity, loan, grants)Focus on 4As* andprice-minusHybrid revenue model freeand paying patientsFocus on technology,innovation andexperimentationAccessibility mobile

outreach vans, tele-medicinenetwork (CCUs,tele-consultation), ICT andvideo-conferencing access,e-image conversion softwareSkilled staff eco-systembeing set up to identify, trainlocals as nursesAffordability ongoing focuson productivity,standardization and cost ofinnovation across thevalue-chainLow cost, cross-subsidizedand micro-insurance(Yeshaswini and ArogyaRaksha) for the poor sections

Focus on scale-up andscale-out

Focus on primary andsecondary, health care needsDynamic leadership havingbelief in rapid scale basedexpansionRely on funding partners(equity, loan, grants)Focus on 4As* andprice-minusPay-for-service modelFocus on technology,innovation and scaleAccessibility by choice ofstrategic locations formaximum outreachDoctor-centric model

break-even (12-18 months),capacity utilization (. 80percent)Affordability ongoing focuson productivity,standardization and cost ofinnovation across thevalue-chainFocus on scale-up andscale-outTransition from hub-n-spoke(hospitals-daycare-clinics) tohub model(50 bedhospital) todifferentiate from governmentsetups and private clinics

Focused maternal careDynamic leadershiphaving belief in rapidscale-based expansionRely on funding partners(JV with Acumen Fund)Focus on 4As* andprice-minusPay-for-service modelFocus on process-drivenmodel (standardizedacross 180 processes)ensuring ease in scalingupAccessible choice oflocations closer to urban

slumsAwareness communityoutreach programsAffordability ongoingfocus on productivity,standardization and costinnovation across thevalue chain

Table AV BoP healthcare service providers in India areas of future consideration


Areas offuture

Belief in philosophy ofexpansion by self-fundingCentralized decision-making.This inhibits the scalabilityand diversificationEye camps could reach 7-10

percent of the needypopulationRetention of core resources skilled doctors andparamedical staffHow to undertakegeographic expansion?

Government support forfinancial incentives, taxsubsidies, resources formedical training centers, orpublic land for constructingnewer medical facilities

Lack of adequate number ofskilled manpowerNeed for micro-insurancecoverage and governmentrecognition of private sectorfor availing governmenthealthcare schemesFunds for expansionHow to undertakegeographic expansion?

Prices are still unaffordablefor the poorest of the poor the bottom 30 percentRetention of core resources skilled doctors andparamedical staff

Lack of financial andinsurance tie-ups to helpeconomically weak patientsLack of government supportlike RSBY health insurancescheme for private treatmentLack of finanicial viability ofextending the portfolio ofservices like dialysisHow to undertakegeographic expansion?

Lack of adequate pool ofskilled manpowerDecision to scale-up orscale-outAvailability and choice offunds for expansion

How to undertakegeographic expansion?How to reach the extremepoor, whoare unableto pay?



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About the authors

Dr Mark Esposito is an Associate Professor of Business and Society in the Department ofPeople, Organizations and Society at Grenoble School of Management in France and hasbeen a member of the faculty at Harvard University since 2011. He is the founding Director ofthe Lab-Center for Competitiveness, a think-tank affiliated with the microeconomics ofcompetitiveness network at Harvard Business School, which studies competitiveness as abottom-up approach towards the creation of equality in society. Through the Lab-Center,Professor Esposito has worked extensively on the topics of the creation of prosperity andsustainable business practices. He is a fellow of the Center for Business and Sustainability atAshridge Business School as well as a member of the visiting faculty for the University of

Cambridge Masters in Sustainable Leadership. He is the author and co-author of eightbooks and more than 20 published case studies, and is a regular guest editor for academicjournals. His academic work appears regularly in Academy of Management, as well as inHarvard Business Review. Mark Esposito is the corresponding author and can be contactedat: [email protected]

Dr Amit Kapoor is a Professor of Strategy and Industrial Economics, ManagementDevelopment Institute (MDI), Gurgaon, India. He is also an Honorary Chairman of Institutefor Competitiveness, India and Affiliate Faculty, Microeconomics of Competitiveness,Institute of Strategy and Competitiveness, Harvard Business School. He holds a PhD inIndustrial Economics and Business Strategy and has received the ESSID Scholarship andMIT DCA Scholarship and Ruth Green Memorial Award. He is also a reviewer with Academyof Managementand Case Research Journal. Prior to his appointment with MDI, Gurgaon, hewas with IIM, Lucknow, the S.P. Jain Institute of Management and Research and has alsobeen Chief Economist with Datamonitor plc. His research interest lies in the fields ofenhancing competitiveness, competitive advantage and leveraging technology for success.He is the author of the India City Competitiveness Report and the India StateCompetitiveness Report. In addition he has written numerous cases, memos, reports,articles in academic journals and popular media publications.

Sandeep Goyal is pursuing doctoral program in Strategic Management at the ManagementDevelopment Institute (MDI), Gurgaon, India. He holds a MBA and a BE (Computer Science)and is a Techno-Management Consultant having over 14 years professional experience inthe IT industry. He is certified in Six Sigma (Black Belt), PMP, USA and IT servicemanagement (ITSM). His research areas include understanding the design andimplementation of business models, primarily at the base of the pyramid in emergingeconomies. His research has been published or accepted for publication in journals such asStrategic Management Review, International Journal of Trade and Global Markets, Journal ofCompetitiveness & Strategy, Research Journal of Economics and Business Studies andEmerald Emerging Case Studies. He has participated, submitted papers to and organizedworkshops in international conferences such as the IFCs Asia Competitiveness Forum(April, 2012), the JKPS Conference on Creativity & Innovation (February 2012) and the LKYSchool of Public Policy Conference (October 2011).

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