r~C:!il.on room in Nova Medical Cenrnai'! ala Layout in Bangalore resern"""",v,lru a. modern bank. No nurses running around, no smell of disinfectant, no noise of ambulance sirens, no pieces of medical equipment. in the calm atmosphere, Erodebased textile entrepreneur C. Ramesh Kumar. his wife Vma and his parents wait a little nervously. Kumar's two-year daughter Lekhashree has stifflegs. The family has travel1ed 300 km to consult Dr Gautam Kodikal, a renowned paediatric orthopedic surgeon with Nova Medical ~Acast for two weeks and follow-up physictherapy for a few months will correct her problem. There is no need for surgery" is Dr Kodikal's prognosis. The family heaves 3sigh of relief Ne.\.'1year, if at all Lekbasbree and her parents need to consult Kodikal (or doctors like runt), they don't have to travel all this .. ay. :1"ova v is planning 11 centre at Coimbatore, less than two hours drive from Erode. Nova represents a new breed of emerging healthcare firms leveraging the booming prosperity of India's 250~ plus small towns and nearby villages, People in these places no longer need to travel to faraway cities to access quality is at their doorsteps, and at lower costs. Nova has set up six centres in Bangalore, Delhi and MlWlbai ill the past four years, and plans to start 10 new ones: in Chennai, Hyderahad, Pune, Ahmedabad, Kolkata, Jaipur, Kanpur, Coimbatore, Mangalore and Koehl within the next two years, 51iys Dr Mahesh Reddy, founder and executive director. Each of these day-care surgical hospitals, which offer not-so-complex surgeries, will cost about Rs 8-10 crore, In big cities, they cost several crores more. "Surgery at Nova costs only one-fifteenth that of hospitals in the UK, while it offers the same quality and standards of care,~ says Dr Nasser Ahmed, specialist registrar in emergency medicine at London's Kings College Hospital, who brought his 60~year-old mother,

the Nova: Centre in Bangalore.000 additional hospital beds each year. cl1airmanofApollo hospitals.incentives." says Prnthap C. Reddy pioneered the concept of OOrpoI'"te hospitals in India in IgS4. and are putting their mind and money behind it. and be able to provide services at FORTIS Healthcars an affordable price.lS Smaller-tcwn Tier~l cities hospitals. a·fa.OOQ crore per year for a period of 2-3 years" is 25 such hospita lsi 11 TWO APPROACHES. JayaKumar 'Naseezn Unnisa..000~50.3. liThe target of about R545.OOQ people. Bl1! good business too Tler-2&3tilles 150·2 OJ] More tlian250 One week RsIiD.. It Deeds 100.hospitals Hospitals: Already p.g· beds pel'l. espertise or technology.Q. Is the model profitable? Hea1thcare.ct health care companies to semi-urban and mral'India.resent in lier~2 towns" fiv.B. Indiaha's.hanoveting with new healthcare dem.. at an investment SHlV1NDE. They ere. especiaIly beyond basic primary care. and quality heal th care in smaller towns will he the main feature of the business in future.e key ]]6$ in being able to develop the appropriate business model.Reddy. Th. MANAGING bIRECTOR.tvestment and a pa- it Fortis Mode'l: 150~250 bed sp.~he demand and supply gap in healtheare in India is huge. Tax. medical. buildings and staff. Some: think. TWO MOD!E.steneturn onil..IN SMALL TOWN FOR BIG BUSINESS As demand and the by . lower cost cf'lead.:!!O laklls/b ed More tllan21i par cent Ab out five years About 20 por celli 8AUGgsT~Oll 2-3 days Leu tfianRs50 lakh/lled --~--- Aboul 50 per cant Ab 0 ul 3-4 yaa rs ~------------ ------------..eci"alty . is not cheap. fbi' knee replacementsurgery at. Neither is equipment. Aboll140per cent 31 llUSINESSWOI\LD .it is doable.e Ilospita'is coming uJI in Tier·3 Plan: 25 more 'hospitals in two years • ability to pay grow" small-town medicine is becoming big in India tient population that ean pay attra. eornpared tq aglebal average of3. Big Dads B~anch 'Out . designed to meet specific needs.R SINGH.ery formats and low-cost models that overeome geographic and economic barriers.

cbiefml. Max Healthcare. started by Dr Charudutt Apte.. the chain.i:e \'{l:)hlocai up hpspital. Karlmnagar. Vadodar. Manipal Hospitals (more than 15 hospitals).gra.And Small Players Pallow .the largest hospital chain in Mahar-ashtra. «Our Reach projects are in Karaikudi.gays ervea Ahmed.:based Aquarius _and TIer-a towns. patients Hospitals:.000 beds.. has attracted private equity mvestnient from Aavishkear..for nr~ e. and then expand countrywide:' says Aswin Naik. is alsoeyeing smalltowns .l. wbich is constructing two super specialty hospitals at Shalimar Bagh in Delhi and actDehtadun.•Nashik and iEYiE.g:ht super-s:peciaUy .ls .Std identitY. Vaatsalya of Bangalor-e (n hospitals in two states) are also espanding to small towns.. Ranchland Siliguri.rketing Gfficer. a.fl.lent p00Larrd doctors:' t In Gujarat.COFOUNDER s CEO..and rural areas.t. Gulbarga and Shimoga in Kamataka and at Vizianagaram.a.. "We also ·t. 1Q AJAY SHARMA.l chains such as Gare Hospitals of Hyd-er.J cities with enough of'aa affiuent population._r Mod'eh :Publicprivate :partnership Hospital. Lucknow. '" . each with an investment of over Rs 120 crore.hospita.COrOUNDER s centres ami CHIEF at much lower cost<.rector orFortis Healthcare. They have a low-cost hospital brand (Apollo Reach) ·and each project has 150-250 beds and multiple specialties.. which runs eight . Reddy.R!'Jspitals hasemerged as a major chain. P'ortisadded 250 b-eds at Moradabad inUttar Pradesh and at Raigarb in Chhattisgarh..60 more..ultispecialty 'hospitals at Bhatinda and Mtilial'i in Punjab Hsalthcare MAX Imr~~~limll!!lil!jtllililill~! .. who ran a 16-bed neurology centre in Puae from 1994 . Koobi... Rhas 11 secondary-care.8ter:ling. .next two to three years.E. CEO of Max Health" two years to focus only on small t._Ahmeaabad and Gwalipr. Apollo plansto set up 50 such hospitals inthe Ioag run. "Small tewns ana vdllages with "Wealth fromegrieulture and allied industries are part ottbe growth sttlry.JATGOEL Qeft).owns and nearby villages. Pone-based Sahyadri Hospitals . says Vishal Bali.000 beds.s: . Lik~ big players." saysGoel "We wanted the next 10 year:s.. Navi Mumbai . regiona.inDelhi Plan: Large m. says ShiVinder Si~.DlCAL Gnrgaon and atPeenyain &angalore. Narasannapeta and Oagole in Andhra Pradesh. Gadag. Oasis Fund. and two hospiW&. AND Model: . CEO of Fortis Global Healthcare. There isJittle doubttilat the propositions are bankable. 1'01'.. with multi-specialty tertiary care hospitals in Ahmedabad.The chain. bas. centres . Apollo Hospitals Group. Chittoor.Aff·ordable eye care far rura. . notes a eU-McKinsey study. The target is 25 such hospitals over the .. Hassan. Mysore. will add seven new facilities· with 2.. "We will add 30 hospitals in five states in three years.super specialty hospitals in Delhi withabout 1.hospitals in Hubli. Karnataka I\lld Tami] Nadu. Plans are afoot to ada 500 beds this year at 3-5 more hospitals in Pune and the Marathwada region.hospitals:at Pune. with 56 hospitals and over 8.. Vaatsalya. .-agar. ner-a cities are transforming into TIel"-2 cities <!Ddsmall towns are becoming 'fier. Apollo. Seedfund and ma. besides secondary-care setup in '~1V1AX...~ Fortis.nagi. says Devendra Dabak. executive director.200 more beds soon .ad0-1 hospitals). Started six years.Ei.c()founder and directer. Veerendra Hiremath. Rajkot and Bhavn. focusing on Aadhra Pradesh.ngdi.10 .200 beds. is building most ants-neW projects in semi-urban.lRECTOR around Delhi Plan: .Q in RA. Mandya. ~These two facilities are being set up in public'-privatErpactDershipj we wilhba:re revenues with the state govermnentand will oft"er. ' 1-1 ~6. "vitll over 1. ago by Naik ana.~ says Ludhlana. Bijapur.b. is setting up two soc-bed multi-specialty hospitals at Bhatinda and Mohali in Punjab. Vaatsalya claims to be India's first hospital network focused on 'll. Raiehnr.50: . manP aging director now a chain with 54 hospitals. Maharashtra.. In the third quarter of fiscal20IO-ll.

and the business is attracting players not normally associated with healthcare. Reasons: fear. Patients from villages and small towns generally do not like to travel far to strange cities for treatment. Care Hospitals . In the 2008 budget. most of them based in towns such as Musbeerabad.. but with adequate infrastructure. says the chain plans to set up eight ho spitals this year. Damedaran and Sabahat S. like Apollo.models or create innovative ones to meet demand. Set up at a cost of Rs 1-1. Aziro. Bhubaneswar and Smat Started in 1997 by cardiac urge on B. A single facilitycan unlock the potential in that town or a TIer-3 city: says 'Bali.NOVA Model: Affordable daycare surgical centres Hospitals: Six centres in Bangalore. the 8 A1l"~GuST 2~1I 33 BUS!N'ESSWORLD . Lower 0 erall costs are a big incentive.5 million in 2006 in terling. bill of care's patients are middle class. Instead.will have libuut50 beds with operation theatres and multi-specialties covering at Ieast az diseases. Each hospital. the need for family support and financial constraints. along with other investors. Coimhatore or Ludhiana. which is promoted b Sterling AddLife India.'ill employ 13 doctors and more than 60 paramedicalstaff The hospitals are expected to break even within a year of operations. Nagpur.with an investment of about Rs 3 crore . Apollo experimented with a hub-and-spoke model ofsecondary and primary care facilities insemi-urban and rural towns. Azim. Each hospital ". Here. specialty hospftala seem to have found ways of doing business profitahly.Bengd b~16 June.lying profitable. This acctJunts for 95 per cent of all ailments. Vizag. says Bali. While the opportunity js large. Eye-Q keeps its costs down by renting facilities and sharing revenues lead to profi:ts.Sebi chairman M. "Full-fledged tertiary-care facilities are available in Bhubaaeswar. 11 secondary care hospitals [0 AndhraPradesh and Karnataka Plan: 30 more in flvestates in 3 years Centre offered a Ave-year tax exemption to any new hospital opening in urban agglomerations. Its team include former. Consequently. ustng a low-cost model. Glocal's tl. 40 per cent from villages. to promote the development of hospital services in under-served urban and rural areas.5 crore per facility. "Private equity firrn Actis invested $ eye-care specialtycllain1hat:. Raipur. Soma ltaju. Glocal thinks volumes will Vaatsalya Healthcare VAATSALYA Model: Focus only on small town and rural areas Haspitals. apart from the six metropolitan areas. Out oftbem. aformer civil servant. and-will escalate dramatically to 100 next year. each of these centres gets 100-150 patients a day. they opt for the best secondary treatment available inthe neighbourhood.sel up 10 hospitals outside Delhi since 2007 in partnership with eye specialist:s. The New Bu!dness Model Take:Eye:--Q.has a dozen hospitals. while st. Other have even bigger ambitions.rst hospital was inauguratedst $onamukbi in Wes-e. A new chain. FOUNDER - " "We plan a which model in prominent Im~IIII!II!tmmmmll1tlllmltl $USHwaRATA DAS doctors travel to other centres" Mundra SEZ and. Glocal Healthcare plans 2.Adipur. It will set up 500 such hospital in other states in tlie phase to follo' . Koehl. Vijayawada. It also bas a satellite centre in Mehsana. Experts predict this model and public-private tie-ups-will increase aecess to secondary care in the top 2002-50 towns. Delhi ami Mumbai Plane 10 more in two years Medical NOVA MAHESH REDDY.. is a very brg factor. for most patients. hospitals will bave to adapt existing business. but patients in TIer-2 and "fier-3 cities are not able to-pay as much as those in Tier-l cities and metros. Pune. Trust. and another 25 per cent come from lowa:_-iILcomegroups. onlyfhrse out Qf H) patients use quali ty healthcare. CEO of Gleeal.000 hospitals in rural areas. in cardiac cue .specialists. Pushe And Pulls 'Iax incentives also _attraot healthcare providers to go beyond metros.

ment..r instance.Chains such as Fortis invest only Oil medical and other equipment.60-90 lakh per bed.with the 2-3 permanent and 2~3 visiting specialist doctors working at each centre. co-fennder and CEO.which aduall. Sing1especia1tychains are flourishing for ailments suchas kidney stones. cosmetology. and managing director. keep its rates as low as about Rs 4.6 per rent and return per employee is about 20 per cent fur APOLLO Hospitals MOldel: 1~". which will help increase the area SllttOunding villages. vasan e)le care ® at Model : Eye-care specialty Hospitals: . This. cosmetology." says Rajat GOO. but Vajian has more than Rs 5QO arore annual revenues. Advisors. While the established chain brings its brand.and expand the semi-urban and rural hflSpitals focus on simple surgeries. Teamio:gllp wi1l1 established local doctors and hospltals is another strategy."That is about Rs 15. Kerata and PUdllcherty." the first five yearn of operations.'orld. etc. is replicating its successful model in dental clinics (now IS) asweU . It has already raised money from -Song. Like Nflva. ~Fromthevery beginning.and drug-maker Unimark's cancer centres are some optical stores and lll'Ology.u:ai's Aravind Eye Hospital and Chennai's Sanksra Netralaya.M." says Mahesh Reddy of Nova Medica1s.says Arun. of these will entail in'\lestmen. and RaCE is about 50 per cent al1Greturn per employee ill about 40 per cent . ehairman..a. It will soon start specia1ties in infertility treatment..I1S per)'ear on h~thcare... or even higher: "We are thinking of a model in which preminent doctors travel to other centres . Vasan.000 and Rs 5-0. and is planning another fund-raising round. for instance.000 in a block .Apollo Hospitals" too. EYe-Q. . Some of its eentres conduct: 12-20 surgeri. condom-maker Hindu stan Latexs (now HLL Lifeear:e)mother-and4i1dcare hospital chain Life Spring.erere per facili-zy. says Anm.dy.'" says Azim."We plan to add so eye-care hospitals in NO years to have a pan.001"Vasan Rye Care elainrs to be the laxgest eye-cate netwerk in thev. eight hospital.x requires only half"th at cost:" Wtll-pa:tients bite? Glocal . Karnataka.Aruu. Started in Trichyin 2.Vasan Dental Care." says A-II . Big A treat- Getting The Economics Right Most facilities planned in 'Iier-2 and "Iier~S cities are lSO-200-bed seooadary-careeentres. Instead of oomplex surgeries that increase average length of stay. Theyare treating maxiinrim namher of patients to increase capacity Ilt:ilisa:tion.a day. The breakeven period is about 3-4. atabout 37 per cent of tbeproject cost in its light~asset model hospitals. optical stores. which hikes average revenue-per bed. "Om studies show thata villager spends Rs l. At N~ most patients undergoing surgeries are dischar-ged the same day. CHAIRMAN&: "We will soon enter infertility MD.s with l' 50- -m HDspitals: Already in Tier-2 cities.Rs 2. whereascotporate hospitals charge anywhere between Rs 30. An urban 200-bed hospital needs an ia\'eSt~ men! ofRs . infertility and even canceraare.plans to). with an 'asset-light' model.fb. Andhra. say experts.2 2nD !beds Apollo Reach hospit3'I. up 60 more hespitals in the next two years an investment of about Bs 1'20 erore.tsef about . a PE firm. loc-al doctors provide patients they ha(vebean1:rea:tingfur m8IlYYea.. Chains in 11e1'-2 and TIer 3 cities limit investment 10 Rs 50 lakh per bed. years.About 80 hospitals across south Indi'a Plan: 50 more in two years.. Continental Group's Integrated Hospital CentreS (IHe) near Hyderabad for dialysjs.200 for a normal de-livery. EaCb. in the face of competition with organised eye-care specialists such ~ Madl. says its managingcfuector PreeWa Red.5 crore perannam by a population of140. and has been growing at over 100 per cent annually for the past three ysars. is planning day-care surgical centres. to Sa1ern or Coimbatore from Bangalore =-ence or twieea week. The superstar of eye care Chains is Vasan Eye Care of over 80 eye-eare hospitals spread across Thmil Nadu.ARUN.scDming up Plan: 50 Apollo Rea.!oh'hospitals in the longrun 'cha-ins -Illor:e tban haIfa! Apollo and Fortis SAUGUST 201134 B·IJSlNESSWOlUJ) . systems and investment. we wanted refocus only on small tewnsand to servi. Its return on capital"employed (RaCE) is about 2.India presence. aims pan-India presence VASAN Eye Care A.

quality healthcare is spreading . a consultancy far hospital developers. it is now available in ctherdevelopmg eeuntries." says Vivek Desai... pilot project in Andhra Pradesh to.. hospitals thllOugh long-term contracts rather thaII Modal: Partnerships and IJWll She was 20~ weeks pregnant and was horrified a:t the thought of travelling all.l'. Hosmac advised the Andhra Pradesh . Sabyadrll . is also changing. toe. as earlier most ef the patients had to go for cost. Largediagnestics fu::mS sueh as Roche.But in three months. jewellery stores. fee raaging from Rs 250 to Rs 500. about 30 per cent of the:registrations we received w~r. .000 calls Were made to Apollo's Medical RespOnse CenUe. or i~ for SlOw sioo. factory in Goa making low cost X-my machines. we got over 1.ita.lyprl- MediAnge. a r paediatric urologist.OOO-bedmedical college hospital nonnally does 50-70 computed tomography (C'r) scans. Patients can . Indigenonsly developed and cJ.8 DO_GJ_QRlS~ON11~ I Despite the successes" reducing the cosrofiavestments on diagnostics equipment and. A 1. who conceptualisedlvIediAngels two and a half years age with co-founder Arbl uder Singal. 200. choose Indian specialists at a consultation.5 Bali. GEHealthcare. Bangelore-based Healthca:r. GE Healtheare.India.Ilatia.e frQll1 mraland semiurhall<al'eas.m.Bengal Plan: 2. as juniors to established super specialists. Mediangels claims to be the world's :fu. for instance ~ also manage.nal speeiaJ- "This modelbelped usbring down costs fur patients as wellas meet demand. and is developmg a roadmap for seven . moretban . "They find it easier toestablish themselves as the best doctors in their towns than working in a big hospital in metros. and Qifers a pallel of 30Q.rr required. Alree! and Idea.1 blie sector companies that built townships wit11alJ facilities in remote areas decades ago. along with a group of radiologists.hospitals. and adllises paUents 1'101 SMS on managing lifestyles.~ says Bali.ges of Kurncel. theotber challenge.500 ktn away..And someare trying. supplies medication and lab tests. intel'. saf. Mrs Raju.whlch offers healtheare tips to patients througba panel . Johnson 8< Jobnson oifer expensive equip ment -on a rental basisand on long-term installments. a well-known plastic surgeon.India and abroad.'sto'l. started three months ago . ".. food courts and multiplexes.Jle. HelP came in the: form of a healthcare portal MediAnge.swelling W'IIS deteeted in both her lcidneys. aging manpower constraints remain major challenges in taking healthcare to rural and semi-urban India. It-provides expert opinion. Siemens has a.mject. especially in north-eastern states. A few weeks agO.eom helps you monitor blood sugar levers. wife of a wealthy businessman in the latest initfatlve from Apollo.500 registrations. specialists ~d: super speeialists from 22 countries across 85 speclalties and sub-specialties. Vizag and Warangal.000 hospifalsj 8 in pilot phase this year Healthcare YO_U.RI scans a day: LOGGING IN TO HEALTH CARE CheenyKum.m·Health." says Shame. But for now. founder and managing director of Hosmac .states to experiment with public-private tie-ups to take health care to remote areas.s forseanning. we did not espeet any revenues in thefust year of operations .. is implementing a.barashtra Hospitals: The larg'est chain in Maharashtra with 10 hospitals Plan: 500 beds in 3~ 5 hospitals this year OUt rich small tol'. run tIlfoUgn 'its arm Hea:lthnet Globa'l. in g AcUGUST 2011 35 8USINBSSWORLD .m...eMa.lsin'in Bankura" W. "This being a revolutionary new concept in healtheare.HYADRI Hosnltats vase faciHtie. Emergency Ilealthcpre ·consul:tanqy through m'ot. offer cheap scanning services in the medical e911e.stingin assets.ofdoctors.ealtucMe sector can replicate the model of p1.government on this p.. the 'e-patient' sitting at home will be directed by the specialist Sitting in Australia or the US to go for diagnosrics tests at a nearby pathology gtobal e-ho:spHal.1s another example of e-healtheare witb many followers from rural and semi-urban India. 'Manpewer. uAmaziI!g1y.nlsed niedieal equiprireutcan bring down (.:0815.ts has tie- OUCKED~CheenyKum lounders Anki1 Khambhati ·(Ieft} and Viral Shah ups With 2-11000 aecredited patl~olcgy Iabocatcrlea it. n til e past three mOnths." The h. claims its co-founder and director Debra] Shame. the 'Way to Hyderabad.'llS ~ along with malls. Andhra Pradesh was advised by her local g)11laecolegist togo to Hydsrahad for an expert opinion . from Latur ill Maharashtra to remote villages in UP and Bihar: says Shame. Healthnet Global.ialI)-pest gradlUlte.. which employs aooul40 doctors". and half that number ofM. plans to offer heaithca re censu Itancy over mobile toover 300 millien subscd bers via thIS. says Charles Anfony •. rust sold in rudia. whether there are townships or not.gic:.jayokumar@ahp . pb. based on basic medical records and opinion of doctors sent across as e~61es. Rlgbt Co1lDaCtloas GtOCAl Model: Minimum investments wilh maximum fa·cilities in rural areas Hosllitals: O.stndents coming to hig cities now lVant to go back and stay in their native towns. in a pnblic-ptivate partnership.. who is now based in Mumb.

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