You are on page 1of 16

NEW TECHNOLOGY APPLICATIONS, DESIGN & BUSINESS MODELS PROJECT: TELE-MEDICARE

PROJECT REPORT

SUBMITTED TO

Prof. Rakesh Basant, Deval Karthik, Bhavin Kothari & Jignesh Khakhar
BY Jay Prakash Nikhil Sarode Snehal Somkuwar Snehshikha Gupta

DATE OF SUBMISSION: AUGUST 6, 2012

CONTENTS
INTRODUCTION ............................................................................................................................ 3 What is Telemedicine? ............................................................................................................... 3 Types of telemedicine ................................................................................................................ 3 Applications of telemedicine ...................................................................................................... 4 Technological evolution of telemedicine .................................................................................... 5 Current status of medical care in India ....................................................................................... 5 Telemedicine in India ................................................................................................................ 6 Gaps and opportunities .............................................................................................................. 7 BUSINESS MODEL ......................................................................................................................... 8 Product and services .................................................................................................................. 8 Target segment .......................................................................................................................... 8 Value proposition ...................................................................................................................... 8 Market size .............................................................................................................................. 10 Pricing ..................................................................................................................................... 10 BUSINESS DESIGN REQUIREMENTS ........................................................................................ 10 Application interfaces .............................................................................................................. 10 Application workflow .............................................................................................................. 12 CUSTOM DEVICE ARCHITECTURE ........................................................................................... 13 BOOTSTRAPPING THE BUSINESS ............................................................................................. 13 REVENUE PROJECTIONS ............................................................................................................ 13 REFERENCES................................................................................................................................ 16

INTRODUCTION
WHAT IS TELEMEDICINE? The World Health Organisation defines telemedicine as The delivery of healthcare services, where distance is a critical factor, by all healthcare professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for continuing education of healthcare providers, all in of advancing the health of individuals and their communities. Thus telemedicine helps to eliminate distance barriers and provide medical services that are not consistently available to people rural areas or distant areas. With remarkable development in telecommunication and information technologies, it has become possible to enable communication between patients and medical care providers as well as transfer medical images, records, outputs from medical devices, sound between distant locations. TYPES OF TELEMEDICINE Telemedicine can be broken down into three types Store - and -forward: The medical data is captured and transmitted to the medical staff at a later point of time so that it can be assessed offline. Medical fields like dermatology, radiology are typically ideal for implementing such asynchronous telemedicine. Remote monitoring: It enables medical professionals to monitor a patient remotely using technological devices. It can be used typically with heart diseases, diabetes, asthma etc. Interactive services: It enables real time interaction between patients and medical staff using phones or online communication. Activities like history review, psychiatric evaluations, ophthalmology assessments etc can be carried out using this type of telemedicine.

APPLICATIONS OF TELEMEDICINE Telemedicine can be used in a variety of medical applications

FIGURE 1 APPLICATIONS OF TELE MEDICINE

Second opinions: In complex cases, the treating doctor at the remote site can interact with a team of specialists in another location for accurate diagnosis through use of telemedicine. The patient can himself/herself also take second opinions through use of telemedicine. Disease and disaster management: In case of natural disasters like earthquakes, where medical facilities cannot be quickly set up, telemedicine can be used to provide medical help in a timely manner Remote consultation: Telemedicine enables providing consultation in remote areas where full-blown medical facilities are not set up. In rural areas where medical institutions and practitioners do not find it profitable to set up medical facilities, telemedicine can play a big role. Only consultation is provided and if necessary, specialist recommendations are made. Continuous Medical Education: Telemedicine can be used to spread awareness related to health and medicine. Telementored procedures: Specialist can guide surgeons at remote site in carrying out complex procedures.

TECHNOLOGICAL EVOLUTION OF TELEMEDICINE

FIGURE 2 EVOLUTION OF TELEMED ICINE

Generation 1: Early efforts of telemedicine can be traced to 1920s when audio and cable television technologies were used for consultation. At that time, radios were used to link the physicians on the shore stations to assist ships in the sea for medical emergencies. ECG transmission over telephone lines to record cardiac activities was also achieved during this period. Generation 2: NASAs efforts in telemedicine began in 1970s when paramedics in remote Alaskan and Candian towns were linked to town or city hospitals via satellites Generation 3: Use of digital compression and transmission technologies using T1 or ISDN lines allowed for point to point interactive videoconferencing and transmission of o heart rate, respiratory, circulatory and other physiology related information. CURRENT STATUS OF MEDICAL CARE IN INDIA Indias population is growing at a tremendous rate and its healthcare infrastructure is unable to meet the growing demands. When compared to other developed and developing countries, India spends significantly low (less than half the global average in terms of percent of GDP) on healthcare. India has an average 0.6 doctors per 1000 population against the global

average of 1.23 suggesting an evident manpower deficiency. Furthermore, rural doctors to population ratio is lower by 6 times as compared to urban areas. Most of the doctors are concentrated in urban areas. Around 74% of graduate doctors work in urban areas that constitutes only about a quarter of Indias population. With current number of medical colleges in India and the number of doctors graduating from them each year, we need 600 more such colleges to attain the global average doctor to population ratio. The geographically the distribution of these colleges is also skewed, 61% of them being present in only six states. This adds to the disparity between healthcare facilities available in different regions of the country. TELEMEDICINE IN INDIA Major support for telemedicine in India is provided by the Department of Information Technology through ISRO and medical institutions like AIIMS. In private sector, Apollo Hospitals, Fortis etc are also in play in telemedicine. ISROs telemedicine pilot project was started in the year 2001 with the aim of introducing the telemedicine facility to the grass root level population as a part of proof of concept technology demonstration. The telemedicine facility connects the remote District Hospitals/Health Centres with Super Specialty

Hospitals in cities, through the INSAT Satellites for providing expert consultation to the needy and underserved population. Presently ISRO connects
FIGURE 3 ISRO TELEMEDICINE NETWORK IN INDIA

around 306 rural/remote hospitals to 60 super specialist hospitals. Apart from connecting the health centres to Super speciality hospitals for teleconsultation,

treatment and training of doctors, ISRO has set up connectivity for Mobile Telemedicine units for rural health camps especially in the areas of ophthalmology and community health.

While transfer

the

satellites

facilitate

of data

between the

patient-end and the doctor-end, there are other equipments like VSAT (transmitting and receiving station), video conferencing

camera, TV monitor, Computer, Hub/Switch required at both the ends


FIGURE 4 SATCOM TECHNOLOGY USED BY ISRO

to

facilitate

the

communication.

Cost of set up at the Patient End

FIGURE 5 COST OF SET UP AT THE PATIENT END

As seen from figure 5, a major chunk of setting up a patient end is accounted by the VSAT. Even though the costs of VSAT have been decreasing, it is still about INR 1.2 lakhs. In private sector also, hospitals like Apollo have employed similar technologies to enable telemedicine. GAPS AND OPPORTUNITIES The technologies currently employed for enabling telemedicine in India is largely based on satellite as seen previously. Even though the cost of equipment has been decreasing over the

years, it still requires funds in excess of Rs. 4 lakhs to setup the patient end. With innovations in tablet devices and telecommunication infrastructure (3G), it is possible to provide telemedicine service at a low cost. Low cost setup and operations would facilitate a quick scaling up of the telemedicine services to reach a wider mass.

BUSINESS MODEL
PRODUCT AND SERVICES The aim is to provide a cost effective way for teleconsultation. We will provide a platform

between doctors and patients who are seeking medical consultation remotely. It would help the patients to avail consultation at cheaper cost and doctors to earn more income. The platform would also help doctors keep better track of patient histories. The patients would have access to a wider pool of doctors to consult and receive quality medical services from doctors. The platform will also help patients to get medicine delivered through medical shops. We would also provide the integrated mobile device to people who would be interested in providing medical consultancy services to people. They would earn money by revenue sharing in fees earned from medical consultation to patients. TARGET SEGMENT The target segment among doctors would mostly be general physicians and less of specialists. The assumption is that most of medication consultations that can be provided remotely will need general physician, few consultations that will require specialists will be critical in nature, and in such cases the doctors will need the patient to be physically present for the treatment. The target segment among patients would those are suffering from simple ailments and can be treated remotely. These patients would need access to a mobile device, laptop with internet access or custom device to use the services. The target segment for custom devices would be rural shopkeepers or small businesspersons. They would be trained to use the device. As health is one of the key concerns of the government, they might use white label platform to improve health services delivery. VALUE PROPOSITION The value proposition for the various set of users is as follows:

DOCTORS:

More revenues: The application would allow doctors to reach potentially reach a larger set of patients using the platform who can communicate in the language understood by the doctor. The increase in potential market size would allow them to earn better revenues. Better accessibility to patients: Doctors will need access to mobile device and internet connectivity to be able to treat patients. Better accessibility to medical history for patients resulting in improvement in treatment quality: The platform would store the medical conditions and treatments provided to the patients. This information would be shown to the doctor next time the patient is being treated. Less setup cost for new doctors: The doctors could start their practise on this platform without buying any office space or setting up infrastructure.
PATIENTS:

Quick access to medical consultation: The patients who are suffering from minor ailments or who can be treated remotely can get medical consultation from mobile devices or custom devices nearby without having to visit the doctor. The service will also be used in emergencies to provide first aid consultation. Better medical services: The platform provides access to all the doctors present on the platform potentially and therefore provides better access than traditional method. This means that patients have an option to choose doctors for them and would be able to receive better services. The platform also provides their medical history to the doctors that aid doctors in diagnosis and treatment. Time and cost savings: As patients do not visit the doctor physically, they are able to save time and money. At times patients have to wait in queues to meet the doctor and this can be avoided on the platform. Additional services: Patients can also get home delivery of their medicines by contacting medicine stores.
CUSTOM DEVICE OPERATORS

They would get monetary benefits by revenue sharing.

MARKET SIZE The market size can be estimated using target segments. The total number of doctors in India is around 600,000 with the percentage of general physicians around 40%. Therefore, the market segment is around 240,000. The market size of patients includes rural population without hospital and a part of urban population. Only 44% of the Indian villages have access to visiting doctors and about 20% of the villages do not have access to any hospital. Therefore, about 25%-30% of the Indian population is the market size among patients including only rural patients. Adoption among urban population would be adversely affected by the loyalty of urban patients to their doctors. Patients loyalty depends on commitment, trust and satisfaction. Trust and satisfaction are affected by doctors reputation. Therefore, the adoption of the platform would be faster if reputed doctors are associated. PRICING Doctors decide their consultancy fees depending on their reputation, knowledge, experience and customers ability to pay etc. Therefore, doctors will fix their charges for consultancy individually. They would have the ability to charge different at different times but would be applicable for all customers. For example, the charges levied by doctors during odd hours may be higher than during normal work hours. The main source of revenue would be part of fees earned through consultation by the doctors. The doctors would be willing to pay the part of fees, as the service will ensure that they will be paid as opposed to the case where people can directly call on phone but may not pay. The pricing would percentage of the fees earned with a minimum fee that would be charged in case percentage of fees earned is too low to compensate for the costs involved in providing service. Typically the variable costs would be charges of the network, cost of providing infrastructure. The fixed costs would be cost of custom device provided in rural areas, marketing costs etc. The charges fixed by doctors would be for per 10 minutes. This is based on the assumption that the doctors generally do not spend more than 10 minutes on one patient in majority of the cases. The charges paid by the doctor would either of minimum fixed fee Rs. 10 or 20% of the total fees charged.

BUSINESS DESIGN REQUIREMENTS


APPLICATION INTERFACES

PATIENTS:

Login or register: The patients will have to login into the application before using it. Therefore, new patients will have to register before using the application. Their registration form would require their basic details such as name, age, gender, contact information, language preference etc. The registration for rural patients would be done with the help of device operator if necessary. The patient will get a unique ID and password after registration. The mobile device will keep track of registrations done to make it easier to login later. The login screen will display the list of IDs created on the mobile or would require entering ID and password. The password would be saved on the device that was used for creating the ID, in case the password is lost. Another alternative to login and password would be to use biometric identity like fingerprints to identify a user. But its success would depend on the accuracy with which the biometric device and software is able to identify the user. Consult a doctor: The patient on login would see a page to consult a doctor. This page would allow the patient to choose from the list of doctors already consulted and who are available or choose a new doctor. The page for choosing a new doctor would allow the patient to choose a fee range, range of location for choosing doctors etc. After choosing these details, the patient would be shown a list of doctors available for consultation. The patients can then have a video chat for medical consultation with one of the doctors after payment. The patients can also choose doctors from the list of previously contacted doctors which would be arranged in chronological order and are available for consultation. Payment for consultation: A patient would have to pay before they can consult a doctor. An urban user would be able to pay online. Rural patients would have to pay the money to the device operator for consultation. Medication summary page: This page would be shown after the medication consultation ends with the doctor. This page would show the medicines and diagnosis details.
DOCTORS:

Register and login: The doctors would need to register and verified before they can provide medical consultation to patients. For registration, doctors would need to fll details of their education background, experience, languages spoken, contact etc. The

doctors would be charged for verification fee for the verification process. After registration, doctors would be provided login and password for the the application.

Patient Consultation: The doctor would get a notification asking them to accept a request for consultation. Once accepted, the doctors would be able to see the video and patient details. During the call, doctors would be able to take notes for diagnosis. At the end of the call, the doctor would give the prescription for the patient.

Settings page: The doctors would have a settings page where they would be able to change their consultation fees and schedule. The schedule can be shown to the patients if they want to consult a particular doctor so that they can plan their call accordingly.

Earnings page: This page would allow doctor to see their past earnings, current earnings and methods of receiving their payment.

APPLICATION WORKFLOW Medical consultation workflow: When the patient searches for a new doctor for consultation, the application would look up for matching doctors for the patient who are in the nearby locations and within fee range provided by the patient. Within the matching list of doctors, the application can select based on ranking of the doctors. This would be helpful in maintaining the quality of the platform. Once the patient chooses a doctor, the doctor would be notified to accept the consultation call. Once the doctor accepts the call, the video of the call would be recorded for security and legal purposes. If the doctor does not accept the call, the user will be able to choose another doctor. For providing the better experience, the application would track the doctors not accepting the calls and this would be included in deciding the ranking of the doctors. Doctor verification workflow: When new doctors register on the platform, a verification process is needed to establish of the credibility of the doctor. The doctor would have to provide the details of their educational and professional qualifications. A notification for pending verification will be sent to support personnels. The notification would be carried out using background verification services. If the

verification is successful, the doctor would be notified and allowed to provide services on the platform.

CUSTOM DEVICE ARCHIT ECTURE


The custom device for rural patients would consist of basic tablet with 3G connectivity and webcam. It would have the patient application interface and would support some basic application to such as heart beat measurement, body temperature etc.

BOOTSTRAPPING THE BU SINESS


As with any two-sided platform, this platform would face challenges initially in attracting doctors and patients. This would require incentivizing one side of users, so that they join the platform and the other side of users will join due to cross network effect. To attract doctors to the platform, the doctors would be waived off the educational and professional verification fees initially. Doctors would also get referrals benefits such as reduced platform fees. Patients would not be attracted unless doctors are available on the platform. To mitigate the loyalty of patients towards doctors, the application would need to attract doctors who would be able to win the trust of the patients and to provide satisfactory services.

REVENUE PROJECTIONS
Cost of centre: The fixed cost of the centre would be the custom device and the peripheral devices such thermometer etc. The variable costs of the centre would be 3G data connection costs. The 3G data connection cost have been calculated using the current rates, however the 3G rates would go down further due to price wars between various service providers. The calculation for the data usage using 3G has been shown in the Figure 6. It assumes that data usage besides video calls would not be significant.

Data usage summary Bandwidth requirement for video call(KB/sec) Total bandwith use per call assuming 10 min call(MBs) Monthly data use (GBs) Current average 3G tariff rates (per GB) Yearly data charge (in Rs.)
FIGURE 6: DAT A USAGE SUMMARY

50 29 1.2 250 3000

To account for extra data usage at the centre, the yearly data charge has been fixed at Rs. 5,000. The fee earned by the device operator has been assumed to be 5% of the fees received by the doctors. The summary of cost per centre is given in Figure 7.
Cost per center(in Rs.) Fixed Device peripheral devices Variable 3G connection Device operator commission
FIGURE 7: COST PER CENTRE

10000 1000 5000 5%

Cost of application: The fixed cost of application would be the cost involved in developing the software and device. The variable costs would be costs of the support staff and data server costs. The summaries of costs are given in Figure 8.
Cost of application(in Rs.) Fixed Software development Variable Support staff data server
FIGURE 8: COST OF APPLICATION

1000000 500000 100000

Revenue Projections: Revenue projects are based on following assumptions: o Number of urban patients visits in the first year will be 20,000 and will grow at the rate of 50% for the first five years. o Fee charged on doctors revenue would be 20% of their revenue. o Average number of rural patients per centre would be 500. o The number of rural centres is 1000 in first year and would increase at the rate of 50% in first five years.

o Average consultation fees of doctors would be Rs. 50 and would grow at the rate of 20%. o Tax rate is 35% and opportunity cost of capital is 10%.
Year Number of rural centers Rural patients visits Urban users of mobile application Urban patients visits Average consultation fee of doctors Total Revenues (in Rs.) Costs of center Fixed Variable Cost of application Fixed Variable Depreciation SG&A Profit before tax Tax Profit after tax Add depreciation Free cash flow NPV 2012 2013 1000 500000 10000 20000 2014 1500 750000 15000 30000 2015 2250 1125000 22500 45000 2016 3375 1687500 33750 67500 2017 5063 2531250 50625 101250

50 5200000

60 72 9360000 16848000

86 30326400

104 54587520

11000000 6250000 1000000 600000 2400000 6850000 -4050000 -1417500 -2632500 2400000 -232500 720000 2400000 8220000 -1260000 -441000 -819000 2400000 1581000 864000 2400000 9864000 4584000 1604400 2979600 2400000 5379600 1036800 2400000 11836800 16089600 5631360 10458240 2400000 12858240 1244160 2400000 14204160 37983360 13294176 24689184 2400000 27089184 7500000 9000000 10800000 12960000

0 0 -12000000 18739624

FIGURE 9: NPV CALCULATIONS

REFERENCES
Emerging trends in healthcare, KPMG, Retrieved on August 6, 2012 from http://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/Emrging_trends_in_heal thcare.pdf Health infrastructure in rural India, B. Laveesh & D. Siddhartha, Retrieved on August 6, 2012 from http://www.iitk.ac.in/3inetwork/html/reports/IIR2007/11-Health.pdf Human Resources for Health, Retrieved on August india.org/reports/hleg_report_chapter_4.pdf Indian Telemedicine Program: Marching Toward Transforming 6, 2012 from http://uhc-

National Healthcare Delivery System, R. Murthy & L. Satyamurthy, Retrieved on August 6, 2012 from

http://www2.telemed.no/ttec2007/presentations/session08_tuesday/s08_tue_1315_Abdul_OK .ppt Patient Satisfaction, Trust, Commitment and Loyalty toward Doctors , S. Norazah & S. Norbayah, Retrieved on August 6, 2012 from http://www.ipedr.com/vol10/94-S10058.pdf Telemedicine, ISRO, Retrieved on August 6, 2012 from http://www.isro.org/scripts/telemedicine.aspx Telemedicine in India - current opportunities and barrier, K. Varun, Retrieved on August 6, 2012 from http://www.iitcoe.in/index.php?option=com_docman&task=doc_details&gid=167&Itemid=2 0