Cloudphysician A Collaboration Between Man and Machine To Save Lives

Indian School of Business
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July 25, 2020
Rajesh Pandit | D.V.R. Seshadri
CLOUDPHYSICIAN: COLLABORATION BETWEEN MAN AND MACHINE TO SAVE

LIVES
October 2019 brought good news for Dr. Dhruv Joshi and Dr. Dileep Raman, the founders of
Cloudphysician, a healthcare start-up in Bangalore, India. They had acquired an important new
customer they had been pursuing for weeks. This was another big step towards their vision of
significantly improving patient care in intensive care units (ICUs) across hospitals in India. Joshi said:
“Today’s discussion with the promoters of the Pune hospital has proven again that we are on
the right track, even though the journey ahead for us sometimes looks arduous. It is worth the
sacrifices we have made. Finally, we are beginning to be able to prove to our customers the real
value that Cloudphysician is adding to their ICUs — saving precious lives. It took a first-hand visit
to our organization by the hospital’s founders to close the deal, which had been hanging in
limbo for over eight weeks. Based on this success and a few others in the recent past, I expect
that closing deals with other prospective customers will become easier and faster from now on,
facilitated by our growing reputation and positive word of mouth.”
Cloudphysician offered comprehensive remote monitoring and advisory solutions to ICUs of hospitals
across the country. Its primary target segment was hospitals in tier-2 and tier-3 cities and towns1
across India, particularly smaller hospitals. For a variety of reasons, most of the smaller hospitals did
not have the specialized in-house expertise required to provide emergency care in their ICUs. The
result was that mortality rates at these hospitals were far higher than acceptable standards.
Recognizing the massive unmet need of these hospitals, the Cloudphysician team had built a solution
that considerably enhanced the capacity and capabilities of doctors in charge of ICUs at these far-flung
hospitals.
1 The Government of India classifies Indian cities as Tier 1, Tier 2, and Tier 3 based on their population. Tier 1 towns and
cities have a population of 100,000 and above, Tier 2 a population of 50,000 to 99,999, and Tier 3 a population of 20,000 to
49,999. In highly populated cities, people pay more for goods and services. Source: https://medport.in/classification-of-
indian-cities/.
Rajesh Pandit and Professor D.V.R. Seshadri prepared this case solely as a basis for class discussion. This case is not intended
to serve as an endorsement, a source of primary data, or an illustration of effective or ineffective management. The authors
would like to thank Dr. Dhruv Joshi and Dr. Dileep Raman, Cloudphysician, for their support in developing this case. This case
was developed under the aegis of the Centre for Learning and Management Practice, ISB.
Copyright @ 2020 Indian School of Business. The publication may not be digitised, photocopied, or otherwise reproduced,
posted or transmitted, without the permission of the Indian School of Business.
This document is authorized for use only in Prof. Nandakumar M.K's Entrepreneurship & New Ventures(Sec B) at IIM Kozhikode - EPGP Kozhikode Campus from Jul 2021 to Jan 2022.
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More than a dozen paying hospitals were reaping the benefits of Cloudphysician as its customers.
However, customer acquisition was consuming a substantial amount of Joshi and Raman’s time, effort
and energy. While the value proposition that Cloudphysician offered to potential partner hospitals
was obvious to its founders, it was not clear why these hospitals were lethargic to embrace such a
compelling solution. Joshi and Raman were keen to unearth a way to shorten the sales cycle and
rapidly scale up the business.
INDIAN HEALTHCARE INDUSTRY
The Indian healthcare industry was riddled with paradoxes. On the one hand, India was among the
preferred destinations for healthcare tourism, attracting patients from developed nations seeking
complex procedures at a fraction of the cost of such procedures in their home countries. The leading
healthcare institutions in the country had state-of-the-art infrastructure and equipment, top
specialists and highly trained staff; their services were comparable to the best anywhere in the world.
On the other hand, the majority of Indians had little or no access to affordable, quality healthcare.
Indian healthcare faced three crises: (i) a crisis of affordability, where large sections of the population
simply had no access to quality healthcare; (ii) a crisis of preventive care, where the focus was on
treatment rather than prevention, and on tertiary rather than primary and secondary care; and (iii) a
crisis of credibility, where the public had little trust in the healthcare system.2 The expenditure by the
government on healthcare, which was about 1% of the country’s gross domestic product (GDP), was
among the lowest worldwide. 3 Healthcare in the country was dominated by private healthcare
providers, compounding the problems of access and affordability.
680 million Indians (about 56% of the population) were deprived of eight basic needs: food, energy,
housing, drinking water, sanitation, healthcare, education and social security. Among these, the
problem of healthcare availability was exacerbated by the disproportionate distribution of healthcare
services across the country. Tier-1 cities, which accounted for 100 million people, had 400,000 doctors
to cater to this population through private, public and university hospitals. Tier-2 and tier-3 cities had
a combined population of 250 million, served by 150,000 doctors through private clinics and district
and sub-district hospitals. Finally, vast swathes of India’s population, 850 million people living in rural
and remote areas, had access to a total of only 50,000 doctors across 638,000 villages. These
populations met their healthcare needs through private clinics; government-run sub-centers, primary
health centers and secondary centers; and hospitals funded by non-governmental organizations
(NGOs) [4,5] In short, access to affordable, quality healthcare for a vast majority of Indians was a distant
dream.
The foundations of critical care in the Indian healthcare industry were laid in the mid-1970s by Dr.
Farokh E. Udwadia, who developed the country’s first respiratory care units in two hospitals in
Mumbai — one at a community hospital and the other at a private hospital.6 The formation of the
Indian Society of Critical Care Medicine (ISCCM) in 1993 was another important milestone in the
development of ICU care. ISCCM held regular conferences and worked with educational institutions
to upgrade medical education programs including postdoctoral training programs to improve the
availability of quality talent in the area of critical care. Despite all these efforts, India had only about
200,000 ICU beds in 2014 for a population of 1.3 billion people. There were only about 500 qualified
2 FICCI and Ernst & Young. (2019, August). Re-engineering Indian healthcare 2.0: Tailoring for inclusion, true care and trust.
3 Mahajan, V. (2010). White coated corruption. Indian Journal of Medical Ethics, 7(1), 18.
4 McKinsey Global Institute. (2012, December). India healthcare: Inspiring possibilities, challenging journey.
5 McKinsey Global Institute. (2014, February). From poverty to empowerment: India’s imperative for jobs, growth and
effective basic services.

6 Prayag, S. (2002). ICUs worldwide: Critical care in India. Critical Care, 6(6), 479–480.
Cloudphysician: Collaboration between Man and Machine to Save Lives | 2
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intensivists to manage these ICU beds. There was a clear correlation between the availability of
intensivists at a hospital and lower mortality rates in ICUs. With the number of ICU beds projected to
reach 300,000 over the next five years, the shortage of intensivists was a serious concern.8
THE ORIGINS OF CLOUDPHYSICIAN
Joshi and Raman met at the prestigious Cleveland Clinic in Ohio (US) in 2012 while working as
intensivists9. Both had earned their undergraduate degrees in medicine from India and then moved to
the US to specialize in critical care medicine (see Exhibit 1 for profiles of the founders). At the
Cleveland Clinic, ranked among the best hospitals in the world, Joshi and Raman became good friends.
The hospital had state-of-the-art facilities and invested heavily in acquiring the latest medical
equipment. However, the duo discovered that even at one of the most advanced hospitals in the
world, technology integration in critical care decision-making was lacking. Consequently, the high
degree of dependency on medical professionals in the ICUs, unaided by technology, meant that the
number of patients each doctor could treat was not scalable.
Deeper reflection on this problem led Joshi and Raman to turn their attention to the state of critical
care in their country of origin, India, and other developing countries. Their analysis revealed the
appalling conditions under which healthcare was provided to the masses in these countries. They had
found their calling. “The need to fix some of the serious problems in Indian healthcare, at least in our
areas of expertise”, as they put it, prompted them to pack their bags and return to India. Once in India,
they spent the next 18 months traveling extensively across the length and breadth of the country.
They were particularly interested in visiting hospitals in tier-2 and tier-3 cities and towns, where the
problem of poor care was chronic. The situation that they encountered was more alarming than
anything they had imagined.
According to Joshi:
“We had always been interested in the intersection of technology and healthcare and how we
could improve clinical outcomes using technology. We noticed an interesting phenomenon of
widespread consolidation taking place in the industry in developed countries. The Cleveland
Clinic itself had grown rapidly through acquiring hospitals across the US, and more recently had
started its global expansion with a mega hospital in Abu Dhabi, in the United Arab Emirates. The
degree of maturity of these acquired hospitals spanned a wide spectrum with respect to both
their quality standards and clinical expertise. Despite their best efforts, expertise was still
concentrated in the parent hospital in Cleveland. Consequently, an inconsistent standard of
healthcare delivery across the network of Cleveland Clinic’s various hospitals was a major
challenge. Cleveland Clinic had begun to take tentative steps to centralize the management of
ICUs across the network by leveraging technology and deploying it to provide expertise from
the base hospital, where it was concentrated, to other hospitals in the chain, thus enhancing
the quality of care across the network. We were part of that ecosystem and had seen the
struggle first-hand.”
7 Philips Healthcare aims to cover 30,000 beds eICU in next 5 yrs. (2014, November 10). The Economic Times. Retrieved
from https://health.economictimes.indiatimes.com/news/industry/philips-healthcare-aims-to-cover-30000-beds-eicu-in-
next-5yrs/45094578
8 Ibid.
9 Intensivists are physicians specializing in critical care; they often work in the intensive care units of hospitals, treating
patients requiring complex, special care.
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Similar patterns of consolidation were unravelling in India, albeit with a time lag of about a decade.
The duo wondered if technology could be proactively leveraged to improve healthcare outcomes.
While world-class expertise was available in select pockets of large hospitals in the Indian metros, the
challenge was to figure out a way to make such expertise available to hospitals across the country.
Raman said:
“Interestingly, Cleveland Clinic had incorporated related infectious disease treatment into the
Respiratory Institute, which is not a norm in the industry. Such an approach allows doctors to
provide comprehensive care to the patient. They have mastered the art of integrating both
horizontally and vertically among specialties, in order to deliver better clinical outcomes.”
This approach was the trigger for Cloudphysician, which sought to learn from the best-in-class
environment of Cleveland Clinic and adapt it to the hard realities of India, where a majority of hospitals
had little access to specialist care. This was a general problem across most medical specialties, but it
was particularly acute in the area of critical care. Cloudphysician emerged from the recognition of this
healthcare gap. It sought to leverage technology to provide state-of-the-art expertise in critical care
to far-flung hospitals across India.
MOTIVATION BEHIND CLOUDPHYSICIAN
When Joshi and Raman conceived of Cloudphysician, there were several technology-enabled solution
providers in the critical care space in India. However, most of them provided bits and pieces of the
solution. This was because the founders of many of the technology start-ups in this space were pure
technologists, who were excited by the technology but had little understanding of healthcare. There
were few companies where the founders had both clinical expertise in critical care and technology
skills. The result was that often the technology stack was built by one entity, service delivery done by
a second entity, and outreach managed by a third. This configuration resulted in gaping holes in the
delivery of critical care, due to cracks at the time of hand-offs from one entity to the other. The idea
that the patient ought to be at the center of the solution was perplexingly missing. Joshi and Raman
saw both a need and an opportunity for a comprehensive approach to critical care that would deliver
better outcomes, keeping the patient at the center of the entire solution. This was the “blue ocean”
that Cloudphysician sought to capture.
Joshi recalled:
“During our education and training, we had observed these gaps. We all have our personal
stories where we look back and say, ‘We could have avoided a grave patient outcome if only a
comprehensive approach to treating patients was available.’ Modern medicine, although
replete with many miraculous technology-based developments, has become overspecialized
and costly, hampering the seamless delivery of patient care. Once we saw the integrated
approach working in Cleveland Clinic, we resolved that we should make it happen in India too.
We decided to develop a proof of concept of such an integrated approach by demonstrating
this approach in critical care, which is our core strength area. This was what drew Raman and
me to leave very well-paying jobs as doctors in the US to return to India. The challenges in India
are unique. They can be solved only by highly trained medical professionals who simultaneously
understand the on-the-ground realities and have deep expertise in designing and delivering the
needed seamless solutions, although they may have seen these solutions being implemented in
the very different developed country environment.
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In comparison to the fantastic healthcare infrastructure in the US, of which Raman and I were
a part, the Indian reality provides a stark contrast, whether it is in terms of bed-to-patient ratio,
doctor-to-patient ratio or any other metric to measure the efficacy of healthcare. The problem
is aggravated as we move away from the metros. Having discussed this issue threadbare during
our many one-to-one chats in Cleveland, Raman and I decided that we should do something to
address this problem, leading us to leave behind our comfortable lifestyles in the US. We
decided to plunge headfirst into the huge, unstructured, often dysfunctional and chaotic Indian
healthcare environment, which presented us with exciting opportunities to apply our skills. We
were driven by the vision of how things can be done better and thus create massive impact by
touching the lives of millions of people who have no access to any worthwhile healthcare. Not
many are as privileged as us to have holistic exposure to various facets of healthcare at one of
the best hospital networks in the world.”
Raman added:
Whenever we talked to the medical fraternity in India about the abysmal state of healthcare in
the region and how the existing solutions in developed parts of the world could potentially solve
the problems, their usual reply was, ‘You can never understand the real issues in India. It is easy
for you to make these comments, sitting in the confines of cushy, ivory towers of the developed
world.’ Such remarks would annoy me greatly! Joshi and I realized that we would never be able
to solve the problem remotely by sitting in the US and working with practitioners in India. Even
during our medical school days in India, professors would say, while teaching us about the best
practices in medicine from the developed world, ‘You know, this is the right thing to do.
However, it doesn’t work in our environment due to numerous challenges.’ Most of the
teaching literature originated from the West, and professors in India would teach the same
material to medical students. However, they would often add, ‘These healthcare delivery
models that work in the West won’t work in India’. These experiences created in the two of us
a burning desire to correct the prevailing abysmal condition of healthcare in the country. We
were supported by our families while we made this bold leap of faith. They believed in our
dream and provided a facilitating environment.
CONVERTING THE IDEA INTO REALITY
Preparation for the Launch
In the year leading up to their return to India, Joshi dedicated some of his personal time to
understanding the telemedicine field. He joined the American Telemedicine Association, attended
several conferences and enrolled as a member in professional networks that helped him to develop a
wider understanding of the technologies, medical expertise and business models in the field.
Raman, meanwhile, studied technology-enabled healthcare experiments being attempted in India by
talking to numerous hospitals, equipment manufacturers and telemedicine centers. At the end of
these conversations, he was convinced that the existing solutions were grossly inadequate to meet
the urgent needs of the Indian healthcare system. Joshi and Raman ruled out the idea of joining hands
with existing players as the mental models of the incumbents were vastly different from their own.
They decided to venture out on their own with the common objective of enhancing the standards of
ICU care in non-metro India.
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In their travels across various suburban, tier-2 and tier-3 cities and towns of India after their return,
they studied in depth the functioning of hospitals of different sizes that had ICUs with different levels
of expertise and maturity. They met many medical practitioners and keenly observed them as they
provided treatment to their patients. During these exploratory trips, they came across medical
practitioners who, in their own ways, had tried to overcome the many challenges of providing ICU care
in less than ideal conditions. This learning gave Joshi and Raman a solid foundation to begin drawing
up the initial blueprint of Cloudphysician.
Early Financial Resources
Both doctors realized that their venture would require upfront capital investment in technology. The
competencies and connections they had acquired during seven years of specializing in pulmonary and
critical care in the US came in handy when they decided to return to India. Cloudphysician was a
bootstrapped firm – its founders initially earned income by identifying and rendering critical care
services to some of the hospitals in the US from their office in Bangalore, using technology. The income
generated from these services went towards both the venture and their personal expenses.
Location
Bangalore turned out to be a natural choice for hosting Cloudphysician. The city was home to a
number of large hospitals and reputed medical institutions, and therefore, had a larger pool of medical
professionals with the requisite expertise than many other potential locations. The entrepreneurial
ecosystem and access to medical and technology talent in Bangalore provided an early advantage to
Cloudphysician over other ventures that had made similar attempts from other locations.
Solution Development
Joshi reflected on the early days of the venture:
“We realized early on that we couldn’t give piecemeal solutions to the hospitals in India. It was
important for us to understand the problems faced by hospitals that were saddled with
underperforming ICUs. Acute shortage of expertise was visible in all such cases. Patients
admitted to ICUs were very sick. Doctors were unable to handle these patients, often resulting
in patients having to be transported over quite a distance to access a better-equipped facility
that provided reasonable care. The expense involved in accessing critical care in larger hospitals
in big cities was a significant obstacle for patients.
The challenge of providing good quality critical care in hospitals located in non-metro cities and
towns was not restricted to the mere lack of medical equipment. In fact, some of them had the
equipment needed for critical care. However, these hospitals lacked a comprehensive approach
that factored in both the present state of the hospital infrastructure and expertise of the
medical staff. Most hospitals just didn’t match up to the standards required to serve the needs
of the patients. To meet the needs of hospitals in India, which were quite price-sensitive, many
developed country-based large medical equipment manufacturers simply de-featured the
medical equipment designed for the developed world. In spite of this, the equipment was often
found to be feature-heavy and over-configured for the needs of the Indian environment. Many
of the products failed to function properly in the trying Indian environment characterized by
erratic power supply, dust, heat, etc., and in the hands of inexperienced and under-skilled users
in hospitals in non-metro locations, who were unable to come to grips with complicated
technology. Only large hospital chains found it viable to procure such equipment.”
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Cloudphysician decided to build a customized tele-ICU solution from the ground up that took into
consideration the disparate standards of hospitals on the maturity continuum. After 18 months of
rigorous market research, the founders felt that the time was finally ripe for them to transition from
the learning-by-observing stage to the action-on-the-ground phase.
Video cameras were key to any solution built on telemedicine. Cameras from well-established brands
were expensive. The Cloudphysician team turned their attention to local shops in Bangalore that were
supplying electronic gadgets. Their research led them to good quality cameras from lesser known
brands that they purchased at a fraction of the cost of expensive branded ones.
Raman and Joshi launched Cloudphysician by linking up the visual feed from these remotely placed,
low-cost, adequate-visual quality cameras to a tele-ICU platform built by a large global medical device
manufacturer. The platform captured the medical parameters of the patients. A few simple servers
and monitors housed in Cloudphysician’s small office in a prominent location in Bangalore enabled
Raman and Joshi to monitor patients remotely, and Cloudphysician was ready to offer tele-ICU
services to its clients with one nurse assisting the two doctors in feeding patient data into the platform.
Their ambitious idea had become a reality (see Exhibit 2 for infrastructure and facilities).
THE FIRST CUSTOMER
The founders now had to find a hospital that saw their solution as compelling enough to warrant an
experiment.
According to Joshi:
“We convinced a hospital in Mysore to accept the services of Cloudphysician. Our strong
individual professional credentials and commitment of being available round-the-clock to make
it a success clearly tilted the decision in our favor.”
Very soon thereafter, the inadequacies in the large global device manufacturer’s platform became
glaringly visible. The platform was designed for users in Western countries with different resource
settings relevant to the local conditions and existing technology systems used in those countries.
Placed in Indian settings, they were neither adaptable nor user friendly. Nurses complained that using
the platform had increased their workload. The founders noted that the platform was becoming a
hindrance to Cloudphysician’s solution gaining acceptance at their first customer. They proactively
reached out to the management team of the hospital, proposing to develop a customized technology
platform. The hospital agreed to become the test-bed for the technology that was to be built
exclusively for the Indian healthcare environment. Raman and Joshi made the bold decision to
discontinue using the global device manufacturer’s platform. They opted for Google Enterprise Suite
instead, using Google Sheets to implement key processes. Google Enterprise Suite was compliant with
Health Insurance Portability and Accountability Act (HIPAA) requirements. Payment terms were
negotiated to include the pay-per-use option. They ran a pilot of this solution for four months, after
which the doctors at the hospital, pleased with the solution, decided to adopt it in their ICU. (Exhibit
3 illustrates Cloudphysician’s workflow process)
One of the senior surgeons at the hospital shared his experience:
“In the past, the support we received from the medical staff in the ICU when some of the
patients had post-surgery complications was very poor. This was more pronounced in the
evenings or at night, when senior doctors had already gone home. Even though we were
confident of conducting successful surgeries, the lack of adequate post-surgery support in the
ICU was a major concern. We often had to turn down patients where we felt that the probability
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of post-surgery complications was high. Our hospital was not able to serve this major segment
of patients — those who were expected to be complex cases — consequently, we were losing
a significant revenue stream. After four months of utilizing Cloudphysician for ICU care
management, our confidence greatly improved. We began to take up complex cases where we
knew upfront that there would be significant post-operative complications in the ICU. We did
this because we knew that the experience of our doctors would be greatly enhanced by the
expert guidance and support of the critical care doctors from Cloudphysician. Our hospital was
soon flourishing.”
Cloudphysician seamlessly took over the role of observing patients in the ICU after surgery. This was
a relief for overworked doctors at the hospital, who began to enjoy a better quality of life knowing
that their patients were being monitored by the competent eyes of two qualified doctors from
Cloudphysician.
Raman recalled:
“Many doctors at our partner hospitals have become our close friends. One doctor had invited
me to his home for dinner. His wife quipped, ‘I see my husband more often since Cloudphysician
started the ICU in his hospital’. We can’t put a price on that.”
The deep expertise of Cloudphysician’s critical care specialists also translated into better prediction
and anticipation of future developments in the patient’s health in the crucial post-operative period.
Based on a combination of health parameters, Cloudphysician would alert the doctors in the hospital
well in advance of any impending issues with regard to patient health, so that the doctors could
complete their other tasks and be ready to attend to the anticipated emergencies well in time rather
than reach a situation where things had slipped hopelessly out of control. The benefits were
significant: higher productivity; better healthcare outcomes; considerably less anxiety for doctors,
nurses and relatives of patients; and improved patient care. These, in turn, led to a substantial
improvement in the confidence and morale of the hospital staff and in the financial performance of
the hospital.
According to Joshi, Cloudphysician operated on principles of transparency and knowledge sharing to
enable continuous learning:
“We are very transparent with the hospitals in terms of the roles and responsibilities of
Cloudphysician. We tell them upfront that Cloudphysician does not take liability for outcomes
as the hospital staff still owns the final delivery of treatment. We don’t ask any hospital to
replace doctors or ICU support staff. In fact, we are clear in our promise that we will significantly
boost the performance of the available staff through our proprietary model that entails
providing our expertise to the hospital doctors and staff to create a ‘multiplier effect’. Time and
again, the outcome measured before and after engaging with Cloudphysician has been the real
testimony of our commitment to deliver on our promise.
We allow our customers complete freedom on whether or not they would like to implement
our recommendations for each patient case. In fact, some of our customers were initially
skeptical about following our recommendations fully. We do not want complacency or
overconfidence to set into our culture just because we have superior expertise levels.
Everything from treatment recommendations by Cloudphysician to the final application of the
recommendations by the hospital staff and the resultant outcomes are recorded and reviewed
periodically to ensure that we, as a team, develop confidence in our future recommendations.
In this manner, we have created an organization culture characterized by intense learning.
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Ultimately, our success is tied to better outcomes for ICU patients being treated by our partner
hospitals.”
EVOLVING REGULATORY ENVIRONMENT

Telemedicine was a regulated field, governed by the Medical Council of India (MCI) Act and
Information Technology (IT) Act. However, these acts were dated and ripe for revision to keep pace
with recent advancements in technology. There was a lack of clarity around regulation relating to
storing, accessing and managing healthcare data. A clear and conducive regulatory environment, in
Raman and Joshi’s view, was vital for technology-enabled sharing of expertise with partner hospitals.
Joshi elaborated:
“Grey areas are not the desired situation for people like us with good intentions. We don’t want
to second-guess the surprises that the future regulatory regime may spring. We would rather
comply with the law of the land in letter and spirit. In areas lacking regulatory clarity, we have
followed stringent global standards such as the Health Insurance Portability and Accountability
Act of 1996 (HIPAA), a US law that provides data privacy and security provisions for safeguarding
medical information. Our physical perimeters are controlled via biometric authentication.
Systems are secured with appropriate software with stringent access restrictions that are
aligned to appropriate roles. Since we use Google Enterprise Suite extensively for
documentation and processes, we have obtained official confirmation from Google that the G
Suite services we use are HIPAA compliant.
Our contract with our customers requires them to ensure that they obtain explicit patient
consent for hospital staff working under the advisory of Cloudphysician. The spirit of the legal
clauses that we use while onboarding our partner hospitals has to be embedded in the legal
documents that they use for patient registration, consent, etc.”
Cloudphysician established a multi-cloud architecture using both Amazon Web Services and Google
Cloud Platform to support web and mobile applications. Since the solution was cloud-hosted with
redundancies, there was no downtime to essential services for 24/7 critical care. In addition to high
availability, cloud architecture enabled scalability to handle variable workloads. A web-based solution
connecting the client hospital to Cloudphysician’s command center required no software installation
and worked directly through any modern browser. To protect patient data confidentiality, the
Cloudphysician platform used modern encryption techniques to ensure data security and privacy.
Inspired by the transformation that radio detection and ranging (RADAR) brought to the world of
detection, the founders named Cloudphysician’s sophisticated technology platform “RADAR”. RADAR,
powered by computer vision and analytics, was at the core of Cloudphysician’s competitive advantage
(see Exhibit 4). RADAR had a multiplier effect on the utilization of medical staff in the client hospital;
for example, it made it possible for an intensivist to monitor a larger number of patients in the ICU.
Pan-tilt-zoom high definition camera devices running on customized firmware allowed RADAR to
collect and transmit images to the cloud. RADAR was programmed to instruct these cameras to take
pictures of the monitor screen and other devices such as ventilators located in the close proximity of
an ICU patient. RADAR’s computer vision and machine learning tools analyzed the images on the
monitors and on other screens that displayed the physiological parameters of the patient such as body
temperature, blood pressure, heart rate and serum levels of various stress hormones. The processed
data was then made available to the clinician stationed at Cloudphysician’s center for review. RADAR’s
future product roadmap included plans to enhance the ability of the technology platform to analyze
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real-time video to alert the physician about patient falls, seizures or other events that were dangerous
to the patient.
COMPETITION
Before the launch of Cloudphysician, the two major players to offer a tele-ICU care management
solution in India were large established hospital chains. After talking to some of the customer hospitals
of the two chains, Joshi and Raman realized that the services they offered were purely opportunistic
extensions for them. The solutions were clunky and had clearly not been built from the ground up;
they had given no consideration to hospitals in non-metro locations at different stages of maturity,
the paying capacity of their patients, or the varying degree of capabilities of the ICU staff at the
hospitals. The distrust between many of the customer hospitals and the service providers was
palpable. It was compounded by a sneaking suspicion among the customers that the two chains were
using the tele-ICU offering as an extension of their own services with the hidden objective of driving
patients from their customers’ hospitals to their own respective hospital chains.
The prevailing sense of distrust posed a major challenge for Cloudphysician’s founders in convincing
hospitals to adopt their solution. Raman explained:
“The origin of this challenge lies in the poor performance of past attempts to provide tele-ICU
services. The hospitals that had been early adopters had not been impressed by some of these
initial attempts. Despite their best intentions, the early entrepreneurial medical practitioners
who had attempted to provide tele-ICU services had underperformed far below the
expectations of these hospitals. Without adequately studying the ground realities, many of
them had plunged into offering a solution by jumping into partnerships with renowned global
medical equipment manufacturers who had merely defeatured offerings originally designed for
developed country markets. Without a solution built for the complex Indian environment, these
efforts naturally failed to deliver the desired results, and hospitals that had made substantial
capital investments were left with the impression that tele-ICU did not work in our environment.
The resultant crisis of confidence among such hospitals has clearly elongated the sales cycle for
us. However, as success stories with our customers increase, we are confident that the
skepticism in the system due to the sins of the past players will recede.”
Cloudphysician’s founders believed that their solution was differentiated enough to withstand the
ferocity of competition in the hospital, telemedicine and equipment manufacturing industries.
According to Raman:
“Our confidence in our solution comes from the fact that it requires a unique combination of
expertise and attitude to build a platform of this nature. We do not sell a software platform,
nor do we sell pure-play services. What we offer is very customized ‘productized solutions’
where a wide array of services is wrapped around our platform. One needs to have deep
exposure to 15-20 different types of electronic medical equipment by different manufacturers
before carefully selecting a combination that fits into the overall solution blueprint. Thanks to
our stint with one of the premier hospitals in the US and subsequent extensive study of the
Indian environment, between the two of us, we have deep understanding of the optimal
integration of the equipment as well as the services that need to be meticulously woven around
the offering to make the solution truly value-adding to our partner hospitals. In addition,
information technology capabilities are required to build the process layer. Even more
importantly, one needs to attract people with a particular attitude who are willing to throw
away all the easy career options, highly rewarding in the short-term, and invest their time and
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energy in building such a platform. It is not easy to seamlessly integrate technology and medical
teams to make all this work. Our credibility as two accomplished critical care experts from the
US, and the fact that we have left all of it to create a valuable company to serve the Indian
masses, in no small measure helps in attracting and retaining the best, highly motivated and
idealistic critical care doctors and nurses as well as technologists interested in healthcare. They
are all with us, having forgone more traditional and established positions in top corporate
hospitals in Bangalore and other metros, simply because they believe in our dream of creating
a great organization that provides hope to millions of suffering patients across the country who
badly need but cannot afford world-class critical care.
Funnily enough, an additional validation of the superiority of our solution has come from a very
interesting and unexpected source. Some of the shrewd sales representatives from one of the
largest global medical equipment manufacturers reached out to us with requests to visit our
facilities with their potential customers to showcase the impact of technology in ICU care
management. After giving our consent for such visits during the initial days of founding
Cloudphysician, we realized that these sales representatives were trying to use our facilities to
boost the sales of their companies. We have since been wary of entertaining such requests.”
REALITIES ON THE GROUND
All of the doctors at Cloudphysician had considerable experience working in ICUs of large reputed
hospital chains such as Fortis, Manipal and Hinduja. They were also put through a stringent evaluation
process for recruitment. During this process, the founders made it a point to sensitize them to the fact
that the nature of their work at Cloudphysician would expose them to situations that could be
disheartening. Most of Cloudphysician’s doctors had been exposed to the high standards of large
hospital chains in big cities. Joshi and Raman told them upfront that the standards at the hospitals in
tier-2 and tier-3 cities and towns with whom they would be working would likely not match up to the
standards they had come to expect (see Exhibit 5 for a map of partner hospital locations).
According to Joshi:
“Most or all of our doctors are motivated to fix that very problem and improve the current
situation. We do compensate them appropriately. Our business model has been built to scale
doctors’ efforts dramatically by leveraging technology, thus making it a unique, non-linear
business model in providing critical care.”
Typically, the first month after onboarding a hospital onto the Cloudphysician platform was a testing
period for these hospitals (Exhibit 6 outlines the onboarding process). Resistance to change from the
doctors and nurses at the partner hospital was a major challenge. It was quite common for hospital
staff to continue their old practices with complete disdain for the recommendations of Cloudphysician
experts. Raman and Joshi did not blame the doctors or staff of these hospitals for taking this attitude,
believing that the uninspiring and sub-standard conditions in the hospitals had led to this sense of
apathy over time.
Raman offered the following example:
“It is worth recalling our initial experience with a hospital in Varanasi that we had onboarded
onto our platform. We did not get the buy-in of the ICU staff for more than a month. It was
depressing to see the suffering of patients, and our team was feeling helpless. Finally, we
decided to speak with the owners of the hospital. We explained to them that the mortality rates
were unacceptably high and an ICU could not be run in that manner. Many of the deaths could
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have been avoided if the staff had followed the recommendations of Cloudphysician. Luckily for
us, the owners were medical professionals. However, they did not have enough bandwidth to
monitor the hospital administration and were relying on their staff to do so. We invited the
owners to our facility. We jointly reviewed every case that we had consulted on during the past
several weeks. At the end of the exercise, they were completely convinced that they had to
make some serious changes. Fortunately, they took some swift action. Significant improvement
in outcomes was there for all to see within a short span of two weeks. It is an interesting case
of change management by an external partner like Cloudphysician who has little or no authority
over the doctors and nursing staff of the ICU of the partner hospital. Similar examples from
other hospitals are aplenty.”
INFUSION OF ADVANCED TECHNOLOGY
The two founders, with support from technology developers, had built the initial technology
infrastructure using open source software to the extent possible. However, as the venture started
taking shape, they felt an acute need to bring structure to the technology division (see Exhibit 7 for
organization structure). Accordingly, they hired Dhruv Sud to head the division.
Reflecting on Sud’s appointment to a leadership position in the organization, Joshi said:
“Dhruv Sud is one of the first leadership hires we made last year. He joined us in July 2018. He
has given the technology division at Cloudphysician the look of an enterprise, wherein the
selection of people, technology and IT processes has graduated from purely opportunistic to a
strategic play.”
After completing his Master’s degree in Computer Science, Sud joined the engineering division of Epic,
one of the largest electronic medical records companies in the US. When he decided to return to India
after spending nearly a decade in the US, he did not want to pursue a conventional career. Raman and
Joshi convinced him to join Cloudphysician and manage the technology division. Once there, Sud
recruited a few competent technology experts to build a software platform, which also functioned as
a real-time analytics engine with components of artificial intelligence (AI).
Sud said:
“One of the technology experts I hired works on the development of medical applications, web-
based applications, machine learning (ML) and the AI part of the platform, especially focusing
on computer vision. One of them is a doctor who is also a data scientist. He is our key resource,
integrating technology with the medical domain.”
It was industry practice to track the severity of sickness among patients in ICUs using various scoring
systems. The Acute Physiology and Chronic Health Evaluation (APACHE) score was one such system. It
was predominantly based on research conducted on patients in the western world. Cloudphysician
developed an indigenous severity score for the patients in ICUs that it monitored. According to Joshi:
“We explored whether technology could be used to create a score that suits our conditions and
helps predict the patient’s health condition far more accurately. We used data sets of more than
4,000 patients in fine-tuning the scoring methodology that we developed. We compared the
score from our algorithm with APACHE’s score. Our system is evidently performing better in
predicting the condition of patients. We are in the process of generating real-time severity
scores using RADAR. This will be a massive breakthrough for us. With real-time severity scores,
Cloudphysician will be enable the ICU staff to understand the effectiveness of the treatment
being rendered to patients. With an accurate picture of progress in the patient’s health, the ICU
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staff will be in a much better position to take appropriate action. Staff will also be able to
seamlessly direct resources towards the most vulnerable ICU patients and keep all the
stakeholders updated on real-time developments. In simple words, this means more lives
saved! This is turning out to be a huge advantage for us and can be a game-changer in the
industry. Moreover, in the context of tier-2 and tier-3 hospitals in India where patients are often
accompanied by caretakers, many of whom are also earning members of the family, a day saved
by a quicker recovery assumes great significance.”
LIFE AS SALESMEN
The founders had shouldered the entire sales responsibility for the organization from the beginning.
The job involved considerable travel to remote tier-2 and tier-3 cities and towns across India.
Raman said:
“50-200 bed hospitals are our potential customers. ICU capacity normally comprises of 10% of
the hospital beds. It typically takes us anywhere between 3-4 months to sign up hospitals as
customers. With more awareness, we are witnessing more inbound enquiries, which result in
quicker conversion from prospect to customer, sometimes as quickly as two weeks. We had a
hospital in Pune that visited us 10 days back for the first time; today, we signed the final
contractual document and we are starting work with them on the coming Monday.
Our solution is as relevant for government hospitals as it is for private hospitals. However,
Cloudphysician is still in the early stages, which doesn’t allow us to invest the kind of effort and
time involved in working with government hospitals.
Having studied the needs of critical care in other developing countries, we are confident that
Cloudphysician’s solutions are relevant to other markets. At this moment, we have just begun
our operations in what is probably the world’s biggest market, and in an area where we have
not even scratched the surface. Expanding geographically beyond India has to be timed well.”
To somewhat ease the burden of responsibility of sales on the founders, Cloudphysician recruited one
sales representative to cover the northern part of India. His job was to visit as many hospitals as
possible to increase awareness about Cloudphysician. However, deploying the sales representative on
the ground had not yielded the expected results. The founders looked for other ways to accelerate
customer acquisition and explored tie-ups with complementary partners. Consequently,
Cloudphysician was in the final stage of discussion with a national distributor of ICU medical
equipment on a possible tie up for quicker growth.
By November 2019, Cloudphysician had onboarded 14 hospitals in 7 states onto its platform and had
a team of nine intensivists working out of its command center at Bangalore. (See Exhibit 8 for key
milestones (2016-2019) and Exhibit 9 for financials from 2017-2019)
THE DILEMMA
While Raman and Joshi were pitching the advantages of Cloudphysician to potential customers, a
disturbing development was taking place across the country. Conflicts between the family members
of patients and treating hospitals, including doctors, were on the rise, sometimes escalating into
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10
violence. A national daily in its headline had flashed the news of a hospital in Jaipur having employed
bouncers for the security of doctors.
Reflecting on this unsavory development, Joshi said:
“Belonging to the medical fraternity, it is saddening to watch the number of incidents being
reported in the media of family members of deceased patients vandalizing hospital
infrastructure and physically assaulting doctors. While we admit with all humility that we had
no such considerations at the time of conceptualizing Cloudphysician, we strongly feel that
hospitals can genuinely lower the chances of such conflicts by addressing the underlying
primary cause of these conflicts. Many incidents are related to patient deaths in ICUs. What the
families fail to recognize is that the current set-up, in terms of infrastructure, equipment and
skill levels, is often inadequate. Even under such trying circumstances, most doctors and nursing
staff at these hospitals perform to best of their abilities. We have noticed that without adequate
warning systems and expertise, medical staff, despite their best intentions, are often unable to
detect imminent danger to the patient in a timely manner. This, in turn, results in failure to
initiate timely communication with the family members about the patient’s health condition.
Family members are often shocked when the news of the patient’s demise is suddenly revealed
to them. The more emotional among these family members react irrationally, resulting in
damage to the hospitals, doctors, and ultimately to the confidence of various stakeholders in
the healthcare system.
Cloudphysician has the expertise to predict outcomes, provide timely attention that can help
ICU doctors and nursing staff deliver better care, and transparently provide status updates of
the patient’s health condition to family members. We do not wish to highlight this as a value
element of our offering. However, we believe that we can genuinely contribute to this area,
that would in turn help restore people’s faith in our healthcare system.”
For a start-up in the early growth stages, growing its customer base was of paramount importance.
Cloudphysician’s solution could enable hospital crews to communicate meaningfully with and
regularly update family members about a patient’s health, thereby potentially averting
misunderstandings and conflict. Pressing this advantage could help Cloudphysician to persuade
hospitals to buy its services. However, the founders were reluctant to sell their valuable solution on
the basis of fear. This situation created a dilemma for Raman and Joshi.
The evolving policy environment was another cause of concern. A stable regulatory environment
would lower the extent of uncertainty faced by healthcare start-ups like Cloudphysician. Raman and
Joshi were not sure whether to focus their attention and limited bandwidth on customer acquisition,
or instead work with policy makers to ensure that conducive policies were first put in place.
RADAR, the technology-led platform, was critical to the success of Cloudphysician. Its founders were
well aware of the advantages offered by a non-linear business model of this nature. However, the
adoption of computer vision, machine learning and artificial intelligence, which fueled the non-
linearity, meant that the venture required sustained investments. Would the founders be able to
continue to plough in the future investments necessary to sustain the technology leap, or was it about
time to raise funds from strategic investors? As Cloudphysician’s operations swelled in size, how would
the location strategy play out? What kind of talent and organization structure would unlock the scale
10Ali, S. I. (2019, November 12). Jaipur: Now, bouncers for security of doctors at SMS hospital. Times of India. Retrieved from
https://timesofindia.indiatimes.com/city/jaipur/now-bouncers-for-security-of-doctors-at-sms-
hospital/articleshow/72014417.cms.
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potential and still preserve the dynamism of a start-up? Cloudphysician’s current solution was priced
in an opportunistic manner, keeping in mind the immediate needs of the organization. How and when
should a stable pricing policy be implemented? Raman and Joshi knew that it was wishful thinking to
expect a ride without any competition. Would the competition emerge from one of the technology
giants, notwithstanding their lack of medical expertise, as had happened in many other industries?
The founders knew that these questions required serious consideration and that they needed to
dedicate some quality time and thought to the next steps in their journey.
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Exhibit 1
Profiles of the Founders
Dr. Dhruv Joshi, Director and Co-founder, Cloudphysician

Dr. Joshi is a pulmonary and critical care specialist who trained at the Cleveland Clinic
Foundation (US). He earned his medical degree from St John’s Medical College,
Bangalore, India, following which he trained in internal medicine at the Good Samaritan
Hospital in the US.
Dr. Joshi has a keen interest in the improvement of quality of care delivery. His clinical
focus was on advanced respiratory failure, mechanical ventilation and pulmonary
hypertension. During his residency and fellowship, Joshi was involved in numerous
projects focused on quality improvement of healthcare delivery, improvement of patient outcomes and
optimizing resource utilization. Several of his endeavors resulted in peer-reviewed publications.
Dr. Dileep Raman, Director and Co-founder, Cloudphysician

Dr. Raman is a pulmonary, critical care and sleep medicine specialist who trained at
the Cleveland Clinic Foundation (US). He graduated from the Government Medical
College Thrissur, India, with a distinguished gold medal in internal medicine for
academic excellence. He went on to complete his residency in internal medicine at
Texas Tech University (US), where he served as the Chief Medical Resident.
Dr. Raman is interested in training and has numerous teaching awards for resident and
fellow education including the Cleveland Clinic Foundation Teaching Excellence award.
His academic and clinical interests center around mechanical ventilation nomenclature, acute respiratory
distress syndrome (ARDS), neuromuscular respiratory diseases, interstitial lung diseases, thoracic and
procedural ultrasound and heart lung interactions in sleep.
Source: Company website: www.cloudphysician.net.
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Exhibit 2
Pictures of Cloudphysician Infrastructure / Facilities
Interiors of an ICU at a partner hospital monitored by Cloudphysician
Above: Cloudphysician command center in Bangalore; Below: Server room.
Source: Photographs provided by Cloudphysician
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Exhibit 3
Monitoring Workflow at Cloudphysician Command Center
Cloudphysician Command Centre

Outpatient Workflow
Emergency
Patient admitted via two-way audio / visual interface
New A visual assessment and data transfer takes place
Ward Admission
Alert
Steps 2 to 5 repeated Daily Admission Intensivist performs medical

until patient is review at the command centre
Rounds Review
discharged
Early warning Systems Command Recommen Cloudphysician recommended

24/7 action delivered via printer /
Active on-demand and Centre dations &
proactive decision support Monitoring electronic record at the hospital
Orders
Best
Practices
Implementation of best practices and standard of care
Periodic reviews on compliance
Command center alerted

Two way notification and communication
Emergency Protocol ensured, Command center performs
video and data assessment
Immediate Review
Patient case upgraded to HIGH PRIORITY
Immediate assessment of patient by
Command Center Intensivist
Action Plan Deployed

Command center Intensivist recommends
orders to bedside team
Constant Monitoring
Command center connected via camera,
internet and phone until patient is
stabilized; communicates with patient
attenders as needed
Standard Telemonitoring
resumes when patient is stable
Source: Company document.
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Exhibit 4
RADAR: Cloudphysician’s Technology Nerve Wire
Source: Photograph provided by Cloudphysician.
Exhibit 5
Location of Partner Hospitals Monitored by Cloudphysician
(as on December 12, 2019)
Source: Company website: www.cloudphysician.net.
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Exhibit 6
Process of Onboarding New Hospitals as Customers
Hardware / Hospital Requirements

1 High-speed Internet connectivity and firewall router
2 Computers at the nursing stations that are connected to the Internet and available for
remote access for documentation and communication with bedside team – equipped
with microphone, camera and data storage capability. CPU with 4GB RAM, i5 Processor
or a laptop with required configuration
3 Headset and Bluetooth speaker with mic
4 Availability of dedicated phone lines and handsets in the ICU so that staff can
conveniently move around the ICU while speaking
5 Printer and scanner with connectivity to the LAN and available for remote access
6 Access to medical records including LIS, PACS and EMR, if applicable
7 Availability of staff to fix the clamps
Cloudphysician deployment protocol
1 Confirmation of installation of hardware/ networking requirements at the customer site
2 Travel to customer site for camera installation and configuration
3 Confirmation from IT team on completing installation of tele-ICU nurse station, camera
and necessary configuration
4 Planning travel to the customer site and other logistical arrangements for conducting
clinical and operational trainings
5 Confirmation of completion of trainings
6 Coordination of visit by the doctor heading clinical operations for final review and sign-
off
Final go-live of tele-ICU at the customer site
Exhibit 7
Organization Structure
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Exhibit 8
Significant Events and Achievements
Important Achievements (as of November 2019)
9 Intensivists
Largest team in Bangalore ~2.5Mn ~140,000
outside of a hospital vital signs tracked lab values interpreted
system
14 hospitals >23,500 >100,000

in seven states patient bed days Interventions
~140 ICU beds >7,850 patients >12,300

imaging studies
Source: Company documents.
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Exhibit 9
Financials (in INR)*
Month 2017 2018 2019

Jan - 390,000 1,637,600
Feb - 399,600 1,656,800
Mar - 552,400 1,756,406
Apr 80,000 534,000 1,739,189
May 80,000 546,600 2,526,407
Jun 80,000 821,600 2,584,108
Jul 80,000 1,016,000 2,531,076
Aug 80,000 960,000 1,854,254
Sep 80,000 1,141,600 1,683,600
Oct 80,000 1,110,800 2,099,000
Nov 80,000 1,184,000 2,310,800
Dec 80,000 1,462,200 …
* 1 USD = INR 71.63 as on Dec 13, 2019)

Cloudphysician A Collaboration Between Man and Machine To Save Lives

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Cloudphysician A Collaboration Between Man and Machine To Save Lives

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Indian School of Business

July 25, 2020

Rajesh Pandit | D.V.R. Seshadri

CLOUDPHYSICIAN: COLLABORATION BETWEEN MAN AND MACHINE TO SAVE

effective basic services.

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patients requiring complex, special care.

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EVOLVING REGULATORY ENVIRONMENT

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Dr. Dhruv Joshi, Director and Co-founder, Cloudphysician

Dr. Dileep Raman, Director and Co-founder, Cloudphysician

Source: Company website: www.cloudphysician.net.

Cloudphysician: Collaboration between Man and Machine to Save Lives | 16

Interiors of an ICU at a partner hospital monitored by Cloudphysician

Above: Cloudphysician command center in Bangalore; Below: Server room.

Source: Photographs provided by Cloudphysician

Cloudphysician: Collaboration between Man and Machine to Save Lives | 17

Cloudphysician Command Centre

Steps 2 to 5 repeated Daily Admission Intensivist performs medical

Early warning Systems Command Recommen Cloudphysician recommended

Command center alerted

Action Plan Deployed

Cloudphysician: Collaboration between Man and Machine to Save Lives | 18

Source: Photograph provided by Cloudphysician.

Source: Company website: www.cloudphysician.net.

Cloudphysician: Collaboration between Man and Machine to Save Lives | 19

Hardware / Hospital Requirements

Source: Company document.

Source: Company document.

Cloudphysician: Collaboration between Man and Machine to Save Lives | 20

Important Achievements (as of November 2019)

14 hospitals >23,500 >100,000

~140 ICU beds >7,850 patients >12,300

Source: Company documents.

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Month 2017 2018 2019

Source: Company document.

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