Business Standard

Primary healthcare catches on

Itishree Samal  |  Chennai/ Hyderabad 

When 28-year-old Priyanka Rao had a headache, she visited a city-based super-specialty hospital fearing it could be migraine or something chronic. The doctor advised her MRI, CT scan and other tests to diagnose the cause of the pain. Later, the reports revealed that the pain was just because of a normal headache. Rao, however, had to shell out Rs 4,000 to undergo these tests and for the doctor's consultation fee, while the same could have been done for just Rs 100.

The healthcare expenditure is increasing 12 per cent year-on-year and is expected to touch $125 billion by 2015 in India. Experts believe the main cause for this high expenditure is lack of facilities and mushrooming tertiary and super speciality hospitals.

According to reports, in the last 10 years more than 60 per cent of had come up mainly in metros. Being the world’s second most populous nation with over 1.2 billion people, the country’s government-run primary health clinics are over-crowded and faces a shortage of qualified doctors and nursing staff. Besides, many still have to travel some 100 km to get basic healthcare.

To reduce the expense and make healthcare accessible for all, many players are now getting into the primary healthcare space. Primary healthcare caters to the basic level of preventive and curative medical care, and forms almost 80 per cent of all health requirements.

Its major components are doctor consultations, ambulatory care, immunisation, basic diagnostics, and retail healthcare such as pharmacy, over-the- counter drugs, personal medical equipment, health food and physiotherapy. It mainly comprises care delivered by a general physician in an out-patient setting.

According to Technopak Advisors, the primary healthcare segment accounts for 60 per cent of the healthcare delivery market, growing at 15 per cent annually. The current market size is $30 billion, which is likely to reach $200-250 billion by 2025.

The last few years had seen increased interest and investment in this segment. The start-ups, with innovative business models, are providing health treatments at low-cost, high-quality. Some of the names in the field include LifeSpring Hospitals, Manappuram's MaCare Healthcare and Razi healthcare, who are spreading their operations pan-India and setting up community health centres and, primary health clinics.

Major players
Hyderabad-based Razi Healthcare, backed by Singapore-based private investment institution Richard Chandler Corporation, is planning to open 100 primary healthcare clinics by the end of this year. Currently, it has 50 clinics across Andhra Pradesh and plans to add another 50 in Tamil Nadu, Kerala and Karnataka, and later in other parts of the country.

“We follow the strategy of having presence in a state covering all places, then entering another state. We want to give low cost basic healthcare services by setting up clinics in neighbourhood, gated communities and corporate offices based on the family doctor concept,” NV Subba Rao, chief executive, Razi Healthcare, says.

Razi, which started in 2009 with a low-cost, patient-centered approach for all primary healthcare treatment services, offers doctor consultations, diagnostic services, minor surgical procedures and products from an in-house dispensary.

The concept of family doctor was there in India till the late 70s, after which it started fading out with the boom of the corporate hospitals and specialists. A family doctor is the one who knows you, your health and any change in health, says Santanu Chattopadhyay, founder and managing director of Bangalore-headquartered Nation Wide Primary Healthcare Services.

Nation Wide entered into the primary healthcare segment with its hub and spoke model in gated communities, corporate organisations and neighbourhood clinics. Currently, it has seven clinics in Bangalore and plans to open 20 more in the next 18 months in Gurgaon and Kolkata. It also has clinics in a few corporate organisations and is looking to expand its model in Bangalore, Mumbai and other cities by 2012.

“We were pretty conservative in the beginning. But now by realising the potential and seeing the response, we want to expand aggressively. We had raised $1 million to start the company, and are in the process of raising another $5 million for our expansion plans,” informs Chattopadhyay.

The company has set up online accounts with medical history for every patient, conducts follow up phone calls (even when a patient isn’t sick!), has a 24/7 on call facility and provides for home visits.

PE investment
One trend, which is emerging in the primary healthcare sector, is investors and private equity players are investing in clinics concept. Around $200 million private equity fund has already flown to the primary healthcare space.

Acumen Fund had invested $1.9 million (around Rs 8 crore) for a 50 per cent stake in Hyderabad-based LifeSpring Hospitals Private Limited. LifeSpring started its operation in 2005 and provides maternity services and basic pediatric care. It now has 12 clinics in Hyderabad, and plans to set up another 88 in the next 3-5 years in other metros.

“We target the urban working poor class, those who come to cities for work and cannot afford the treatment,” Anant Kumar, chief executive officer, LifeSpring Hospitals, says.

It charges Rs 4,000 for a normal delivery, compared with Rs 6,000 charged by small nursing homes and Rs 30,000 by large corporate hospital chains.

The healthcare market is highly unorganised, says Kumar, adding the low-cost treatment segment is dominated by stand-alone clinics run by individual doctors. However, the low-cost treatment is getting organised with many private players in the segment.

Manappuram Health Care Ltd, a venture of the Manappuram group of companies, plans to invest Rs 1,000 crore over the next five years to set up a chain of medical, dental clinics and diagnostics centres across south India under the brand MAcare.

For this, Sequoia-backed Manappuram is planning to open 500 clinics (MAcare healthcare clinics) in the country over the next two years. Each centre will have three verticals — MAcare medical clinic, MAcare dental clinic and MAcare diagnostics.

Despite the sustained rise in healthcare budgets over the years, India ranks 171 among 175 countries in public healthcare spending, according to a CII report.

Moreover, the country is increasingly becoming a hub for medical tourists seeking quality and affordable healthcare services. The need for primary care becomes all the more important.

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Primary healthcare catches on

When 28-year-old Priyanka Rao had a headache, she visited a city-based super-specialty hospital fearing it could be migraine or something chronic. The doctor advised her MRI, CT scan and other tests to diagnose the cause of the pain. Later, the reports revealed that the pain was just because of a normal headache.

When 28-year-old Priyanka Rao had a headache, she visited a city-based super-specialty hospital fearing it could be migraine or something chronic. The doctor advised her MRI, CT scan and other tests to diagnose the cause of the pain. Later, the reports revealed that the pain was just because of a normal headache. Rao, however, had to shell out Rs 4,000 to undergo these tests and for the doctor's consultation fee, while the same could have been done for just Rs 100.

The healthcare expenditure is increasing 12 per cent year-on-year and is expected to touch $125 billion by 2015 in India. Experts believe the main cause for this high expenditure is lack of facilities and mushrooming tertiary and super speciality hospitals.

According to reports, in the last 10 years more than 60 per cent of had come up mainly in metros. Being the world’s second most populous nation with over 1.2 billion people, the country’s government-run primary health clinics are over-crowded and faces a shortage of qualified doctors and nursing staff. Besides, many still have to travel some 100 km to get basic healthcare.

To reduce the expense and make healthcare accessible for all, many players are now getting into the primary healthcare space. Primary healthcare caters to the basic level of preventive and curative medical care, and forms almost 80 per cent of all health requirements.

Its major components are doctor consultations, ambulatory care, immunisation, basic diagnostics, and retail healthcare such as pharmacy, over-the- counter drugs, personal medical equipment, health food and physiotherapy. It mainly comprises care delivered by a general physician in an out-patient setting.

According to Technopak Advisors, the primary healthcare segment accounts for 60 per cent of the healthcare delivery market, growing at 15 per cent annually. The current market size is $30 billion, which is likely to reach $200-250 billion by 2025.

The last few years had seen increased interest and investment in this segment. The start-ups, with innovative business models, are providing health treatments at low-cost, high-quality. Some of the names in the field include LifeSpring Hospitals, Manappuram's MaCare Healthcare and Razi healthcare, who are spreading their operations pan-India and setting up community health centres and, primary health clinics.

Major players
Hyderabad-based Razi Healthcare, backed by Singapore-based private investment institution Richard Chandler Corporation, is planning to open 100 primary healthcare clinics by the end of this year. Currently, it has 50 clinics across Andhra Pradesh and plans to add another 50 in Tamil Nadu, Kerala and Karnataka, and later in other parts of the country.

“We follow the strategy of having presence in a state covering all places, then entering another state. We want to give low cost basic healthcare services by setting up clinics in neighbourhood, gated communities and corporate offices based on the family doctor concept,” NV Subba Rao, chief executive, Razi Healthcare, says.

Razi, which started in 2009 with a low-cost, patient-centered approach for all primary healthcare treatment services, offers doctor consultations, diagnostic services, minor surgical procedures and products from an in-house dispensary.

The concept of family doctor was there in India till the late 70s, after which it started fading out with the boom of the corporate hospitals and specialists. A family doctor is the one who knows you, your health and any change in health, says Santanu Chattopadhyay, founder and managing director of Bangalore-headquartered Nation Wide Primary Healthcare Services.

Nation Wide entered into the primary healthcare segment with its hub and spoke model in gated communities, corporate organisations and neighbourhood clinics. Currently, it has seven clinics in Bangalore and plans to open 20 more in the next 18 months in Gurgaon and Kolkata. It also has clinics in a few corporate organisations and is looking to expand its model in Bangalore, Mumbai and other cities by 2012.

“We were pretty conservative in the beginning. But now by realising the potential and seeing the response, we want to expand aggressively. We had raised $1 million to start the company, and are in the process of raising another $5 million for our expansion plans,” informs Chattopadhyay.

The company has set up online accounts with medical history for every patient, conducts follow up phone calls (even when a patient isn’t sick!), has a 24/7 on call facility and provides for home visits.

PE investment
One trend, which is emerging in the primary healthcare sector, is investors and private equity players are investing in clinics concept. Around $200 million private equity fund has already flown to the primary healthcare space.

Acumen Fund had invested $1.9 million (around Rs 8 crore) for a 50 per cent stake in Hyderabad-based LifeSpring Hospitals Private Limited. LifeSpring started its operation in 2005 and provides maternity services and basic pediatric care. It now has 12 clinics in Hyderabad, and plans to set up another 88 in the next 3-5 years in other metros.

“We target the urban working poor class, those who come to cities for work and cannot afford the treatment,” Anant Kumar, chief executive officer, LifeSpring Hospitals, says.

It charges Rs 4,000 for a normal delivery, compared with Rs 6,000 charged by small nursing homes and Rs 30,000 by large corporate hospital chains.

The healthcare market is highly unorganised, says Kumar, adding the low-cost treatment segment is dominated by stand-alone clinics run by individual doctors. However, the low-cost treatment is getting organised with many private players in the segment.

Manappuram Health Care Ltd, a venture of the Manappuram group of companies, plans to invest Rs 1,000 crore over the next five years to set up a chain of medical, dental clinics and diagnostics centres across south India under the brand MAcare.

For this, Sequoia-backed Manappuram is planning to open 500 clinics (MAcare healthcare clinics) in the country over the next two years. Each centre will have three verticals — MAcare medical clinic, MAcare dental clinic and MAcare diagnostics.

Despite the sustained rise in healthcare budgets over the years, India ranks 171 among 175 countries in public healthcare spending, according to a CII report.

Moreover, the country is increasingly becoming a hub for medical tourists seeking quality and affordable healthcare services. The need for primary care becomes all the more important.

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