"A Novice's Experiment with Affordable Healthcare” - Dr. V Renganathan, Co-founder, Vaatsalya Healthcare Solutions

1. A Novice’s Experiment With
Affordable Healthcare
V. Renganathan
Co-Founder, Vaatsalya Healthcare Solutions
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

2. Enabling access to affordable healthcare
Vaatsalya Healthcare Solutions
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

3. Indian Healthcare Expenditures
Year
2008
2012
2017
•
•
•
•
•
HC Expenditure ($)
45 B
79 B
158 B
Annual Growth rate: 15%
Increasing income
Insurance availability
Availability of good hospitals
Availability of highly skilled doctors
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

4. Healthcare Services Distribution
Indian Population: 30% Urban & 70% Rural
Hospitals: Mostly Urban & Tertiary Care
Demand: Mostly Primary & Secondary care
Semi-urban & Rural areas lack healthcare facilities &
when available may not be of good quality
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

5. About Vaatsalya
• Mission: Create a network of for-profit
hospitals providing customer-oriented, ethical,
affordable, and efficient healthcare services in
semi-urban and rural areas
• Number of hospital units operational: 15
• “Accessible, affordable, human-touch, &
respect”
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

6. Vaatsalya Business Model
• Location: Tier II and III cities with 200K
population
• 50-100 bed hospitals
• Specialties: General medicine, Gynecology,
Pediatrics, and General Surgery
• Offer 70% of needed healthcare services
• Other Specialties: Nephrology, Urology,
Pediatric Surgery
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

7. Founders/Management Team
Dr. Ashwin Naik, Co-Founder & CEO
• Physician, scientist, and entrepreneur
- VP of Business Development at Triesta Sciences
- Human Genome Project, Celera Genomics, USA
Dr. Veerendra Hiremath, Co-Founder & VP, Projects
• Physician & Hospital admin
- Vivus Group Hospitals, and Asia Heart Foundation
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

8. Founders/Management Team
Dr. Renganathan V
VP Alliances
Scientist turned manager
- Asso. Prof, Biochemistry at Oregon Graduate Institute, Portland, USA
- 40 publications & 6 PhDs
- Program manager, Intel, Portland, Oregon, USA
- PhD from Indian Inst. Of Science, Bangalore
- MBA from Portland State University, Portland, Oregon, USA
•.
-
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

9. Vaatsalya Hospitals (12)
Karnataka
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

10. Vaatsalya Hospitals (4) – A.P.
Rajmundhry
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

11. Facilities
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

12. Vaatsalya Hospital, Hassan
Bharathi Healthcare Complex, Opp to Sandalkote
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

13. Vaatsalya Hospital, Hubli
IMZ Plaza, Next to New Bus Stand
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

14. Vaatsalya Hospital, Mandya
Pragathi Healthcare Complex, G. H. Road
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

15. Reception, Shimoga
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

16. Neonatal ICU, Gadag
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

17. NICU – Vizianagaram, AP
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

18. ICU, Gulbarga
NICU, Gulbarga
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

19. Awards & Accolades

Top 100 startups – TATA NEN Hottest Startup 2008

Sankalp Award for Social Enterprise 2009

Rashtriya Samman Puraskar 2009

Frost & Sullivan India, Excellence In Healthcare Award 2010

India Fast Growth 25 (# 5 Ranking) 2010

Ashwin Naik selected as a global Young Leader by WEF (2012)

Porter Prize for Value Based Healthcare (2012)
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

20. Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

21. Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

22. Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

23. Affordability in a Hospital Context
•
•
•
•
•
Affordability depends on target segment
Target segment for Vaatsalya: Rs 36 – 120K/year
BPL income: 17K a year
Our customer earns 2x – 7x that of a BPL family
Vaatsalya is affordable by APL segments
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

24. Understand Healthcare Service Costs
Service Price =
Total Cost
=
Total cost of operations + Provider profits
Fixed Cost + Variable Cost + Indirect Cost
Fixed costs: Professionals, Mortgage/Rent, Depreciation
Variable costs: Medicines, Consumables
Indirect Costs: Water, electricity, Corporate expenses
(Expected) Provider Profits α Investments
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

25. Vaatsalya Approach to Cost Control &
Profit Optimization
Strategy
Impact
Don’t own but lease building
Low investment requirement
Buy only reliable Indian made
equipment
Lowered capital expenditure
Negotiate volume discount
Lowered capital & variable
expenditure
No costly equipment (eg; MRI)
Lowered capital expenditure
Doctors on revenue share
Lower fixed expenditure
Control corporate expenditure
Lower operational expenses
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

26. User Challenge to Provider
•
1. Offer good quality accessible services at
affordable prices
2. That offer should be available wherever I move in
my community – That means scalable
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

27. User Expectations: Healthcare Service
Cost as low as possible
High Quality
Home
Hospital
Easy Accessibility
User’s Street
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

28. What is Quality?
User yardsticks of Quality
• Cure rate or how fast I got cured
• Clinical Diagnosis Skills
• Hospital Cleanliness
A quality provider follows recommended
guidelines of diagnosis & treatment
What are the impact of quality measures on cost?
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

29. Accessibility to Services
• Physical
as well as services accessibility
• Physical accessibility means hospital in the neighborhood
itself or if transportation is available easy access through roads
How does accessibility impact costs ?
Closer the healthcare facility to the user higher the costs
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan

30. Urban Health
Issues
Communicable/Infectious
diseases
Prevention
Acute Care
•Long-term
•No significant
role for Provider
•Short-term
•Predominant
role for Provider
• OP & IP care
Non-Communicable
Prevention
•Long-term
•Significant role
for Provider
• OP care
• Diagnostics
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan
Chronic Care
•Long-term
•Significant role
for Provider
• OP & IP
• Diagnostics

31. Urban Healthcare Delivery Model
Peri-urban
Spaces
Full fledged
secondary care
hospitals with OP &
IP care
• Low-cost clinics
• 1-2 docs, ANM, Nurses
• Clinics with OP care
• Diagnostics
• Medical management
• Diet/exercise consultation
• OP chronic care treatments
Presented at Lounge47.in on 1st February 2014
Copyright © Mr. Dr. V Renganathan