New venture seeks to start low-cost rural hospital chain…..C.H. Unnikrishnan
Spearheaded by former civil servants, Glocal Healthcare will build 2,000 hospitals across India in five years
Spearheaded by former civil servants, Glocal Healthcare will build 2,000 hospitals across India in five years
Ahealthcare venture spearheaded by former civil servants plans to set up the countrys largest rural hospital network, which could potentially redefine Indias private healthcare business in terms of cost and pricing.
People behind the project include M. Damodaran, former chairman of the Securities and Exchange Board of India (Sebi), Vinodkumar Tyagi, former chief executive of Infrastructure Leasing and Financial Services Ltd, and Sabahat S. Azim, a former civil servant in the Tripura government.
The venture, Glocal Healthcare Systems Pvt. Ltd, plans to set up 2,000 hospitals across rural India in five years at less than half the investment of `16-20 lakh per bed that corporate groups have been projecting as the cost of opening speciality hospitals in urban and semi-urban areas.
Glocal Healthcare, which will provide primary and secondary medical treatment in 30-bed hospitals, promises quality healthcare at less than what rural Indians spend at present. The average healthcare spending of rural Indians is estimated at `1,115 a year.
We estimate our investment, which covers the land, building and medical infrastructure and other variables, will not exceed `2.5 crore (per hospital) once the expanded phases of the project is started, says Azim, chief executive officer, who is a doctor himself.
The first two hospitals will come up at Roorkee in Uttarakhand and Bolpur in West Bengal by the end of this fiscal.
Our hospitals are meant for sub-district level, covering a population of about 1.4 lakh within 14km radius, and each of these hospitals will be equipped with out-patient and in-patient departments, operation theatre, labour room and minor injury units, Azim said in an interview on Monday.
The 2,000-hospital network, the countrys first low-cost modern hospital chain, will be completed in four phases of 500 hospitals each, he said. It is being funded by venture capital firms whose names have been kept confidential.
The services of Glocal Healthcare hospitals will be based on the protocol of the World Health Organization, and it is going to be comprehensive rational healthcare based on the disease profile of the country, Azim said.
This essentially means the treatment methods adopted at the hospitals will follow ethical standards recognized by the modern healthcare community; all medical interventions will be disclosed to the patients and needless tests, drugs and surgeries avoided.
Economies of scale will be crucial for the success of the venture, which will also need to offer services that are customized to meet the requirements of rural India and fill the existing vacuum, according to industry experts.
The cost of setting up a hospital doesnt significantly vary on the basic infrastructure. But the major difference in terms of investment depends on the model or the type of standards that you wanted to bring in the quality of infrastructure and service in the hospital, said Vishal Bali, chief executive officer of Fortis Hospitals, Indias second largest corporate hospital chain by network.
Rural India needs better healthcare at the cost it can afford. This is basically a well-organized primary and secondary care, which the existing government hospitals and the small nursing homes could not provide, he said.
Consultancy firms Ernst and Young, McKinsey and Co. and KPMG have in their studies on healthcare demand in India projected around $50 billion of investment in the sector in the next 5-10 years.
Looking at the people behind the project and their grassroots-level understanding on the rural healthcare needs, the model seems workable in the primary and secondary care segments, says Muralidharan Nair, leader, healthcare practice, at Ernst and Young India. Since it is a purely rural healthcare plan, incorporating other branches of medicine would also be essential as a major chunk of rural patients follow these practices.