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Healthbizinsight

May Issue 2018

CENTER STAGE

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Center-stage

The North Star

North India is the house for some of the leading names of the healthcare industry. The states are high in density and hence the opportunities are galore. It is proven by the fact that many players originally placed in the South are now making an entry into this market. There are many factors contributing to the rising demand of healthcare. A latest instance is the bad air quality has started showing its toll on the population here. The government is mainly centered in this region and it makes for a huge segment. Along with that there are higher paying target customers and many corporate entities that are willing to provide healthcare facilities to their employees. Plus, there are scores of migratory population as well, which brings in additional demand here. All of this and more makes North a shining star in the sky of the healthcare industry. In this issue, we bring to you 3 interesting features on some of the stars from the region that are making a mark, forging alliances, and charting new territories. Read on for more…

Economies of Scale

Narayana Health is known to work on a business model that believes in getting more patients by providing affordability; as the Group has now ventured in North, it is confident that replicating this success model will provide them a huge strategic edge

Center-stage

By: Neelam Jhangiani

Healthcare has become one of India's largest sectors and is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players. In a context of high healthcare costs and low accessibility to quality healthcare, Narayana Hrudayalaya (NH) was founded as a private enterprise to initiate a medical revolution. Based on the premise that any existing solution to treat cardiac illness was not affordable and therefore could not be defined as a solution, Dr. Devi Shetty founded NH to provide quality cardiac healthcare to the masses. In a vast and diverse country such as India with a billion-plus population, it is a daily challenge to make affordable care accessible to all. NH's approach towards providing affordable, quality healthcare for the poor is a combination of compassion, high quality medical knowledge and skills, and an astute sense of making the business work for the poor.
After the group ventured into other specialities as well, it came to be referred as Narayana Health. The group is headquartered in Bengaluru and operates a network of hospitals across the country, with a particularly strong presence in the southern state of Karnataka and eastern India, and an emerging presence in northern, western and central India.

Center-Stage

Our focus is on strengthening our imprint in the Northern region & we will keep increasing our presence here


The entry in North

The group took over two premium facilities in Delhi NCR in recent months in addition to one hospital in Katra, Jammu; therefore, taking the total count to three hospitals in the north. Brand Narayana is consistently increasing its footprint across the length and breadth of the country truly looking and emerging as a pan-India healthcare service provider.
Narayana Superspecialty Hospital, Gurugram previously known as New Rise Healthcare Private Limited, is a 211-bed unit with all major specialties like critical care, cardiology, ENT, oncology, endocrinology, internal medicine, orthopaedics, nephrology, ophthalmology, nephrology, neurology and neuro surgery, radiology etc.
The other facility, Dharamshila Cancer Hospital, was quite well known across North India for cancer treatment. The 220-bed facility under Narayana Group got renamed as Dharamshila Narayana Superspeciality Hospital (DNSH) and specialises in oncology-BMT, medical onco, surgical onco, radiation onco, gynae onco, and also orthopaedics, renal care, emergency & critical care, neurosurgery and neurology, internal medicine, pulmonology etc.
The third entity under Narayana, is a hospital at Katra that was known as Shri Mata Vaishno Devi Narayana Super Specialty Hospital and continues to be the same. It is 242-bed hospital and the major specialities are cardiology – adult, nephrology, neurosurgery, medical oncology, general medicine, medical gastroenterology, neurology, pulmology, paediatric medicine, orthopaedics, radiation and oncology, to name a few
In this interview, Commander Navneet Bali, Regional Director – North, Narayana Health takes us through the journey of the group into the northern part of the country. Cdr Bali has completed his Masters in Finance from NIFM and B.Sc. from JNU. He has also done his Financial cum Administrative Management course for the Navy and a special course on Strategic Financial Management, Inventory Control and Working Capital Management from Edinburgh Business School, Scotland. Prior to joining NH, he was associated with IOSPL (Cancer Therapy Centers) as Group COO and Head of Business. He also worked with Rockland Hospitals as a Unit Director. Before venturing into the healthcare industry, he served the Indian Navy for almost 30 years. In his current role, he is responsible for the overall strategic planning, operations management, service excellence and business development of the northern region.

What was the idea behind entering North?

Narayana Group has a strong presence in South, East and West of India, so North was a natural choice when we thought of increasing our footprint across the country. Also, we saw the potential for a hospital to be successful because the kind of model that Narayana believes in, could be replicated in north.
The location is densely populated as the square density of population is quite high and the number of people per operational beds ratio is also quite high. Hence, there's enough opportunity for good healthcare players to come and set up hospitals here.

With many established players already in the region, how does NH plan to secure a share of the pie? What will be your USP here?

The vision of Dr. Devi Shetty, Founder and Chairman of Narayana Health was very clear that he wanted to play on the economies of the region by keeping clinical excellence high, at the same time keeping the costs within the reach of the common man. Dr. Shetty believes, "the solution is not a solution until it is affordable".
The USP clearly is to earn our revenue from more number of people by keeping costs that are affordable, so that maximum people can afford it. The second important factor that we considered was transparency as far as patients and attendants were concerned. Under which, the first and foremost is transparency in the billing process and how we charge our patients. We believe in ethical practices and will apply the same in our northern businesses as well.


How did you select on the 2 acquired facilities in Delhi NCR?

As far as the first facility is concerned i.e. the Dharamshila Hospital, it was one of the premium institutes in cancer treatment. It's one the natural choices for people in the north. We basically looked at the entire NCR region as a geographical entity. Dharamshila is towards Noida and bordering almost the important junction of Ghaziabad, Noida and Delhi. Having a hospital with a good reputation plus a strategic location, covering even Meerut and Moradabad, fitted the bill exactly.
After this, we were looking to strengthen our presence in the exactly diametrically opposite location of Gurugram. New Rise Healthcare Private Limited was chosen as it could cater to South Delhi, Anand Vihar, Gurugram, new Gurugram, Sohna Road and also for patients coming from Rajasthan, Riwadi and up to Jaipur. Thus, these two hospitals in diametrically opposite ends of the capital are helping us cover a large number of patients.

How is the market different than the other locations you have presence in, especially compared to South?

Every market is different when we talk about healthcare; in fact, there is a difference in the market between our Narayana Dharamshila Hospital and Gurugram facility as well. For instance, if you look at South – our clientele is not only from south but a huge number of patients come from east (especially for cardiac surgeries) and also from Bangladesh and east and west Bengal too.
While Gurugram is a place, which is more corporate oriented and has a number of retired people from the Delhi government as well. Also, the hospital in Gurugram is located right inside a residential area, giving it an extra edge. Whereas the Dharamshila Hospital is more towards the government schemes such CGHS, Railways etc., as the locality is home to a lot of government people. Hence, I would say, Delhi NCR totally is a mixed bag as far as scheme patients and cash patients are concerned, while in the South, around 60-70% are scheme patients and 30-40% are cash patients.

What are your plans to boost medical tourism in your Northern hospitals?

The Gurugram hospital is the closest hospital to the international airport, so it is suitably located for international patients to land at the Indira Gandhi International airport and come to the hospital. This close proximity is clearly an advantage for patients coming for medical tourism and we are marketing it to the target countries by collaborating with our channel partners who consist of government of the countries, embassies, international insurance institutions, medical tourism facilitators, and more.
In addition, with the Jewar airport coming up in Mayur Vihar, our hospital at Dharamshila will benefit from having another airport, which will be at a short distance of about 40-45 minutes.
Therefore, both our hospitals are strategically located to attract medical tourists from across the globe. We are committed to providing world-class care to our international patients backed up by top-of-the-line medical facilities that are second to none.

Will you also enter other locations in North India?

There is nothing specific currently, but we will increase our footprint across Delhi NCR. We already have a hospital in Katra, Jammu, which is the third hospital in the North region that shows our focus on strengthening our imprint in the Northern region. We believe our recent ventures in NCR will help us target this key geography more efficiently while accelerating our trajectory to become a true pan-India healthcare service provider.

A Diagnostic Insight

Oncquest Laboratories is one of the leading players in the North; let us explore what makes the player a success

Center-stage

By: Neelam Jhangiani

The Indian healthcare industry has been stirred by a number of factors over time. It has now reached a place from where it can grow exponentially, given the right resources. The recent spike in the pace and speed of growth of healthcare can be attributed to strengthening coverage, improved quality of services, and increase in expenditure by public as well as private players.
Amid this impressive progress, one industry that has emerged as a prominent game changer in the healthcare sector is diagnostics. Various factors such as rising prevalence of diseases, improving affordability of patients and increasing penetration of health insurance have contributed substantially to spur the demand for diagnostic services in India. The industry has witnessed a lot of traction in the recent years and the market projections will only further its chances of growth in the coming years.
The rise in the diagnosis of health problems, medical ailments, diseases and illnesses in India has increased the need for quality pathology diagnostics services. The role of diagnostic service providers is now more important than ever. As personalised and predictive medicine has progressed, healthcare industry has to face challenges of how to manage a mass of patients and direct their testing processes without errors.
North India is also a market marred with these challenges at the same time presenting opportunities to solve these hurdles. And a leading player here, with over a decade of experience in the field of molecular diagnostics and pathology services, is Oncquest Laboratories, which has earned its reputation of clinical excellence in the Indian market. Its advanced technologies and global quality systems have ensured that the company stays ahead of the curve.
In a detailed interview with Dr. Ravi Gaur, Chief Operating Officer, Oncquest Laboratories Ltd, New Delhi, let's try and delve more into what makes the company stand out amongst its peers.

Center-Stage

'Samples can reach us from all corners of India in 10-12 hours and at times even within 4-6 hours'


What makes you a leader in the Northern region?

Oncquest is not only a leader in the Northern region but is now India's largest molecular oncology provider. We have an aggressively-growing network across India with strong footprints in Nepal, Bangladesh, Tashkent and Sri Lanka. My personal connect and our referral lab located in Delhi makes us more visible in North, though our client base is similar for North, South, East and West of India.

How do the advanced technologies at Oncquest help you in standing apart from the competition?

Oncquest Laboratories has been a forerunner in the molecular diagnostics services space for over a decade in India. The beginning as a research-focused entity in 2001 has had a significant impact on the way our evolution has progressed. Starting with a then-advanced technology platform of multiplex PCR, we later added next gen sequencing, digital droplet PCR, advanced surgical pathology including immuno-histochemistry, flow-cytometry, FISH, haematology, cytogenetics and much more to our portfolio. We are a technology and skilled based centre and our quest to perform and excel, makes us stand out amongst strong competitors.
Accredited by College of American Pathologists (CAP) and National Accreditation Board for Testing and Calibration Laboratories (NABL), we offer a range of laboratory tests for understanding the molecular basis of malignant transformations of the cells. These tests are designed to provide diagnosis and prediction of disease progression and can be used to provide customised oncology treatment. Oncquest utilises the experience and expertise of trained scientists and pathologist to provide clinicians with an incisive diagnosis to identify the disease process at the fine point of differentiation.
Oncquest's recent advances in the areas of companion diagnostics and pharmacogenomics have also allowed for and encouraged greater penetration of personalised medicine into the Indian healthcare market, making it the future epicentre of the much technological advancement in healthcare, to come.

What is the annual load and how do you work on increasing this number?

We handle over 15,000 patient samples on a daily basis. Oncquest has a strong business development team, which is technically trained and geared up for delivering quality services. Oncquest is member of almost all healthcare industry and academic bodies. Our strong skilled team of doctors & scientists are part of technical discussions, which helps us to build up our network and gives confidence to the users about our strength and capabilities. Our highly skilled team and large geographic spread across India and neighbouring countries has helped us to develop & offer innovative assays and grow in numbers.

Since you joined the company, the numbers have been high. Which initiatives of yours helped in the surge?

I would like to give this credit to my entire team. It took me a bit of time to develop a dedicated team and make them understand our vision. Cohesive and well-coordinated efforts of our highly skilled team and introduction of advanced technology focussing on outcome helped us to surge.
Few of our new initiatives like global quality accreditation (CAP &NABL), connect with pharma companies for their patient support programme, clinical trial, epigenomics, focussed R&D work for delivering customised noble assays, hospital lab management, noble assay for all super specialities, building up knowledge bank & training, has helped us to build a very strong quality, technology and skill driven platform for new age diagnostics.


What kind of business model do you follow and why?

Our majority of partnerships are in tertiary care or super specialised hospitals catering to oncology, gastroenterology, infertility, immunology, nephrology, cardiology, critical care, infectious disease, preventive & wellness space. We bring proven international assays to India, validate for India specific environment and make it affordable to Indian population. Our aim is to provide final and correct diagnosis, which can help the clinicians in designing personalised therapy, early diagnosis and its recurrence. Today, Oncquest is known as Final Opinion Provider and more so for complicated cases. Pathology is all about guiding clinicians in their diagnostic dilemma and I personally believe that all pathologists are clinical solution providers and they should keep themselves fully updated and work hand-in-hand with clinicians to provide them solutions for better treatment outcome.

Tell us about your overall presence in the market and how do you plan to further increase it?

I believe in setting up new trends. I look forward to filling the gaps and offer innovative, disruptive and customised solutions at all levels of healthcare platforms, from super speciality to neighbourhood hospitals, small clinics, laboratories, day care, wellness & lifestyle clinics, etc. (both in rural & urban space) that have formed in the market in terms of services in the biotechnology and healthcare spaces. There is a significant opportunity where quality accredited services are required to bring the Indian end-user experience at par with global standards.
For Oncquest, future advances in technology at both ends of the spectrum (super speciality and general pathology), bioinformatics, hospital lab management, satellite screening labs etc. will allow for a more targeted approach to the market, meanwhile continued growth in the areas already defined would see greater permeation in the high-end clinical activities in India and abroad.

Which new tests are on the anvil?

With rapid advancement and availability of new technology many more new assays are now being offered advanced. Day by day more companion diagnosis and personalised diagnostic assays are being launched. Next generation sequencing for better and focused tumour profiling, liquid biopsy for very early diagnosis of cancers, molecular microbiology for early & precise detection of severe infections, metagenomics, gut microbiome, food alley & intolerance and genetic testing for lifestyle diseases are few of the new offerings, which are giving new direction to treatment and wellness.

Steps that you take to ensure customer care & satisfaction.

Healthcare is a service industry, and this is more applicable to diagnostic services. We believe that customer service shouldn't just be a department, it should be the entire company. At Oncquest, we follow this in totality and have a personalised connect with almost all clients. We have a strong technically qualified customer care team, supported by highly skilled doctors and scientists. We conduct technical training for our staff at regular intervals, both in person and online. I too connect with all my customers to address their concerns and advise them on relevant new technology assays. A quality driven feedback mechanism with accountability is in place in our organisation. Satisfied customer is the best source of advertisement. The customer's perception is the real reality for us. What they think about our service and offerings matters the most.

How do you ensure a faster turnaround time for reports?

I personally believe that a missed or delayed report is of no use and can be pricey to life. One of most common reason for slower TAT (turnaround time) is delay in sample transportation. We have a globally practiced and quality compliant logistic system in place. We can pick up sample from any part of India and at any temperature. Samples can reach us from all corners of India in 10-12 hours and at times even within 4-6 hours. Secondly, we have pre-defined processes, fully automation, IT complaint systems, which take care of all preanalytical delays. Our labs work round the clock to ensure the assured TAT. Our systems keep a track of delays and alerts are created at every step. This helps to ensure timely delivery.

Oncquest was recently awarded the Outstanding Cancer Diagnostic Laboratory by ASSOCHAM. Tell us more about it.

Diagnosis of cancer and that too at the molecular lever is our main expertise. Oncquest vision & mission is delivering the final solution for early and correct diagnosis, predicting prognosis on high technology & quality driven platform with perfect service and at affordable rates. We have many publications with strong academic credentials.
ASSOCHAM is India's one of the largest knowledge driven platform and we are proud get recognition for our hard work from them. We have been awarded for our vision, mission and delivery of our work in cancer diagnosis specially for cervix, breast, lung and colon.

Why the focus on cancer?

Every cancer is different, and every patient affected with cancer behaves differently. Thus, there is a strong need to develop personalised and precise diagnostic assays, which can help in defining and delivering targeted therapies.
The technological advances of the past decade have helped researchers to characterise the molecular basis of cancer. With this knowledge, drugs targeted at specific molecules have been designed. New diagnostics, or biomarkers, for cancer are now urgently needed to determine which of these new drugs a patient is most likely to benefit from. With ageing populations and an increasing lifetime risk of cancer, there is an increasingly important role in early and precise diagnosis of cancer. Potential solution to this growing challenge can be addressed by diagnostics.

One of its Kind

Pathkind Diagnostics, part of Mankind, has started off with a unique strategy of targeting North India's tier 2, 3 & 4 locations first and then moving on to bigger cities

Center-stage

By: Jayata Sharma

A recent entrant in the diagnostic segment, Pathkind has already established a market of its own with 1 reference lab, more than 26 network labs and more than 160 collection centers. The company has flagged off its business from the highly populated state of Uttar Pradesh and has plans to spread out to larger cities soon.
The company's mission is to be a trusted brand having a pan-India footprint, making superior quality diagnostics services accessible to the masses at affordable price through innovative means.
The labs and collection centers use state-of-the-art equipment that help provide accurate test results within clinically relevant time. Pathlab network offer tests ranging from the simplest screening to advanced tests under molecular pathology, cytogenetics, histopathology & haematology, and also on-demand sample home collection facility.
Not just this, Path Kind also offers a wide array of preventive health packages.
In a detailed chat with Mr. Sanjeev Vashishta, MD & CEO, Pathkind Diagnostics, he tells us more about the company's focus, its strategy and the future plans. Before joining Pathkind, he was heading SRL Diagnostics for 5 years and has an overall professional experience of 27 years.
Over to the interview…

In our last about 8 months of operations, we have already deployed about Rs. 100 crore and in our entire first phase, we intend to invest a little over Rs. 400 crore in the business

Why the entry into pathology?

Diagnostics, including pathology, has a significant relevance in today's times when the disease burden is increasing in demonic proportions and the countries are reeling under tremendous pressures to cope up with this massive drain on the exchequer. The gravity of this is far more accentuated in India as most people pay for their healthcare needs out of their own pockets. There is a huge gap between the demand and supply of quality diagnostics services, especially in the smaller cities/ towns, where getting superior quality diagnostics services is challenging and the paying propensity of the patients is low. There are many other compelling reasons to reinforce the diagnostics services delivery system in India:
A. Only about 20% people in India have ever given their samples for diagnostics. Not that they don't need to be diagnosed, they need to be guided about the importance of diagnostics.
B. The Accession (Sample) to test ratio in India is less than 2, which means from one sample, less than 2 tests are carried out in India. This is very low in comparison to world's average and perhaps below the ratio observed in most emerging economies also.
C. Cost of diagnostics is only a fraction of the cost of treatment. It is about time we should focus on preventive health checks to lower the burden of treatment on the exchequer.
D. Challenges around finding the right talent, grooming and training them and sending them to the smaller cities/towns.
Hence, Pathkind is set out on a mission to make superior quality diagnostics services accessible to the people across the length and breadth of the country including the tier 3-4 towns, at affordable prices.

How much does the current investment stand at and the amount that will be fused in further?

In our last about 8 months of operations, we have already deployed about Rs. 100 crore and in our entire first phase, we intend to invest a little over Rs. 400 crore in the business.

What is the USP of Pathkind?

We are setting up labs even in the tier 3 and tier 4 towns as opposed to just creating a network of collection centres. Needless to mention, we are focussing equally on the urban and metro markets. Apart from this, we are also determined to bring standardisation across all our centres in terms of processes, systems, operating protocols, look & feel of the centres etc. We are using high-end technologies (automated platforms) even in the smaller towns and sending qualified, skilled and trained people to provide good diagnostics experience, accurate reports to the patients/customers.


With already many established players in North India, how do you plan to capture a market share?

Diagnostics is one arena where more competition is going to augur well for all the stakeholders. Given the need of the superior quality Dx services, there is a need to set up more and more centres capable of providing accurate diagnostics consistently and nimbly. Quick Turn Around Time of the tests would result into starting early treatment and for that it is important to cover the last mile (smaller towns) with labs. The debate which we often have internally is whether to pounce on the same pie (market) or create different pies. We are looking at creating different markets. Having mentioned this, there is bound to be some churn in the existing market also. New markets could be created by:
A. Making available to the people those meaningful technologies and tests, which are more specific, sensitive and affordable at the same time. To make this happen, one has to work closely with the technology providers and business partners.
B. Educating the masses about the relevance of diagnostics and preventive health in today's times.
C. Collaborate with the doctors and key opinion leaders and share with them new technologies and tests. This could be done effectively through continuing medical education (CMEs) programmes and round table meetings.

Kindly let us know about some of the innovative marketing techniques being applied by Pathkind.

We believe in setting the basics right and doing the right things. While it is imperative that we make use of efficient and effective marketing tools that are available to us, we also:
A. Provide extensive trainings to our sales and marketing team members. Every incumbent joining the company (irrespective of his/her area of operations) has to undergo training programs spread across 23 to 27 days.
B. Employ youngsters/rookies through rigorous recruitment drives, grooming them and moulding them to suit company's requirements.
C. Engage with our customers and channel partners through a dedicated channel team.
D. Conduct CMEs/round table meetings for the doctors/KOLs.
E. Conduct camps for the patients/customers.

Your focus is entirely on Uttar Pradesh currently. Why?

We had to overcome our dilemma to go to the large cities across the country or pick smaller geographies, go deep and then spread our wings in the contiguous geographies such that we have a pan-India presence over the next few years. After protracted internal discussions, we decided to pick fewer geographies, go to the grass root level and then replicate the model in the contiguous geographies. To start with UP was no brainer. The state is most populated (~ 240 million people) and has good demand for high quality diagnostics. Our UP agenda is almost complete as we have already become the largest network in terms of number of labs/centres in UP. We are now in the process of moving to the contiguous states.

Your plans for the next 5 years. What's the target for breakeven and then eventually profit?

Our objective is to have pan-India presence over the next 5 years. Since ours is a high Opex Model (we have planned large number of labs) and we will be in the growth phase in all these years, we expect to turn EBITDA positive in the 5th year.