A prescription for low-cost rural healthcare

Business is not in his genes, and with all the pulls of north Indian small town middle-class moorings, 37-year-old Sabahat S. Azim, feels that he could have ended up with a typical nine-to-five job.

However, his urge to ‘create something’, perhaps, made him move to entrepreneurship from being a bureaucrat.

A physician by training from Aligarh Muslim University, he joined the Indian Administrative Service. Between 2000 and 2006, he worked in the districts of Tripura before he became secretary to the Chief Minister.

When he found that he was not “creating” much, he left the administrative service to look for an independent creative space. He drifted to Kolkata and co-founded Sahaj E-Village Ltd, a rural information and communication technology-based venture with the Srei Group.

He parted ways after differences with the partner over the direction of the venture.

But by then Azim got the hang of a private enterprise and learnt the potential of technology in managing a business organisation that can experiment, innovate as also create. A team of like-minded professional managers was also ready to travel with him on a new journey.

In 2011, he floated Glocal Healthcare Systems Pvt Ltd, a Kolkata-headquartered and private equity-backed rural hospital company. Now, he and his team run a chain of five hospitals in West Bengal, providing affordable and efficient healthcare for the rural poor. Venture capital firms Sequoia and Elevar Equity have invested in Glocal Healthcare.

Equipped with a business model that can profitably deliver, Glocal Healthcare is currently implementing an Rs 400-crore project for 50 new units across six States.

Business model

Glocal spotted the business potential in a space – primary and secondary healthcare -- where organised private investments were conspicuously absent.

Azim also identified early a possible linkage of Rastriya Swasth Bima Yojana (RSBY) to their business plan.

“Our business model lays emphasis on providing financially self-sustaining price points that can work towards expanding the market opportunity. During our initial research, we found that taking the tertiary healthcare option and cutting it down to suit actual health needs is not the right approach to reach the rural hinterland.

“Glocal followed three critical cost and quality efficient design principles – zero-base approach, standardisation and technology-driven delivery -- for creating a scalable and sustainable healthcare model for itself,” Azim explained.

The findings of the National Commission of Macroeconomics & Health, which studied common disease occurrences in the country, came as handy reference point for formulating Glocal’s business plan.

The Commission, set up in 2005, revealed that 42 diseases comprise 95 per cent of the country’s disease load. Glocal designed its business solution to cater to 95 per cent of the disease load.

Cost reduction

“We were focussed on cost reduction. Forty-two diseases made inventory management cheaper. With an eye on capital expenditure reduction per bed without compromising quality of services, we focussed on a smaller subset of disease types and providing high clinical excellence in those versus servicing all disease types. Our hospital bed cost comes to Rs 8-10 lakh including land, building, equipment and doctor residences compared to Rs 25-30 lakh for private hospitals in urban India,” he added.

Protocol-driven model

Instead of being a doctor-driven model, Glocal created a protocol-driven model facilitated by doctors.

“While good doctors are the core of any healthcare service, protocols allow for ensuring good quality care that is independent of the skills of the doctor. All processes in the hospitals from diagnosis to management are standardised to ensure error free delivery. From diagnostic algorithms to standard treatment protocols, not only are all processes defined but also well measured. Glocal follows the principles of “Toyota Production Systems” to ensure processes inside the hospitals are continuously improved to ensure highest quality care,” Azim elaborated.

Azim’s team also developed Health Management Information System (HMIS) and Medical Diagnosis and Management System (MDMS) that integrate all processes from disease epidemiology, electronic health records, e – prescriptions and telemedicine to outcome management. The ICT backbone connects all hospitals with one database that ensures that the hospitals focus not only on surgeries or procedures but also on health outcomes. The patient-centric MDMS continuously improves its accuracy from feedback of outcome measurement.

Glocal hospitals, as a result, deliver healthcare at costs, which even small nursing homes with poor infrastructure cannot match. Azim, however, feels that the high point of his “creation” was a Glocal system that made sure outcome of services are measured only in full recovery or in complete cure.

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