The quiet reception room in Nova Medical Centre at Koramangala Layout in Bangalore resembles the lobby of a modern bank. No nurses running around, no smell of disinfectant, no noise of ambulance sirens, no pieces of medical equipment. In the calm atmosphere, Erode-based textile entrepreneur C. Ramesh Kumar, his wife Uma and his parents wait a little nervously. Kumar’s two-year daughter Lekhashree has stiff legs. The family has travelled 300 km to consult Dr Gautam Kodikal, a renowned paediatric orthopedic surgeon with Nova Medical.

“A cast for two weeks and follow-up physiotherapy for a few months will correct her problem. There is no need for surgery” is Dr Kodikal’s prognosis. The family heaves a sigh of relief. Next year, if at all Lekhashree and her parents need to consult Kodikal (or doctors like him), they don’t have to travel all this way. Nova is planning a centre at Coimbatore, less than two hours drive from Erode. Nova represents a new breed of emerging healthcare firms leveraging the booming prosperity of India’s 250-plus small towns and nearby villages. People in these places no longer need to travel to faraway cities to access quality healthcare. It is at their doorsteps, and at lower costs.

FORTIS HEALTHCARE Model: 150-250 bed specialty hospitals Hospitals: Already present in Tier-2 towns, five hospitals coming up in Tier-3 Plan: 25 more hospitals ====================== SHIVINDER SINGH, MANAGING DIRECTOR “The target is 25 such hospitals in a period of 2-3 years”

Nova has set up six centres in Bangalore, Delhi and Mumbai in the past four years, and plans to start 10 new ones: in Chennai, Hyderabad, Pune, Ahmedabad, Kolkata, Jaipur, Kanpur, Coimbatore, Mangalore and Kochi within the next two years, says Dr Mahesh Reddy, founder and executive director.

Each of these day-care surgical hospitals, which offer not-so-complex surgeries, will cost about Rs 8-10 crore. In big cities, they cost several crores more. “Surgery at Nova costs only one-fifteenth that of hospitals in the UK, while it offers the same quality and standards of care,” says Dr Nasser Ahmed, specialist registrar in emergency medicine at London’s Kings College Hospital, who brought his 60-year-old mother, Naseem Unnisa, for knee replacement surgery at the Nova Centre in Bangalore.

Tax incentives, lower cost of land, buildings and staff, a faster return on investment and a patient population that can pay attract healthcare companies to semi-urban and rural India. They are innovating with new healthcare delivery formats and low-cost models that overcome geographic and economic barriers. “The demand and supply gap in healthcare in India is huge, and quality healthcare in smaller towns will be the main feature of the business in future,” says Prathap C. Reddy, chairman of Apollo hospitals. Reddy pioneered the concept of corporate hospitals in India in 1984.

Is the model profitable? Healthcare, especially beyond basic primary care, is not cheap. Neither is equipment, medical expertise or technology. The key lies in being able to develop the appropriate business model, designed to meet specific needs, and be able to provide services at an affordable price. Some think it is doable, and are putting their mind and money behind it.

Big Dads Branch Out...
India has 0.9 beds per 1,000 people, compared to a global average of 3.3. It needs 100,000 additional hospital beds each year, at an investment of about Rs 45,000-50,000 crore per year for the next 10 years, notes a CII-McKinsey study. Apollo, now a chain with 54 hospitals, is building most of its new projects in semi-urban and rural areas. They have a low-cost hospital brand (Apollo Reach) and each project has 150-250 beds and multiple specialties. “Our Reach projects are in Karaikudi, Erode, Kochi, Chittoor, Karimnagar, Lucknow, Ranchi and Siliguri,” says Sangita Reddy, executive director, Apollo Hospitals Group. Apollo plans to set up 50 such hospitals in the long run.



There is little doubt that the propositions are bankable. Tier-3 cities are transforming into Tier-2 cities and small towns are becoming Tier-3 cities with enough of an affluent population, says Vishal Bali, CEO of Fortis Global Healthcare. “Small towns and villages with wealth from agriculture and allied industries are part of the growth story.”

Fortis, with 56 hospitals and over 8,200 beds, will add seven new facilities with 2,200 more beds soon — in Ludhiana, Kangra, Ahmedabad and Gwalior, and two hospitals at Gurgaon and at Peenya in Bangalore. In the third quarter of fiscal 2010-11, Fortis added 250 beds at Moradabad in Uttar Pradesh and at Raigarh in Chhattisgarh. The target is 25 such hospitals over the next two to three years, says Shivinder Singh, managing director of Fortis Healthcare.

Max Healthcare, which runs eight super specialty hospitals in Delhi with about 1,000 beds, is also eyeing small towns. The chain, which is constructing two super specialty hospitals at Shalimar Bagh in Delhi and at Dehradun, is setting up two 300-bed multi-specialty hospitals at Bhatinda and Mohali in Punjab, each with an investment of over Rs 120 crore.