Hospital Comes Home

When Krishnan Ganesh’s 84-year-old father-in-law fell ill, he was in a fix. In spite of his considerable wealth and all its attendant benefits, caring for his ailing father-in-law was proving to be a challenge. He had a chronic condition which required constant attention; a short stint in hospital would not work. Ganesh hired nursing attendants but they were irregular and often went missing for days. Therein came the realisation that lakhs of families across the country were going through a similar ordeal.

So, what was a personal predicament for his wife and business partner, Meena Ganesh, and for him became the trigger for a venture called Portea Medical, a home healthcare service provider.  

The home healthcare segment, which provides everything from pre- and post-operative care to doctor visits and nursing care for chronic and ailing patients, all within the comfort of one’s home, is a $130-billion market in the US and a $57-billion market in Europe. In India, it is still in a nascent stage.

Until a few years ago, such a service did not exist at all or was provided in an unorganised fashion. However, the entry of organised players such as Portea Medical, Health Care at Home India (HCHI), India Home Health Care (IHHC) and Medwell Ventures has changed the rules of the game. These companies have raised venture capital, nurse pan-India ambitions and possess adequate manpower and the technology to address the needs of the home healthcare market. Today, the market in India is estimated to be in the region of $2-4 billion and is growing rapidly.   
 
Homing In
One of the primary reasons for the development of the home healthcare market in India is the country’s ageing population. While India is often hailed as a young country, with 14.4 crore people above the age of 60, it also has the second highest number of old people after China. Also, with nuclear families becoming the norm in urban India, support systems for the elderly have collapsed. Moreover, lifestyle changes in the past few decades have led to a rise in chronic ailments such as high blood pressure, diabetes and arthritis which require constant care and monitoring rather than short-term critical care.

However, with a mere nine hospital beds available for every 10,000 people in the country, India has one of the lowest ratios of hospital beds to population, anywhere in the world. Hospitals and nursing homes prioritise patients requiring critical care — the latter also yield higher revenue rather than those with chronic ailments. Again, with health insurance yet to take off in a big way in the country, hospitalisation is the last resort, given that it is prohibitively expensive.

With the government having largely abdicated its role of providing healthcare to citizens, most people are dependent on private sector healthcare service providers. There is, hence, a great opportunity for the home healthcare market to develop in the country.
 
The Early Birds
One of the early movers in this space was Chennai-based entrepreneur V. Thiyagarajan, who set up IHHC in 2009. Again, the trigger was the difficulty in caring for elderly patients at home. Thiyagarajan, whose wife is a doctor, decided that this unmet need required an institutional rather than individual response. “Once surgery is carried out, a large portion of the post-operative treatment can be administered at the patient’s home. Patients also like being in the familiar surroundings of their home and hospitals get to free up beds and turn them over quickly for needy cases.”

IHHC offers a variety of services, including duplicating an ICU at home. “We have tied up with medical equipment providers so that patients can have ventilators at home and even dialysis can be carried out at home,” says Thiyagarajan. While all players, including IHHC, have tied up with hospital chains to provide feeder services or post-operative care, Thiyagarajan points out that healthcare is a doctor-led system in India. “Think of hospitals as facility providers and managers, be it an operation theatre or support services, which doctors use in return for a fee. Doctors are the stars.”

Last year, Bayada, among the largest players in the US home healthcare sector, took a 26 per cent stake in IHHC.
 

One person who clearly understands how the hospital administration system in India works is Vishal Bali, the former CEO of Fortis Hospitals. “We clearly need to have a more patient-centric healthcare system and speciality home healthcare is a key element of it. More than 40 million Indians lose their lives every year to chronic ailments and a quarter of them are under 60 years of age. Given the shortage of hospital beds in the country and the need for pre- and post-operative care, home healthcare is the way to go,” he says. Bali along with Ferzaan Engineer, who runs Cytespace Research, a company in the CRO space, has set up Medwell Ventures.



To jump-start growth, Medwell acquired Bangalore-based Nightingale Home Health Services for an undisclosed sum. “Nightingale has been around for 18 years and has tremendous brand equity. However, it was limited to Bangalore and scaling was an issue. We expect to not only increase our footprint but also deepen the portfolio of services offered,” says Bali.

Another entrant to the home healthcare market is Dabur group scion Gaurav Burman. His company, HCHI, has tied up with the founders of Health Care at Home UK — Charles Walsh and Gareth Jones — in a 65:35 partnership, with the Burmans holding majority stake. Vivek Srivastava, CEO of HCHI, says while the company is operational in three cities —Delhi, Chandigarh and Jaipur — the plan is to scale up fast across the country. “We will be investing more than Rs 200 crore in the next couple of years, becoming a large pan-India player in the near future. We anticipate revenues of close to Rs 500 crore by 2018,” says Burman.
Health Care at Home UK, in the healthcare business for 22 years, will provide training and technical expertise to the Indian venture.

Bangalore-based Portea Medical was started by Zachary Jones and Karan Aneja, who wanted to bring the American home healthcare market model to India. Ganesh acquired it for an undisclosed sum last year. “At that stage, it was a small operation but there was a cultural fit and the acquisition helped us cut go-to market time.”

The Roadblocks
While all the four major players are gung-ho about market prospects, there are a couple of industry issues which they need to tackle — the major one being the availability of talent. “This is a people business. If I am deploying a nurse or a paramedical attendant to a client’s place, I am responsible for his safety and security. Also, one cannot carry a huge reserve in this business as it is expensive. Even hospitals struggle to attract and retain talent, so the job is cut out for all the industry players,” says Thiyagarajan of IHHC.

Another obstacle that the home healthcare segment has to contend with is health insurance. Right now, most insurers limit themselves to paying for hospitalisation, not for medical services availed of at home. All home healthcare industry players say they are lobbying and working with insurance firms to bring about a change. “It is in their interest that they should begin to reimburse expenses incurred on medical services provided at home as they will be of lower cost,” says Ganesh.

While it is a people business, all the players are investing heavily on technology. Both Srivastava and Ganesh emphasise that they have already spent a couple of million dollars in streamlining their back-end operations. “Electronic patient records, scheduling  and monitoring staff with the help of technology are all essential to long-term success. The market is nascent but it requires patience and perseverance to grow,” says Bali of Medwell.

For now, patients requiring healthcare services at home as well as care-givers can heave a sigh of relief. Multiple players and the competition between them has meant that patients not only have more options to choose from, the care itself has become more affordable.   

(This story was published in BW | Businessworld Issue Dated 04-05-2015)