Single Specialty Multi-Center Hospitals and Clinics - an emerging healthcare trend in India

Arun Joseph VargheseArun Joseph Varghese on July 25, 2013

It is a known fact that 80% of India’s healthcare needs are provided by the private sector and over 90% of Indians pay out of their pocket to meet their healthcare expenses. India will sustainably have the largest number of people suffering from Hypertension, Arteriosclerosis and Diabetes. But with the rising population is the increase in disposable incomes, patient awareness and health insurance penetration. Patients aspirations too are fast changing and they demand quicker response times and lesser waiting times.

A recent trend emerging in India to meet this huge gap of healthcare demand is the mushrooming of multiple single specialty hospitals and clinics under a single corporate entity. Take a look around your neighborhood and you would notice the branded eye care centers or mother and childcare facilities or specialized day care surgery centers, small and mid-sized hospitals, dialysis centers, dental clinics etc.

The business model thrives on rolling out several centers simultaneously across Tier-I and Tier-II cities in India under a corporate entity bringing healthcare to your door-step. In fact Private equity firms and Venture Capitalists have jumped on to the bandwagon funding these corporatized healthcare services with millions of dollars as they see these single specialty centers to be profit generating centres in shorter gestation periods. Even the investment required in setting up these specialized centers is much lower in comparison to the large multi-specialty tertiary care hospitals.

This emerging trend is at a nascent stage in healthcare but seems exciting considering that healthcare seems to be learning from the manufacturing sector. Concentrate on your core competence, achieve a favourably higher number of expected patient outcomes i.e. higher quality, better customer satisfaction, brand recognition, employee retention and eventually profits. Healthcare IT companies are also rising to this emerging trend. They have come up with solutions which can integrate data across these centers such that a patient’s electronic medical record (EMR) software is available at the corporate level across multiple locations/cities.

So if a patient walks into XYZ Clinic in Location X, his medical records should be accessible even if he goes for a follow-up visit to any of the XYZ Clinics at any of its available locations.

The Healthcare IT vendors are also offering EMR applications as a Software as a Service (SaaS model) which are web-based and some with a cloud offering, allowing no requirement from a clinic to invest in an in-house server, a dedicated IT Team or any networking equipment. All the clinics would need to invest in is a dedicated internet connection or a leased line or a 3G dongle and they are up and running live with a hospital/clinic management software.

One of those advantages of this business model is it is less capital intensive and highly scalable wherein a new center can be opened in a location under the same brand in a short period of time. The key to implementing the right EMR product is also to ensure that the application that the corporate decides to purchase is also scalable such that the addition of a new clinic should be technologically feasible.

This model is also seeing a shift in patient behavior where the patient walks in to a particular clinic or hospital due to its brand perception and not just on the competence of the doctor. In earlier days the patients would flock to receive services from a specific doctor but today that reputation is slowly shifting to the brand image of the corporate.

The model has also evolved into franchising models, where the corporate only lends its franchise but the subsidiary is still privately run. Some of them are looking to penetrate further into the Tier –II / III and even the rural markets and roll out 100s of such centers.

The government understanding that privatization of healthcare is inevitable seeks to leverage the PPP (Public Private Partnership) model as is seen in the running of Primary Healthcare centers in rural areas.

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July 25, 2013


July 25, 2013