Medicine's New Bankers

Corporate healthcare is all geared up to increase its market share and penetrate into more areas, each with their own business models. Nancy Singh checks out the ambitious plans of major groups

Primary healthcare and going retail is the new mantra that corporate healthcare giants are singing. After unleashing plans to acquire, build or manage more and more hospitals, major groups like Apollo, Fortis and Manipal are venturing into primary healthcare and extending the 'retail' dimension. Manipal Health Systems is entering the retail segment with plans for over 100 healthcare stores across India in the next two years.

Apollo Clinics has plans for a network of at least 100 clinics in the next couple of years.

Not to be left out, Dabur too is joining the growing number of new entrants in the country's $12-billion organised retail mart. The Rs 1,900-crore company plans a chain of 300-400 retail outlets, based on the health and beauty platform, across the country. Meanwhile, Reliance Retail, the retail initiative of Reliance Industries, in its plans to set up 4,000 pharmacies in the next four years, will provide medical services like blood tests, medical insurance, and health-related consultancy. Reliance is targeting the semi-metros and towns.

"The most important challange in retail healthcare is to reach rural India" - Dr Alok Roy Chairman and Managing Director MedicaSynergie, Kolkata

Fortis HealthWorld, an amalgamation of Ranbaxy Laboratories Ltd and Fortis Healthcare Ltd, plans to roll out 1,000 health stores in the next five years across 400 towns. Reportedly, Fortis plans to roll out 250 stores with an investment of around Rs 800 crore by the end of this year.

A recent entrant in the market, MedicaSynergie, owned by Dr Alok Roy, under its brand name Medica Pharmacy, plans a chain of 500 retail pharmacy outlets in the next five years. In the last two months, it has already established 10 pharmacies in West Bengal and Tamil Nadu. They provide an array of free value-added services like pressure checks, sugar check and weight control measures through periodic health camps.

Rural India has caught the attention of Dr Roy. "In today's era, the most important challenge lies in our ability to develop business models that will transcend geographical boundaries and reach the door steps of over 70 per cent of the population residing in rural India," declares Dr Roy, Chairman and Managing Director, MedicaSynergie, Kolkata.

A new Healthy Interest

The reasons for sudden interest in primary healthcare segment are manifold. Despite an extensive three-tiered Government healthcare infrastructure in primary healthcare comprising 23,000 Primary Health Centres (PHCs), 1,37,000 sub-centres serving the semi-urban and rural areas, and 3,000 Community Health Centres (CHCs), according to OPPI 2000 estimates, "there is a huge requirement for primary healthcare facility at all levels —this in spite of the Government setting up a well-structured healthcare delivery network up to the village level," says Sandeep Sinha, Programme Manager, Healthcare Practice, Frost & Sullivan - South Asia & Middle East.

Also, new dimensions have made primary healthcare an ambiguous term because healthcare is no more just treating the patient before the clinical systems appear. Some corporates disagree to term their venture as a means to tap the primary healthcare market. They prefer to portray it as a means to increase market share and thus build a model. "This helps in building a strong bonding with the neighbourhood as well as establish an effective referral network of loyal customers," informs Dr Roy.

Another reason is that, the primary healthcare provider network is extremely fragmented and of poor quality. "It is precisely in this context we have set up a network of Apollo Clinics. They provide comprehensive day-to-day services, its USP being excellent quality and value-for-money," says Ratan Jalan, CEO, Apollo Health and Lifestyle Ltd. Analysts believe the time is right to tap the segment. "Importance of health insurance, corporatisation of healthcare, rise in lifestyle- related diseases, increased health awareness and overall growth in economy are few key reasons for the growing potential in primary healthcare," says Sinha.

Insurance companies, on their part, too, prefer preventive care rather than reimbursing the treatment cost of hundreds of patients, say analysts. "Primary healthcare is highly disorganised and fragmented in India. But with chronic care on the rise, most successful corporate players in provider space will focus on primary care," avers Mohammed Hussain Naseem, Vice President-Healthcare, IBM Global Services India Pvt. Ltd.

Retailing Health

What began with food, moved on to clothes and now it is medicine. Retail is the new business mantra for the Indian healthcare industry, which has added a new dimension to healthcare. Just as you have bread and milk in your shopping list, you can now add a flu shot too.

In a first-of-its-kind venture in India, Manipal Group is rendering healthcare related services and sale of quality healthcare products, through its wellness stores. A comprehensive healthcare retail brand 'Manipal Cure & Care' (MCC), is a brain child of Dr Ranjan R Pai, Manipal Group CEO. MCC retail will be launched soon and would focus predominantly on wellness and preventive care in mall environment as well deliver the service offerings through qualified professionals. Each health store is estimated at Rs 2 crore–Rs 3 crore.

"It will be a holistic wellness centre," explains Somnath Das, Chief Operating Officer, MCC. "A one-stop-shop with seven specialities under one roof. We will target corporate houses, mall going crowd and megacities," says Das. The consultations include all basic specialities such as general medicine, paediatrics, cosmetic dentistry, dermatology, ophthalmology and sports medicine.

There would also be instant medications available for cold, cough or flu, at 'Express Clinics'—a part of MCC. "We expect healthy people to come in a mall, but nevertheless, if somebody is looking for general treatment, they can avail of it at Express Clinics," informs Das. The Manipal Group believes that a patient can have a 'fun' environment to treat flu, than that provided by a clinic or a hospital. The joint venture, formed at an initial investment of Rs 10 crore, will be headquartered in Bangalore and the first MCC store will come up on a 7,000 square feet space on Old Madras Road, Bangalore, likely by May 2007. Existing pharmacies of both companies will now come under the ambit of MCC.

Under one Banner

With the budding health shops, each vendor is looking to differentiate himself from the others. Fortis HealthWorld plans stores under two models—company-owned and franchisee stores that would stock prescriptions and over-the-counter drugs for both Allopathic and Ayurvedic products, health foods, supplements and even health books. They will also be equipped with telemedicine facilities and collection centres connected to SRL Ranbaxy, the Group's chain of pathology labs. Three formats have been planned for the stores in 500 ft, 1,000 ft and 2,000 feet in both, metros and small cities.

Apollo Clinics, which was perhaps the first player to tap the market with its franchisee model, has conceptualised a 'satellite' clinic model as well, which may be more suitable for smaller towns or as a cluster of clinics centred around Apollo Clinics. Jalan says, "The clinic is an innovative attempt at providing 'branded' healthcare in the retail segment." For its expansion, it has chosen franchisee as a model as it enables faster penetration and geographical reach. "The idea is to supplement our knowledge and expertise in the healthcare domain with the franchisees' understanding of the local market," adds Jalan. Currently, there are 50 Apollo Clinics operating in India in 35 cities including Mumbai, Chennai and Kolkata.

As an implementation of the satellite model, Apollo Hospitals has launched a mobile breast clinic in Hyderabad, which will be linked to the hospital via a satellite link. The clinic would comprise a mobile screening unit equipped with mammography and ultrasound, which would be linked to the main hospital, which in turn will provide diagnostic and therapeutic facilities, along with rehabilitation. Breast preserving treatment options, cosmetic reconstruction options and psychological counselling will be offered.

Meanwhile, Fortis is creating a robust backened by setting up a supply chain network of warehouses in each state, implementing cutting-edge IT infrastructure and barcoding all products, including medicines, to support efficient operations viewed as extending one more arm in the healthcare sector.

A Bitter Pill to Swallow

But not all endeavours can taste success. An early starter, Dr Max clinics, a Max healthcare venture started in 2001, had to discontinue last year. "We provide primary healthcare from our hospitals now, and one 'Med centre' where physicians, specialist and all diagnostics including CT and MRI are currently available," informs Dr Narottam Puri, Executive Director-New Business Development, Max Healthcare. Max had followed the reverse of the 'hub and spoke' model for its Dr Max Clinics, but it felt that patients required a 'serious' environment for treatment with all referrals under one roof. It had a tie-up with Harvard International which they tried to replicate in India but did not work. "We feel that you need to have secondary and tertiary care hospitals in place before you handle primary care clinics on a standalone basis," avers Dr Puri.

Western Scenario

The 'mall' and 'medicine' combination may be a new concept in India, but is a prominent concept in the West. Launched by entrepreneurs and backed by significant capital, these retail health clinics provide walk-in service for a defined range of healthcare services, including immunisations, strep throat tests, sports physicals and other basic services. The clinics use a retail model and view patients as customers in search of a product. Among the retailers leasing space to the clinics are Wal-Mart, Osco Drug, Target Corp and CVS Corp. "Healthcare retail (the sale of non-reimbursement products and services by traditional healthcare organisations and doctors) is one of the biggest stories in American healthcare and will be worldwide as well," believes Gary Paquin, Director-Retail Healthcare Sales and Training Business Operations of the Paquin Group a US-based healthcare retail consultancy.

So, how different is India? "Absolutely different," clarifies Das, "In the West, the insurance drives such practices, and you do not have GP's, but nurse practitioners prescribing treatments in mall environment and I do not think Indian healthcare market is ready or are even willing to get consultation from somebody who's not in a doctor gown!"

Will visiting a 'mall' to seek treatment go down well with Indians? "It will depend on networking with referring physicians, promotion and care delivery. This concept may excel in an urban set-up, but for the rural areas one needs an economic model driven by health insurance," says Sinha. While some feel that the concept might take a few years to click in India, Vivek Shukla, Marketing Consultant, based at Dharamshala gives a different perspective. "It is not the question whether Indians are ready. It's more about creating a need than meeting a need."

Emergence of 'Mcmedicine'

What is the possibility that such ventures could lead to exploitation? "Unnecessary medications can be advised or investigations which need not be necessary might be suggested. I am not against privatisation, for I agree that the Government centers are less competent, but there has to be regulations on the growing private sector. Unless the market is regulated, exploitation is bound to happen," believes Dr Anant Phadke, Co-ordinator of SATHI, an NGO working on awareness of healthcare policies.

The West already has a term for this, McMedicine. A healthcare industry practice that is thought to over-diagnose and over-prescribe medication for profit or convenience—is how the Wikipedia defines McMedicine in the context of retail dimension of health. "McMedicine refers to the concept of 'minute clinics' or 'redi-clinics' being established in traditionally retail centers. We have witnessed these going in to retail establishments all over America (including companies like Wal-Mart) and as far away as Asia and Africa," informs Paquin. While it is premature to explore the possibility of a McMedicine occurring in India, the fact that primary healthcare is being emphasised and even rural areas are being considered, is good enough reason to cheer.

nancy.singh@expressindia.com