Home-based healthcare (HHC) services are not new to India. Yet, the recent flurry in the market as a result of fresh focus on organised and accessible home healthcare services signifies the changing dynamics of the Indian healthcare delivery landscape. “Home healthcare as a concept and business has existed in India for many years,” says Vishal Bali, Co-founder & Chairman, Medwell Ventures, Bengaluru. “However, in recent times this opportunity is being pursued under new business models by organised players and that has given the sector tremendous visibility since there is new customer centric orientation and specialisation of services that these players are bringing to the market,” adds Bali who has recently acquired Bangalore-based Nightingales Home Health Services.
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“The size of the (home healthcare) industry in the next 10 years would grow to over $15 billion in India.”Talking about the new buzz, K Ganesh, Co-founder and Chairman, Portea Medical says, “Much of the excitement stems from the fact that the Indian healthcare industry is at an inflection point. The first phase of healthcare development was in the hospital space; now that is largely completed. Hence, post discharge care, geriatric care, and chronic disease management, all key areas for home healthcare, have come into the spotlight.”
The next big bang
There has always been an unmet demand for quality healthcare in India. In the last couple of years many private players have invested in the sector and new investors are still flocking in. But, a large vacuum still existed for HHC services. Neighbourhood clinics and home visiting doctors were not able to fill this gap. While HHC was already a billion dollar market in the developed countries, Indian market was being serviced by small agencies or independent service providers reaching out to a very small consumer base. “Today, India has world class tertiary care facilities, latest equipment, best doctors and specialists but anything outside that, like organised, branded, high quality reliable home healthcare, is non-existent. This is the area we are addressing,” explains Ganesh, who provides HHC in 18 cities in India.
In fact, HHC is said to have lowered the cost of healthcare in the developed countries, especially for the elderly. India, has just recently started to focus on the special needs of the elderly and is trying to set up national programmes for the same. Including HHC in this environment is an ideal way to deliver care to the elderly. “There are established models of home healthcare in the developed countries which have documented excellent continuity of care in the out of hospital setting, particularly for the elderly population. The US continues to use home healthcare delivery models to reduce the cost of care and the insurance sector has very effectively utilised home healthcare companies as adjunct to hospitals to optimise the level of care to patients. All these factors make home healthcare an excellent care delivery model for India,” says Bali.
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Key Players in the Market
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Name
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Promoter
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Location
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Employees
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| Portea Medical | Krishnan Ganesh and Meena Ganesh | Bengaluru |
700
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| HealthCare At Home India | Burman family, promoters of Dabur India Ltd & Healthcare at Home, UK | Delhi |
200
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| Homital | Dr Rajesh Vasudeva & RR Energy | Delhi |
40
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| India Home Health Care | V Thiyagarajan and BAYADA Home Health Care, US | Chennai, Bengaluru |
300
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| Nightingales Home Health Services | MedWell Ventures | Bengaluru |
150
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Market talk
India’s HHC service industry, which consists of rehabilitation service, unskilled home healthcare, infusion therapy and respiratory therapy, is growing faster than the private hospital market. “Portea believes the home healthcare market to be between $ 2-4 billion and growing more quickly than the hospital market,” says Ganesh.
So how do the two business models compare? “The private hospital business is a different business focused on return on capital employed and average revenue per operating bed while home healthcare is all about last mile logistics, using technology and healthcare workers to ensure timely care at doorstep in a convenient and affordable manner,” explains Ganesh. Providing a different view, Bali says, “Home healthcare starts where hospitals stop as far as treatment of medical events are concerned. However home healthcare can play a very vital role in management of chronic diseases and also preventive care.”
Gaining market share
There are a number of small players dotting the HHC market space. Since 2013, the space has seen aggressive M&A activity and JVs to capture majority share in the market. Global players making the first move propelled many Indian entrepreneurs to take note of the growing demand.
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“We are targeting a business of Rs 500 crores in the next five years.”The Western players who have already established successful businesses based on this concept have been eyeing the untapped Indian market. Understandably then, two large global players, US-based BAYADA Home Health Care and UK’s largest home healthcare providers Healthcare At Home, are making inroads into the Indian market. Both the companies have chosen not to venture as standalone entities into India. While Bayada picked up 26 per cent shares in the Chennai-based India Home Healthcare in September 2013, Healthcare At Home joined hands with the Burman family, promoters of natural healthcare products maker Dabur India to launch HealthCare At Home India (HCAH ) based at Delhi in November 2013. “HealthCare at Home is a joint venture between the Burman family, promoters of Dabur, and founders of the UK-based Healthcare at Home. The two partners will invest Rs 200 crores in the next three-four years to expand operations in India. We aim to break-even in the next two years,” informs Dabur Group family scion, Gaurav Burman.
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“Healthcare at home fulfils an unmet need in the market. I therefore see a great demand for these services in the future.”The HHC market has also attracted Indian entrepreneurs like Bengaluru-based serial entrepreneurs K Ganesh and his wife Meena Ganesh; Dr Ferzaan Engineer, Chairman of Cytespace Research and versatile healthcare administrator Vishal Bali, former Group CEO, Fortis Healthcare, among others.
Ganesh bought Delhi-based Portea Medical in 2013 and raised eight million dollars from Accel Partners and Ventureast. Bali and Engineer led MedWell Ventures acquired Bengaluru-based Nightingales Homes Health Services for an undisclosed amount in April 2014. While Homital Medcare was started with an undisclosed amount of seed funding from Chhattisgarh-based RR Energy and personal capital from Dr Rajesh Vasudeva, MD of Delhi-based Homital Medcare. “We have invested about one million dollars and we will continue to invest and expand over the next two years,” says Dr Rajesh Vasudeva, MD, Homital.
Growth drivers
India’s ageing population, changing disease patterns, rise and shift of acute illnesses such as heart failure into chronic diseases have all added to the demand for HHC. “Ageing population, medical developments and the nuclear family will lead to an increasing demand for home healthcare. In the future, home healthcare will be an integrated part of recuperation together with hospitals and doctors, like in the Western world. The market will grow to a multi-billion dollar size over time,” says Frank Goller, CEO India Home Health Care, Chennai.
Understandably then bedside care is one of the most requested service at HHC. “Care of disabled and bed ridden, medication administration and management, physiotherapy and post hospitalisation care are some of the most requested services at Homital,” informs Vasudeva.
Talking about the services Burman says, “All our services are much in demand. But to name a few, our ICU services, post operative care services, elderly care services, chemotherapy services and physiotherapy services have particularly become very popular.” “Over the last three years, healthcare delivery in India has attracted a high degree of investments and interest from the private equity and venture capital world. The investing world understands the demand-supply gap of healthcare in India and healthcare at home fulfils an unmet need in the market. I therefore see a great demand for these services in the future,” opines Bali. Care in the comfort of home, which also saves time and the cost of hospital stay is not yet ingrained in the public consciousness.
Revenue, returns and expansion plans
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“We would be increasing our penetration in Delhi NCR and then move to six metros in the next two years.”At present, most start-ups are hesitant to share revenue details and targets, but are forthcoming about expansion plans. “We expect to break even in 2016. Our long term projections are $50–100 million. But for the current year our projections are about Rs 16 million,” says Vasudeva. “We have successfully completed our pilot in Delhi. We would be increasing our penetration in Delhi NCR and then move to six metros in the next two years after which we will be going to the tier two cities, moving towards a pan-India presence in the next few years,” he adds.
Ganesh sketches his plans for Portea and informs, “Portea aims to be one of the largest healthcare providers in Asia. Since our Series A fund raise of $ eight million six months back we have grown to current status of 18 cities, with over 15000 visits a month through over 700 employees across India. We plan to be in 50 cities in India which we will cover in the next 24 months. We look to raise our series B funding in the next 12 months. We will add several new package services catering to chronic and geriatric patients. We would also be launching proactive monitoring programs through personalised monitoring devices this year.”
Confident of his business, Burman outlines his plans. “As I have already pointed out, we aim to break-even in the next two years. We are targeting a business of Rs 500 crores in the next five years,” he says. “We started our operations in Delhi in April last year. After a successful start in the national capital we entered the Punjab market in March this year and in Jaipur, Rajasthan. Plans are afoot to cover whole of Punjab, Rajasthan and Himachal Pradesh by the end of this year and go pan-India in the next two years,” he adds.
Reflecting on IHHC’s growth path, Goller says, “We used a small investment in the first two years to develop the concept and to gain experience in the market. With our partner BAYADA Home Health Care joining IHHC in 2013, we are able to invest up to $10 million in the next years. On city/office level, the break-even has been achieved beginning of 2013.”
“In the next years we will invest in people and in geographic expansion to other metros. We are targeting cities with more than one million people right now. Our focus is on organic growth as we want to build a company based on shared values and goals. In 2014 we will add two to four cities and at least six more in 2015,” he adds.
Sharing the vision of Medwell team for enhancing Nightingales in Speciality Home Healthcare Bali says, “Medwell expects to invest $15-20 million in this business, increasing its subscriber base to 500,000 families and reaching 10 Indian metro clusters over the next three to five years.”
Challenges
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“Introducing accreditation will help standardise the business and care processes.”While HHC has a promising future it does have its own challenges. “One of the main constraints is the availability of high quality manpower suited to work in the home environment,” says Dr Anitha Arokiaswamy, President, India Home Healthcare, Chennai. “Absence of structure and processes in the organisation is another challenge,” she says. Mulling over the challenges faced by the industry, Ganesh says, “Home healthcare is a very logistically intensive and service-focused business, so getting quality right is not only absolutely required but also very challenging.” Clearly, convenience and quality are the mainstay of the industry and the company that gets it right will succeed in the long run. “The winners in this space will be determined based on the quality of their execution. Scaling is very difficult unless you have a strong technology backbone as there is no central place like an hospital where healthcare is delivered. This also requires large investments in technology, training and in systems and processes. So the upfront capital required is high and the model becomes profitable only at large scale. So, unless you have a strong execution capability understanding and ability to build technology , the ability to hire , train , deploy monitor and motivate thousands of remote healthcare delivery employees, the business will not be able to scale and succeed,” Ganesh says.
People management
Indeed managing a large flock of employees is pivotal to success in this industry. “The shortage of staff in healthcare is a worldwide problem. We have established plans to ensure that we will become the employee of choice for any healthcare staff in India,” says Goller. “We have worked heavily in the last years to establish relationships which ensure that recruitment will be manageable. With our partner BAYADA we will be able to also recruit more registered nurses as we can offer them jobs in the US also,” adds Goller.
With competing providers in the space, attrition and poaching of trained employees will increase. “The attrition has so far been much better than in the industry. One of the most important reason is that we are able to provide a very enabling environment to them. So they can provide one-on-one care to the patient, which they would not be able to do otherwise. We also have better salaries, flexible working hours and other such benefits because of which people stick to us,” says Burman.
Providing his views, Goller says, “We are all about the people and we see that our staff appreciate that. We are on the right way to ensure that attrition is low. In the last three years we have seen that attrition has gone down to a low on figure percentage per year! This shows that we have the right attitude and process to retain the staff.”
“Poaching by competition will happen if they pay above market salaries, but we have seen that even though staff is attracted by those, they realised quickly that work is not all about money but also about team work and respect for each other – something IHHC is proud to be the leader in the market – and return back to us,” he adds.
Training and education
At present there is no industry ready course for HHC workers. However, the recent approval of a three-year-course, Bachelor of Science (Community Health) in state universities for specialised cadre of healthcare workers in rural areas will ease some burden on the companies looking for trained manpower. Others are instituting their own training centres to create a steady stream of workers. “We have a constantly evolving training and recruitment programme,” informs Vasudeva. “We are co-ordinating with training institutes and investing in our own training facilities,” he further adds.
Speaking on creating awareness about the job prospects in the industry, Goller says, “Working with NGOs and media to build awareness for a career in home healthcare is another initiative of us. Currently, with the support of BAYADA, we are developing a certification of home care aides and a residency programme for registered nurses to certify them on high-tech tracheostomy care. We will be able to offer this to all of our staff soon.”
Other providers have an equally supporting view on staff training. “We have already developed an excellent training programme in partnership with Berkeley HealthEDU which has its own training and certification facility. All our providers undergo a six-week training programme and are AHA-certified BLS providers,” informs Burman.
In time to come
Home healthcare will be a dominant force in the Indian healthcare delivery landscape in the coming years. Many of the current business models in the home healthcare space will mature to provide niche services with good clinical outcomes to consumers. Accreditation will lead the way to standardisation. “There needs to be some regulation/ standardisation to ensure that high quality of care is provided to the patients in need. It would be critical as the nature of business itself has some inherent risks for both patient and staff safety. We need to be proactive and set this up, as more and more entities are entering this industry. Introducing accreditation will also help standardise the business and care processes,” says Arokiaswamy.
Predicting better days for the industry, Ganesh says, “Home healthcare will be very much the norm in India in the medium term. Patients will only go to the hospital for procedures and specialist consultations and receive all other healthcare services in the home setting. We expect there would be three or four major players in India. The size of the industry in the next 10 years would grow to over $15 billion in India.”
Sharing his enthusiasm, Bali says, “Home healthcare will continue to see upwards of 35 – 40 per cent growth on a per annum basis since the sector is at a nascent stage and more number of entrants will ensure that the business continues to clock this level of growth.”
While the industry awaits innovative insurance packages for HHC it has no doubt that insurance will play a bigger role in the success of this segment. India is the perfect platform to launch innovative healthcare services and solutions. It will be interesting to watch the success story of HHC providers unfold on this large canvas.
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