Medicover, European private healthcare provider, is set to enter India with the fertility business. John Stubbington, CEO, Medicover was in India recently and spoke to M Neelam Kachhap about the company’s plans for India
Why did you choose to invest in India?
The Medicover businesses were launched by the Swedish family which also runs the Oriflame cosmetics brand. The brand has a strong presence in India. We have been in India for a decade, so we evaluated the market and decided to invest here. There are more than 30 million infertile couples in India. So, it seemed like a significant opportunity for us to bring the best clinical practices, trust, transparency and high quality services by leveraging our European experience and expertise. This is a large but fragmented market with lack of regulations. The IVF market in India has grown at a fast pace, with IVF cycles growing at 18 per cent CAGR. But, the penetration of the IVF market is significantly low in India. There are only 2,800 cycles/million infertile women in the reproductive age group (20 – 44 years) as compared to China which has 6,500, US’ 46,042 and Germany’s 50,884. The key challenges are lack of awareness, affordability and accessibility.
How is the Indian IVF market different from the European market?
We analysed that the Indian fertility market is focussed on IVF, with a high number of cycles before people either give up or achieve success. We don’t work that way and this is the difference we could bring to the market. With our model, we basically look at fertility in a wider context. We try to identify what the problem could be; some times it’s stress; sometimes people just need counselling. At times, it is the need for lifestyle changes like improving the diet. We try to identify the problem and treat it with the right approach. We are proud that 90 per cent of the couples who come to us seeking help are successful in having a baby. We also have a broad proposition in other areas of care. We also feel that the fertility segment is different. It is an emotional journey and people really need the right kind of environment and the best possible channel to be able to create a family. We just make sure that the whole experience is a positive one for our customers.
There is a big difference in terms of clinical facilities available in India as compared to the developed markets. In India, air quality is very poor. We once saw that dust from a construction site was entering a lab facility, this can create serious problems. Some facilities allow people to enter the clinical environment. For instance, I hadn’t worn the appropriate clothing go into a sterile environment but was still allowed. So, I feel that clinical standards are very high in Europe and it affects our outcomes.
Tell us about your fertility business.
We bought our first fertility business in 2012 and we are competing with business that have experience of over 15 years. Medicover Fertility represents Medicover’s first step in bringing the brand’s comprehensive range of healthcare services to the Indian market. What will make us stand out in India is our unique model of patient care which is ‘Right Care, Right Place, Right Time, Right Outcome’. I have a very simple motto; if the care that we give is not good enough for my mother then it’s not good enough for my customers. Therefore, we constantly micromanage our business to look at aspects we can improve. In our fertility business we offer modern facilities in an environment that is positive for doctors and we make sure we implement our standards of care. We work very closely with local market clinicians so that we can improve the clinical outcomes of our customers.
Your services are backed by insurance in other markets whereas in India it would be out-of-pocket expenditure?
Not necessarily. In Poland, where we are a leading provider of fertility services over the last three years the government has a programme to fund fertility treatment but majority of the patients choose to not go through the government programme. They pay out of pocket so that they have more freedom in terms of the choices available to them. Funding is available, but they have concerns on the quality of the services they get. In UK, we see 100 per cent out of pocket expenditure even though a government funding programme is available. We have managed to succeed in countries where there is funding and no funding. We want to be a premium healthcare service provider and everything we do leads to it. We would want to focus on right outcomes, we don’t want to compromise. We don’t feel healthcare is about discounts. Even in India we will keep our rates comparable and appropriate.
What are your plans for India?
Medicover is committed to becoming the leading patient-centric fertility solution provider in India. We will open nearly 50 clinics in three years – 10 in the first year alone. We are first establishing clinics in Delhi NCR, and then we’ll move to Punjab, Haryana, Uttarakhand and Uttar Pradesh. Clinics in Maharashtra and Rajasthan will follow. We will have four clinics within the next two months, all located around Delhi. The first two will come up at Gurgaon and then Noida. Medicover Fertility expects to generate revenues in excess of $100 million in five years. A total of $50 million will be invested to build the Medicover Fertility network of clinics.
We won’t franchise and we won’t outsource. We are passionate about providing right quality of service, we can’t do that unless we employ the right people, they work with us to improve our service and thereby improve clinical outcomes.
Our investment per clinic is around $2 million per clinic and in the next three years, we will invest $100 million into this.
Medicover as a group, generated a revenue of $500 million last fiscal, which will be $600 by the end of the year. Currently, fertility business is about five per cent of our total turnover, we will double this in the next few years. India is an exciting market for us and we expect 10-15 per cent of our total revenues to come from India in future.
How will you bridge the manpower gap, which is crucial for your business?
That’s very true. Manpower is crucial to our success. If you look at our history you will find that we provide excellent environment for our doctors to work in. Since we create the right environment for doctors where clinics are equipped with modern equipment, good computing process, we expect doctors to give us excellent IVF cycles and provide the best service to our customers. We provide a progressive environment for the clinician to work in. We are confident that after our first wave of recruitment our doctors will help us find more doctors who would want to work with us. Secondly, we are experienced in this area of health; we have a network of doctors in our existing business who will come over and help us train people. We will be making investments in terms of training. We will recruit experienced fertility specialists. Build capacity. We will be developing training programmes at all levels.
There are other international fertility services providers in India? How is Medicover different from them?
We have experience in different markets across 14 countries. In fact, we are present in locations, where most providers haven’t gone to. We are the first European family-owned organisation bringing in 100 per cent investment in healthcare delivery. We take time to build our business. Medicover owners have already invested in several businesses in India over the last few years.
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