Parijat Ghosh, Arunava Saha Dalal and Sujay Subrahmanyan talks about the primary care clinics in India and highlights the global models followed, challenges that need to be surmounted in India and learnings from chains so far
Primary care providers are typically the first port of call for health-related issues for most Indians. With increasing affluence, awareness, and access, Indian patients want the best medical care for themselves and their families, and that includes the components of their primary care experience. For instance, patients today are neither inclined to wait in long queues at local clinics nor eager to visit super-specialty hospitals for their basic healthcare needs.
The 2020 ‘Front Line of Healthcare’ study conducted by Bain & Company shows that Indian patients are evolving and exhibiting higher levels of discernment when it comes to primary care clinics. For example, the Net Promoter ScoreSM (NPS®), a measure of customer loyalty, is at 23% for private clinics and significantly higher, 39%, for hospitals. While clinic-specific factors surely play a part in these scores, approximately 65% of patients are also troubled with long waiting times at their primary care clinics, pointing to higher customer expectations regarding convenience and in-clinic services.
Patients’ expectations of primary care clinics also have evolved. While quality of care remains paramount, patients also expect primary clinics to serve as their first point of contact with the healthcare system; help coordinate healthcare resources; understand their personal health history; suggest personalized preventive measures, diagnostics, and courses of treatment; create a comprehensive heath well-being and lifestyle plan; and assist with that plan’s execution.
Learnings from global analogues
Globally, organised primary care clinics have a salient presence and are doing more than just diagnosing ailments or dispensing medicines. They have developed end-to-end tech-enabled care delivery models that offer a superior customer experience.
Two primary monetisation models exist: a B2B2C-plus-B2C model (i.e., two revenue streams – payments made by institutional payers (e.g., insurance plans or corporates) or payments made by end-patient directly), and a B2C-focused model (all costs borne by end patient directly).
One Medical in the US is a prime example of the former. There, patient convenience is the primary hook, as the membership-based primary care chain promises more doctor-facing time, shorter wait times, and easy access to on-demand virtual care. Monetisation is focused on enterprise clients, people with health plans, or the end-consumer paying out of pocket—all underpinned by a strong tech platform, exceptional quality, and a world-class consumer experience.
On the other hand, Halodoc is a successful B2C Southeast Asian platform that has registered strong growth in an underserved emerging market. It offers an extensive suite of services, including diagnostics, pharmacy, and teleconsultation, and has developed a robust value proposition across patients, doctors, and hospitals.
The Indian landscape: Key challenges that stymie growth
While the $15–$20 billion Indian primary care market seems favourable for organized chains, the reality is that organized primary care has proven to be a tough business in India. Several notable players have ventured into the space and encountered structural issues and patient expectations that require time and effort to surmount. Lack of insurance linkage, high patient acquisition cost, low willingness to pay, and ‘star doctor’ culture are the key challenges.
However, these challenges have not dissuaded organized primary care clinics from making strong headway; organized primary care constitutes a minority share of the Indian primary care market, with Apollo Clinics enjoying the biggest share of the organized market (albeit a small share of the overall market, which includes many unorganised ‘home’ clinics).
So far, two distinct models have gained traction in India: the company-owned, company-operated (COCO) salaried model and the franchisee model. Each has its own unique advantages, and both face the same challenges due to structural factors, such as the absence of star doctors (i.e., renowned general physicians, specialists), maintaining high levels of service, and lack of adequate insurance coverage amongst patients, leading to limited ability to pay.
Even hospital chains that have entered the organized primary healthcare space have faced challenges in converting clinic footfalls to hospital referrals. Patients typically tend to go to a nearby hospital or seek a second opinion at a hospital that may not necessarily be the one recommended by the clinic chain.
Lastly, scaling up operations has not been easy: choosing the right specialty mix (single specialty vs. multispecialty) or format of care delivery (pure-play physical/digital vs. omnichannel) in each micro-market is challenging and requires a thorough understanding of patient behaviours.
Lessons from organised Indian primary healthcare chains
An assessment of the journey of chains in India so far offers some interesting lessons for the future.
In terms of specialty focus and mix, two potential pathways include going deep in a single specialty or developing ‘full-service’ offerings across multiple specialties.
Clinics focused on single specialties are typically unable to scale unless they are focused on specialties that have distinct characteristics (e.g., dental that is high value, ophthalmology that gets high footfalls) or have a relatively higher importance to continuous quality of life.
Outside of clinics focused on select distinct specialties, clinics must develop a comprehensive offering across multiple specialties. Patients look for ‘full-service’ offerings, including doctors in four to five core specialties; diagnostics with complete pathology and core imaging; medical treatment; and pharmacy services. The formula for success is to have a trifecta of healthcare, service excellence, and retail presence.
Clinic-hospital referral linkages remain difficult to establish; nevertheless, hospitals can add significant value in a franchise model with their brand, processes, and clinical protocols.
While star doctors may be key to bring in patients initially, delivering quality care, excellent service, and seamless customer experience is the only sustainable way to drive long-term footfalls.
Critical success factors to win
Going forward, omnichannel (i.e., both physical and digital) models of care delivery is expected to win. While physical channels (touch and feel) will always remain important, primary care clinics will also need to adopt digital channels of care delivery.
Consumer acceptance for telehealth is here and is here to stay. According to our 2020 Front Line of Healthcare Survey, consumer willingness to pay for health-tech solutions in India is high across age groups, even among relatively older groups (e.g., about 70% of those over age 51 are willing to pay for a long-term illness management solution). Across APAC, adoption of telemedicine platforms is expected to increase by approximately 110% over the next five years, whereas adoption of long-term illness management platforms is expected to increase by about 75%.
Key considerations for digital channels will include providing easy, on-demand access to doctors for SOS (emergency, urgent care)/second opinions and offering a digital repository of healthcare records.
On the other hand, for physical channels, clinics will need to develop the right format for the right micro-markets and rely on franchisee-led expansion with a committed physician who is a star doctor as well as entrepreneurial.
To drive loyalty/footfalls across both physical and digital channels, primary care models will need to ensure high-quality customer service, the presence of core specialties (e.g., internal medicine), and the patience required to institutionalise processes.
In conclusion, the Indian primary care market is ripe for disruption for both independent clinics as well as hospitals. It lies at the heart of the booming health-tech landscape, and there is significant headroom for a tech-enabled omnichannel primary care delivery model that provides quality, comprehensive care and maintains a targeted focus on customer engagement and loyalty.
Parijat Ghosh and Arunava Dalal are Partners and Sujay Subrahmanyan is an Associate Partner at Bain & Company India. They are leaders in the firm’s healthcare practice in India.