CNBC-TV18’s Young Turks, in its 11th year of highlight entrepreneurial wonders, presents yet another master-class on what it takes to scale up, build the team, create a brand and delight customers.
This edition of Young Turks Tutorial: India’s medicine man — the country’s most successful heart surgeon and the founder of one of the best cardiac facilities in India — Dr Naresh Trehan, the Chairman and Managing Director of Medanta, a multi-super specialty institute. This cardio god, as he is often called, will share with us his prescription for building a successful healthcare business.
More than 48,000 heart surgeries in a career spanning over three decades. He is the man Indians trust with their hearts. An internal optimist with the huge appetite for life, Trehan’s calm, cool, almost unflappable exterior gives you no indication that he spends most of his waking hours dealing with life and death.
After an illustrious innings at the Escorts Heart Institute and Research Center and plenty of recognition, Dr Trehan has been single-mindedly working on building his dream institution, almost to the point of an obsession.
Today, his dream of building a world-class hospital is a reality. While questions remain on the viability of the venture, Trehan is unperturbed and believes he will prove the naysayers wrong. In his words, he is driven by a different madness.
In discussion with Dr Trehan are four start-ups that are looking to make it big in the over USD 40 billion healthcare market in India. Each of their businesses revolved around the idea of affordability from low cost insurance to online healthcare retail and even telemedicine.
Here is a look at their ventures.
Siddharth Rastogi, Co-Founder & CEO, Meta Wellness,
“We are pioneering a field of medicine that is one of the most promising of modern medicine but it is virtually not existing in India.”
The idea of giving affluent Indians access to a lifestyle management programme is what brought Siddharth, Jyotsna and Ashish together. So the trio partnered with the Leela Group and setup Meta Wellness, a healthcare firm that specializes in lifestyle medicine. Services including testing, consultations, customize treatments, residential stay, meals and also post aid follow-ups priced between Rs 40,000 and Rs 1.5 lakh. With seed funding from the private equity arm of HDFC, Meta Wellness is now looking at a Pan India presence.
Sameer Maheshwari, MD & Co-Founder, HealthKart.com,
“We are an e-commerce company focused on selling consumer healthcare products online.”
For jobseekers a degree from Stanford or Harvard could mean a ticket to the good life. But Sameer Maheshwari and Prashant Tandon decided to chase their entrepreneurial dream. So they set up HealthKart.com in 2011, an online one-stop shop for all your healthcare needs. Selling fitness health and personal care products, HealthKart generates revenues of Rs 2 crore every month. Having received, a recent second round of funding of USD 7.5 million from Kae Capital, Sequoia Capital and Omidyar, Sameer and Prashant envision a healthy future.
Nehha Rajpal, Director, Ekohealth
“I am so glad to be a part of Young Turks Tutorial with Dr Trehan.”
The 37-year-old Akash Rajpal and Nehha Rajpal believed that quality healthcare should be available to all. With this thought in mind Akash launched Ekohealth, a venture that helps uninsurable patients like senior citizens and diabetics, avail of affordable healthcare services at an annual family subscription of Rs 1,000. With 1,500 members on board and a projected turnover of Rs 80 lakh for 2012 they are hoping to touch 10 million member mark in the next five years.
Amit Jain, Co-Founder, HealthPoint Services
“I look forward to discussing with Dr Trehan on how we can bring in a high quality in primary healthcare.”
Co-founded by Amit Jain in 2009, HealthPoint Services brings primary and preventive healthcare to rural India. Setting up RO plants in villages in Punjab, Amit provides purified water at 10 paise per liter. HealthPoint has also set up rural diagnostic centers that provides basic healthcare services like blood-test at discounted prices with the most expensive test being priced at Rs 40. HealthPoint’s portfolio also has village dispensaries were medicines are sold at 50% discount. Both the water and healthcare services business combined have clocked revenues of Rs 10 crore since 2009.
Next page: Transcript of the discussion.
CNBC-TV18’s Shruti Mishra: Dr. Trehan, the Indian healthcare industry is estimated at USD 34.2 billion. A lot of VCs that we meet are talking about the space. A lot of startups have come in this space. But really still the need of affordable healthcare is not being met. So, what according to you are the three things that should happen so that we see an equal distribution of quality healthcare services?
Trehan: First you go back to basics. The fact is that we have a inherited healthcare system over the last 65 years actually coming from British times also, which is at best you can say is totally broken and what we are trying to do is to fix a broken system and then we are trying to put plugs, here there everywhere where the leaks are. At the same time that we are doing that because that’s the need of now. We need o go back to the point of reinventing ourselves for India, but at the same time for young people like you who are starting in that whole process you should stay where is that full blueprint for healthcare in India at all levels because you have never been addressed in that way.
Where you are starting from is the point that is the concept of the Primary Health Centres (PHC) is the concept of the district hospital or the civil hospital or a private hospital. How will it all come together to provide healthcare to India that’s our challenge. We also know that it is so costly to provide healthcare that even the most affluent countries cannot afford it. So these are the things that are hovering around us to say how do we invent a new system for India, which will be able to bridge all the problems that we just talked about.
Mishra: Neha from Ekohealth, actually they provide these health discounts so they are somewhere in the way of providing affordable healthcare.
Neha Rajpal, Dir, Ekohealth: What we do is we are catalyst between the patient and the healthcare provider and we were surprised to get 250 patients 1.5 months and the major challenge is the funding?
Trehan: What I would suggest is that you must determine in your business plan what is your critical mass that you must reach because you do too early you will give away too much. So although, the earlier years are difficult, but to spend another 6 months, a year of difficult times and get yourself to a level where you have a working business model, your funding will become not only possible, but also give you a fair shake for the future. If you also take on the function of making a catalog of best doctors then you are an advisory also, not only a discount service because discount service is a very low-hanging fruit.
Mishra: Today we have the advantage of using technology to really bridge the geographical divide and Amit, here is doing it. It is quite unbelievable that how you all are providing these tele medicinal consultations for as little as just Rs 20. Amit, patients still want the doctor to touch them, see them and then give them advice. In this tele medicinal thing do you have this issue of accountability?
Amit Jain, Co-Founder & Pres, Healthpoint Services: In terms of the touch and feel aspect definitely the patient might tend to miss that, but increasingly they are getting more familier and more comfortable with that. So, we have combined both heath and water, water ensures footfalls and it gets translate into there health queries also being addressed. Dr. Trehan, I would like to kind of get your inputs on how can technology further bridge the divide that the primary healthcare currently is seeing vis-Ã -vis the high quality tertiary healthcare that Medanta or the other corporate group of hospitals are currently providing?
Trehan: Your concept definitely has traction. Now you need a link with that basis person who can connect with you and be able to at least say the symptoms in a comprehendible manner because what happens is people get confuse. At the village level, we have patients coming in who say (speaks in Hindi) now what do you make out of that?
Jain: We experience that, absolutely.
Trehan: I am telling you so you need somebody on the ground who will say this is what your symptom is and let me actually have you interpreted in a way that you can actually make some sense out of it and what you can do and like you said the water is like a honey trap it gets the footfalls, it gets people to come to you, you provide whatever you can do at site. You can give incremental value because there are many other things, which they need, which are related, which when they go to an independent place they don’t know the price, they don’t know the quality, so you could assure that because there is a huge amount of spurious drugs being distributed at all sorts of prices.
Getting quality staff is one of the biggest challenges that the healthcare industry is facing. For instance, even though most of India’s villages have primary healthcare centers, there is an 18% shortage of doctors. How do we overcome this challenge? Here are Dr Trehan’s ideas on capacity building and rural healthcare.
Mishra: There are a lot of multi-specialty hospitals that are coming up and this has led to a shortage of quality staff. So, do you have this problem and how are you tackling it?
Trehan: This is a very acute problem we have. We are now training the trainers to train the staff from nurses’ helpers to GDAs to other staff and we have ambitious plan of training up to 5 million healthcare support services.
Mishra: For Medanta, it is a brand that can afford this training and then hiring, but for these startups — I am sure you guys also face these hiring issues. What would your advice be to them to get good quality staff?
Trehan: Training does not cost money actually speaking. It requires pain. You know the standard and you want to deliver that standard. So, when you are a startup you don’t have thousands of employees. Today I have 5,000 employees to train, that’s one challenge, but if I had five, I could train them myself.
Mishra: We are also seeing this phenomenon that I spend so much on my medical education, I want to work in a metro. What happens to quality healthcare in rural areas? Do you have this problem?
Jain: We are regularly being faced with this situation where the community feels, healthcare is only required when there is a disease. Healthcare is still not coming in terms of wellness, lifestyle, nutrition, water and things like that. So what can be programmes, which can further drive it with clear metrics, which suggest that people are becoming more aware and more conscious about that?
Trehan: This is another societal challenge. Obesity you take an example, so we say that obesity will lead to the following diseases at any age. You show examples of it then you hope and pray that the message will sink in that if you don’t take care of yourself today, you can get diabetes, you can get heart disease, you can get cancer, your knees will go, so you keep digging in the message and hopefully some of it will go. If you connect the two of you, he is into lifestyle management, you are into early detection discovery and I think that being aware of all the problems that you have talked about by itself is a good development. The government has – I don’t think – still realized the value of civil society. The moment they recognize the strength and the resource available in civil society, we could change this country in ten years.
Maheshwari: On that same point you mentioned that government and entrepreneurs there is a disconnect, to maintain the quality, you would be more expensive to consumers and then you will be competing with people who are operating at a lower sort who are trying to maybe get around the law and all that. So as an organized player or as an entrepreneur, how do you communicate the quality, branding and what other things that you can do and how do you stay competitive with government being disconnected?
Trehan: If you want to look for a devise which you need and you have the full array in front of view and you can be assure them overtime that you are giving them a fair price and the quality is decent, you will have to build your reputation on that. It doesn’t happen just because you said it. The other thing is the medium that you are using is the net. You will find it difficult because you cannot do pharmaceuticals on the net without a prescription. You are lucky that you are on the net because people cannot find you to break your head because if you are going to ruin the business of the local guy – this has happened.
Mishra: We have heard stories of counterfeit drugs and do you think it is a viable business idea to sell drugs online. HealthKart sells pretty much all healthcare products under one roof, so would you advise him to actually keep – interrupted –
Trehan: Till you have e-prescription and validity to that, I don’t know what the regulation is – interrupted –
Maheshwari: Regulation is not defined. So basically the drug law that governs India is still drugs and cosmetics act which was formed in 1942 and has only been amended once. So there is a lack of regulation but I believe this e-prescription or online delivery can leapfrog the country from almost couple of years ahead.
Dr. Trehan has spent last few years on realizing his dream of building an institution with the highest standards of healthcare delivery at an affordable cost. Now that dream has manifested in the Medanta Medicity which offers not just healthcare services but also clinical research, education and training but what inspired Dr Trehan to give up on the new York dream for New Delhi.
Trehan: People with mitral valve disease, people with coronary artery disease, people with cancer dying right in front of your eyes, you are supposed to be a doctor to fix them and they are looking at you, please fix me but you cant. So, that’s the level where I started my career. What is the difference between countries that dictate their own destiny in healthcare and India? The answer was clear that if you take United States there are endless institutions like Howard, Johns Hopkins, Mayo Clinic, Cleveland Clinic, and Stanford that not only provides the highest end of care but also are the fountainhead of all new knowledge which we so far go there and ape it here. So, I said if we are going to create India as its own destiny, then we need to create an institution like that.
Hence, the idea of Medanta because I believe that as strong as modern medicine is, Ayurveda has the same potential but it got left behind because we have never tested in the scientific methodology. So, if we take systematically and start the research on Ayurveda, I am sure we are going to be able to find a fusion between the two, which will be hugely more powerful in treating disease. It will be less ingressive to the human body and it will be eminently less expensive, maybe half the cost.
Mishra: We have these startups here who have these operations in place. What would your advice be for them to really create a brand for themselves like Medanta perhaps?
Trehan: First, you get to the essence of it to say healthcare is not run of the mill business where you say I am going to produce this; I am going to sell it and make lots of money. So, I think that first thing first is clarity and purity of thought if you are going to be in this business because you can to do a lot of damage. You sell bad drugs, you start giving wrong advice, you take the money and you don’t deliver the end result — you can probably do the least damage.
Second point is quick results is not what you are looking for because that’s not this field. There is no need to indulge in activities which are not ethical in the sense of fee splitting, unnecessary procedures, advertising because this is a business of faith.
Mishra: Alright, Dr. Trehan before we let you go, we are celebrating 11 years of Young Turks. We would want 11 commandments from your side for the entrepreneurs who are starting off with this space.
Trehan: Your purity of thought that you are going into a social sector, social business absolutely no confusion.
The next would be you will say this is a business with a soul.
Third really very important thing is good medicine makes good money but good business does not make good medicine. Always see – sympathetic behavior pattern is very key or crucial to your success. Never get deterred by slow moving, don’t give up chin up and realize that it takes time.
One thing that I will tell you is that when you find your niche, always look forward and backward. What is going on, on the medical side of it? Where is the science going? Difficult times sometimes tempt you to take shortcuts and that’s the worst thing you can do to yourself because that’s going to haunt you at sometime in your life.
Dr. Trehan, here’s wishing you and Medanta the very best of luck. But to truly achieve the dream of addressing the healthcare needs of India’s billion, the Medanta model will not be enough and perhaps like our young startups innovative Indian solutions will be incubated, tested and commercialized with the right support and funding. CNBC-TV18 does hope that this tutorial has given entrepreneurs looking at the healthcare space in India some ideas to think about.