Submitted by:

Venkatesh K.G

B-Plan – SAAS in Indian Healthcare sector

• Hospitals face regular issues with loyalty. Patients switch hospitals, in some cases it is seen that they do it even before the treatment is completed.

• In India healthcare is plagued with issues &mistrusts.

• Indian hospitals like Apollo ,Fortis and Manipal group have started aggressive expansion / tie-up with other hospitals in abroad.

• Thailand ,Singapore and India are among the top 3 nations in Asia for medical tourism and accounts for 60% of revenue under medical tourism.

• As observed, cost of medical treatment is cheaper than other Asian nations. So there is high growth prospect in this industryconsidering rapid growth of specialty hospitals in India

• Medical tourism in India is growing at the rate of 25-30% in India and expected to reach USD 158.2 billion by 2017. Package pricing makes it attractive for foreigners because of no insurance coverage for foreigners .

• India has positioned itself as a preferred spot for cardiology, orthopaedics, nephrology which can be very well handled under package pricing.

• Insurance penetration in India is low which makes package pricing a feasible option for Indians as well.

Procedures United States Thailand Singapore India

Coronary artery

bypass surgery

$70,000 – 133,000 $8,200 $14,000 $7,500

Hip replacement $33,000-57,000 $7,000 $11,000 $6,200

Knee replacement $30,000-53,000 $6,500 $9,000 $6,000

Prostate surgery $10,000-16,000 $4000 $5,300 $3,800

Kidney Transplant $40,000-45,000 $16,000 $20,000 $12,000-15,000

Source: docstoc

Introduction

Indian Healthcare Industry

Problem Analysis

Service Provider’s View

Customer’s View

New Trends & Opportunities Solution In A Nutshell

• Retention of customers• Healthcare industry is

characterized with mistrust and unfamiliarity

• Lack Of Transparency –concerns regarding cost structure

• Low insurance penetration• Low penetration in rural areas

• Number of multi-specialty hospitals is increasing due to the rising middle class population (547M by 2025)

• Hospital chains are aggressively expanding entering into alliances with foreign institutions

• Cost of treatment in India is low compared to West. Due to this medical tourism is growing at a CAGR of 30% and expected to reach $158 Billion by 2017

• Issues addressed

- Increasing customer Engagement• Customized Messages• Important Dates alerts• Trend alerts• Booking slots

- Pricing Dilemma• Cost transparency• Packaged Pricing• Efficient Pricing will help

customers to select combination of services from an array of available services

• It will help the customers to understand what services they are paying for and will help the hospital administration to evaluate pricing methods.

Factors In Favor

• First mover advantage

• Increasing Medical tourism

• Drift towards packaged pricing

• Possible tie-up with more multi-

speciality hospitals

When not to use package pricing:• This can be used for ailments not having much complications or we can not assess possible complications(e.g.: AIDS, Cancer, Brain

surgery)•Patients above a certain age group •Patients having several complications at the time of admission•Accident victims•Patients who have undergone certain major surgery/ailments like cancer, Neuro-surgery,

When to use package pricing:• Preventive health check-up.• On ailments where the hospitals had good success record and didn’t face much complication at the time of treatment.• Bundling maternity with pre and post care along with child vaccination which is calculated after 5 months of pregnancy to assess the number of children and growth of the child to assess possible complication.

Benefits:•Package pricing is being followed in many foreign nations for patients not covered under insurance .If introduced , we can target many of them because they do not have insurance coverage.•Better customer retention / engagement•Can tap more customers by giving them the flexibility of various services and clears any ambiguity with them•Better utilization of hospital resources.•Number of multi-specialty hospitals is increasing and big players have started acquiring / establishing their branches in many cities. This enables higher customer retention

Product/Service Description

Domestic patients:• Enables better transparency for the customers and eliminates possible ambiguity.• Opens up service in multi-speciality hospitals for higher volume of customers based on their affordability• More suitable for customers not having insurance coverage.• Customers will not miss out regular consulting /check-up.

International patients:• Package pricing is followed in many developed nations. Customers from these nations would prefer this because of higher flexibility.• The patients can have pre/post operative treatment in their city with the branch of hospital they had treatment or their tie-up in their city. • Majority of medical tourism is from economical weak nations like Nigeria, Bangladesh and other nations. According to IITTM, there major concern is lack of transparency in treatment expenses. Package pricing addresses this issue. • Post operative care/ follow-up after the patient returns to their nation was another concern in the survey conducted by IITTM. Our system addresses this issue by sending periodic messages regarding precautions to be taken and follow-up tests in their nation.

Customers For Hospitals (Indirect customers)

Hospitals (Direct customers)

• Efficient cost structure under package pricing to create synergy for hospital and their patients.• Higher customer retention by having customer engagement.• Can focus only on core activities and build upon it outsourcing non-core activities to us.• High potential to attract more patients because of clarity on the whole treatment expenses.• Eliminate various issues faced by foreign travellers.

Customer Benefits

Future Considerations •Our website can have tie-up with airlines and offer special discounts to the passengers. This enables higher travellers in the selected airlines and more people using our service.• We can follow Thailand strategy in medical tourism – clubbing treatment along with local tour. This can be tapped based on the patients health condition, his/her travel plan . • In the survey conducted by Indian Institute Of Tourism and Travel Management, it was found that medical tourists had issue with non-hospital expenses during their stay in India. So we can encourage hospitals to have tie-up with home-stay near hospitals and include that in package pricing to bring better visibility to customers.

Refinement •Refine the plan thoroughly to see if there is any loopholes

Initial Deployment •Develop the model engaging only 3-4 developers, test engineers and propose the business plan to a mid range multi-speciality hospital incorporating:

• HRM• customer retention module• Assist hospital in allocation of resources based on our analytic tool. (Can be offered complementary)

Capability Expansion • Higher more employees across divisions and make the service to scale to target higher scale of service

Expansion • Start approaching other multi-speciality hospitals explaining past success and capability in incorporating high volume service• Incorporate all the intended features and demonstrate all the features and the cost advantage to them.

Business Strategy

Marketing

Direct Sales Influence The Influencers

Hospitals Segmentation

Urban Government

Semi-Urban Multi-Specialty

Rural Stand Alone

• Presentations• POC’s• Trial Runs

• Surveys for the patients• Feedback loops• Show the results to the

hospital administrations• Educate the patients• Health camps

• Presentation to big playerslike Apollo• Conferences with hospitalAdministrators

• Social Media – Facebook , Twitter

• Stories on YouTube

Cost Analysis– Initial

AWSCost/Hr $ to Rs. No of Hr Day

sTotal

$0.56 60 24 365 Rs. 290304

Cost/Mon $ to Rs. No of Mon Data Total

$0.08 / GB 60 12 500 GB 28800Storage

SG & A

Technical Resources Human Resources

No. Avg. Salary Total

5 Rs.3.6L Rs.18L

No. Avg. Salary Total

1 Rs.8L Rs.8L

SG & A

Rs.5L

Total

Approx. Rs.35L

Revenue Model – Example Apollo

• Pricing model is a mix of fixed & variable pricing• Depends on the number of patients served by the

customer

Fixed Pricing - Drivers• Number Of Patients• Customization• Service

Variable Pricing - Drivers• Number Of Patients• Frequency of usage• Type of service

Return On Investment – Example Apollo• 200 foreign customers per day for Chennai Branch – Target is to get 50% at least to use the system.• Already existing database of 25 million customers – Even

if 5% of them use the service then – 12,50,000 messages.• 3,00,000 people undergo surgery at Apollo per year. They

need post-operative care.• Adding these 3 segments we have a customer base of

approx. 1.6 million patients.

Fixed Pricing Variable pricing

Rs.20,00,000 Rs.2 per message

Breakeven @ (35,00,000-20,00,000) / 2 = 7,50,000 messages

Profit = 2 * (16,00,000 - 7,50,000) = Rs.17,00,000

ROI = 17,00,000/34,00,000 = 50%

• Majority of hospitals in India, hospitals maintain all divisions. A few multi-speciality hospitals have started outsourcing non-core activities like catering/canteen .• First mover advantage• Many giant IT companies like Infosys, TCS, Accenture provide cloud based service but at higher cost and focus on higher margin international contracts• Competition against domestic players like Trimax, Tulip, CMC and other players however ours is a niche service.• Competitor in this business domain may emerge in future.

• Should be aggressive in our service by providing multiple services at a competitive price• Add more features to the system periodically.• Expand further to reach the customer end to have control on the complete channel from customer end to the hospital to increase customer base.

Competitor Analysis