Mr Sunil Sachdeval

Funding Opportunities in Health Care Emerging Trends and Road Ahead

Mr. Sunil Sachdeva Co-founder, Medanta, The Medicity

July 21, 2014, Hotel Taj Gateway, Kolkata

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India has $65B Healthcare Market which is expected to grow at 15% p.a; Within Healthcare, Delivery is the biggest segment

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Medanta as conceptualized …

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… and Medanta today

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Availability, Affordability, Quality and Physical access are crucial for efficient healthcare delivery

Affordability

Physical Access

Dimensions of Healthcare access

Quality

Availability /Capacity Source: IMS health, June 2013 NDL

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Availability and access to quality doctors remains one of the biggest concerns for India HEALTHCARE FACILITIES CONCENTRATED IN URBAN AREAS

“If shortage of doctors is one problem, their unwillingness to work in the rural hinterland is another, creating artificial scarcity in the area and high concentration in another” Union Health Ministry

AVAILABLE DOCTORS & NURSES ARE ~50% OF REQUIRED

“It is alarming to note that doctor patient ratio in rural India is 1:20,000 as against the urban ratio of 1:2000 which itself is far below the WHO requirement of 1:250 in rural India ” ONICRA, 2013 NDL

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Disparities exist even at a regional level

Source: PwC report, 2013 NDL

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Poor quality and inadequate number of PHC’s make Primary Health Care a challenge

• ~26K government-run primary health care centers and 615 district-level hospitals - Poor quality of delivery at these institution,; highly underutilized

• ~200K privately-owned general physician clinics - No standardization in terms of processes, quality and service levels

• Patients end up going to large tertiary care hospitals even for basic health care needs

Shortfall of ~17K PHC’s and ~2.6 M health workers nationwide; 41% of PHCs lack healthcare personnel

- more expensive and not easily accessible

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• Physical Access to quality healthcare • Lack of Primary Health centers • Unavailability of doctors in Rural Areas • Regional disparities

• Infrastructure takes time and money • Artificial constraints – good doctors don’t want to go to rural areas

CHALLENGE

INNOVATION CONSTRAINTS

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1

M HEALTH

Source: PwC report, 2013 NDL

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1 INDIA RECEPTIVE TO ADOPTING MHEALTH

M HEALTH CURRENTLY, MOST # OF LIVE PROJECTS IN INDIA

•Mobile penetration on the rise •Developing economies more receptive to change •Offers solutions to the core problems – Availability and Physical Access

Source: PwC report, 2013 NDL

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2

HEALTH CARE UNITS IN TIER 2 AND TIER 3 CITIES HUGE DEMAND MAKES IT A LUCRATIVE OPPORTUNITY

BIG AS WELL NEW HOSPITAL VENTURING INTO SMALL CITIES

•Cost of setting up of infrastructure is low

•Big hospitals like Medanta, Fortis, Apollo and Manipal

•Demand is high as income level of people residing in Tier 2 and Tier 3 cities on a rise

•Independent hospital chains like Vaatsalaya , Glocal

•Government offering incentives

- 50- 100 bed hospitals in tier 2 and tier 3 cities - >$15M raised from VC and PE funds

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3

PUBLIC PRIVATE PARTNERSHIP FOR SETTING SUPER SPECIALITY HOSPITALS • Alone cannot best solve the problem of Health Care

• Potential benefits include better quality , more resources – funds, technology, increased access etc • Models • Operations and management contracts • BOT through SPV for private financing • DBFO - Design, build, finance and operate – variation of BOT

• Lease: Private sector provides own health care and risks. • Concessions: Government regulates price and quality. Private sector invests, pays for concession rights.

• Government contributes to reduce commercial risk. • Joint ownership. Sharing revenues, expenses and assets. Technological expertise through private sector. NDL

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THE WAY FORWARD Mobile Van

Super Speciality Hospitals

Emerging Trends

Primary Health Care Units

Hospitals in Tier 2 and Tier 3 cities NDL

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SO WHERE DOES THE FUNDING OPPORTUNITY LIE?

CHALLENGE

OPPORTUNITY

INNOVATION

FUNDING OPPORTUNITY

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