Global

Details

  • Service: Advisory, Management Consulting, Business Performance Services, IT Advisory Services
  • Industry: Healthcare, Government & Public Sector
  • Type: Business and industry issue, Case study
  • Date: 1/22/2014

Glocal Healthcare 

Glocal Healthcare was founded in June 2010, with its first hospital in Sonamukhi in the Bankura district of West Bengal. The objective of the organization is to provide high-quality and low-cost healthcare to the needy. The hospital was founded by an IAS officer-turned-entrepreneur, Sabahat S Azim.

Setting up standardized diagnosis and management protocol for the 42 diseases that 95 percent of the population suffered from, helped Glocal streamline its focus area, adding clarity in requirement analysis and design of hospitals.

It currently runs five hospitals in rural and semi-rural areas in the state of West Bengal. Each hospital covers a population of 0.5 million within a 14-kilometer radius. Glocal addresses the primary and secondary care needs of patients. Each hospital is a focused 75 –100-bed facility.


Glocal’s basic business operating strategy has been to cut frills and keep costs at a minimum. The objective is to earn 2.5 million Indian rupees (INR) per month. This model has ensured that all five Global hospitals have broken even in five months.


With Rashtriya Swasthya Bima Yojana (RSBY) support to the population (see RSBY case study), which gives a family up to INR 30,000 a year for healthcare, Glocal has created a sustainable business model that aims to bridge the large gaps in India’s health delivery system.


Under RSBY, 30 million cards have been issued to cover ~150 million people. In Glocal’s hospitals, care is being provided at a cost which is 40–50 percent lower than industry standards.


Some of the key business differentiators adopted by Glocal which have made it possible for Glocal to achieve sustainability and profitability are:


Real Estate and Infrastructure


Glocal adopted a ‘zero-based framework’ – questioning all assumptions and developing its own modular and scalable design at a minimal cost. A set of rules for construction was drafted so the company could build 28,000 square feet, 100-bed hospitals in six to eight months. Glocal hospitals are based in areas where the cost of land is significantly lower than metros, further aiding cost containment. While a typical 100-bed hospital is about 70,000 square feet, Glocal has been able to restrict it to 30,000 square feet, keeping the cost of construction even lower. At approximately INR50–80 million per 100 beds, a Glocal hospital is built at a significant reduction of the cost of a private secondary hospital.


Medical technology outlay at Glocal is similarly controlled. For example, Glocal hospitals do not have intensive cardiac units, which cost patients an average of INR10,000 per day, but use high dependency units, which have similar medical and clinical services, but cost around INR1,500 a day to the patient.


Service mix


Intensive research before conception revealed that 42 diseases accounted for 95 percent of the disease load in rural areas. About 85 percent of the population suffered from only 17 diseases. Glocal devised its offerings to address this need from the time of conceptualization, thus being able to save on equipment costs, labor costs and also succeeding in meeting the demand of patients. Setting up standardized diagnosis and management protocol for the 42 diseases that 95 percent of the population suffered from, helped in streamlining its focus area, adding clarity in requirement analysis and design of hospitals.


Key service offerings include emergency services, pharmacy, OPD, operating theatres, critical care units, labor suites and extensive neo natal care.


Patient profile


The Group aims at capturing the population segment unable to afford good quality, affordable healthcare. Within this target market, Glocal focuses on an estimated 95 percent of medical cases that fall into primary and secondary categories, but require far less investment as compared with the five percent tertiary care demand. Over 25-30 percent of the customers come from very low-income rural families.

Glocal has also adopted a number of innovative techniques to cut down equipment costs. For example, it attaches a low-cost Chinese-made camera to an analogue X-ray machine to digitalize the images at a much lower cost than a digital X-ray machine.


Use of technology


To contain diagnosis and disease management costs, Glocal has adopted a standardized Medical Diagnosis & Management System (MDMS) that is connected to the Hospital Management Information System (HMIS). This is an artificial intelligence system that helps in diagnosis, choosing medication and in preventing drug interaction, contra-indication and adverse drug reactions. While doctors can exercise their judgment, this makes the entire process of diagnosis and management fully transparent and documented. It ensures an accurate diagnosis is quickly determined without unnecessary medicines, pathological tests and procedures – further streamlining healthcare delivery.


Other technology offerings include telemedicine and video conferencing facilities, well-equipped lab, radiology centre and imaging system. The fully computerized facility ensures it is 100 percent paperless. There is a focus on telemedicine including teleconsultation, teleradiology, telepathology, telesonology and teleendoscopy. This also aids intra-location continuity of care, when required.


Medical equipment


Instead of purchasing off-the-shelf, Glocal has invested in exploiting the supply chain to identify original manufacturers and get equipment assembled at an exponentially lower cost. Glocal has also adopted a number of innovative techniques to cut down equipment costs. For example, it attaches a low-cost Chinese-made camera to an analogue X-ray machine to digitalize the images at a much lower cost than a digital X-ray machine. The radiology is outsourced to a central point at Lucknow where all five hospitals send their radiology requirement and the data is processed on a daily basis.


Staffing Model


Glocal has about six full time super-specialists and 10-12 specialists on an empanelled basis in each hospital. The MDMS system aids in evidence-based treatment and diagnosis and proves an important learning tool for doctors and other staff. The system also helps in the delegation of more work to MBBS doctors under the guidance of specialists.


Glocal has periodically received PE interest owing to the strength of its business model and stellar financial record.


Glocal plans to expand in the coming few years. This includes a project for 50 new units across six states. The new units would be located in West Bengal, Uttar Pradesh, Bihar, Chhattisgarh, Jharkhand and Odisha. The founders plan to invest in Glocal’s equity. The equity to be raised from a mix of investors, including the current PE funds Sequoia and Elevar; while there will be attempts to broadbase the investor pool. In September 2013, Glocal raised INR250 million (US $4 million) as investment from SIDBI Venture Capital through its fund Samriddhi.

 

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Necessity: the mother of innovation

Necessity: the mother of innovation
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