Market Based Solutions to Social Change in India
Transcription
Market Based Solutions to Social Change in India
Confidential 2008 AMSTERDAM Market Based Solutions to Social Change in India BEIJING CAMBRIDGE CHICAGO DUBAI Low-Cost Service Delivery in Health & Education FRANKFURT HONG KONG JOHANNESBURG LONDON LOS ANGELES MADRID MANILA MOSCOW MUMBAI MUNICH NEW YORK PALO ALTO PARIS SAN FRANCISCO SÃO PAULO SEOUL SHANGHAI SINGAPORE Delhi, June 16, 2008 STOCKHOLM TOKYO TORONTO ZURICH Copyright © 2008 by Monitor Company Group, L.P. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of Monitor Company Group, L.P. This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion. Confidential Case Study LifeSpring: Context India has a high maternal mortality rate, some of it may be attributed to fewer births attended by skilled health staff Average number of deliveries in India are ~26 Million per year and only 43% are deliveries by skilled health staff India has the highest number of maternal deaths in the world; ~ 117,000 maternal mortalities per year Births attended by skilled health staff (%) of total, (2000–03)1 Indian Maternal Mortality Rate (MMR) relative to other countries2 (2000) 125% 540 97 100% 99 75% 50% 43 25% 56 17 0% India China Russia India China U.S. Note: MMR (Maternal Mortality Rate) is the number of deaths from pregnancy-related causes per 100,000 live births in the 15-49 age group 1 Data for the latest year available in 2000-03, 2 Modeled estimates from WDI (Urban-619 and Rural-267) Source: India-stat, WDI Indicators, NFHS -2 & 3, India Census, CIA World Fact Book, Gupta RK - Institutional and non-institutional deliveries in slum areas of Delhi, Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 2 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Overview LifeSpring Hospital provides low-cost, women and child care services in peri-urban India Company Overview Service Description: Maternal Care LifeSpring LifeSpring Hospitals Hospitals provides provides low-cost, low-cost, quality quality healthcare healthcare solutions solutions –– Private Private company, company, joint joint venture venture between between Hindustan Hindustan Latex Latex and Acumen Fund and Acumen Fund –– 11 hospital hospital started started in in 2005, 2005, 22 more more operational operational in in past past 22 months, months, plan plan to to have have 66 hospitals hospitals in in AP AP by by end-2008 end-2008 Operating Operating model model focused focused on on “Service “Service Quality Quality at at aa low low & & transparent transparent price” price” –– Services Services are are priced priced substantially substantially lower lower than than prevailing prevailing market prices market prices Plans Plans include include chain chain of of 30 30 small small hospitals hospitals (20 (20 beds) beds) by by 2010 2010 in AP, Maharashtra and Karnataka in AP, Maharashtra and Karnataka Financially Financially self self sustaining sustaining model model –– Broke-even in 20 months Broke-even in 20 months of of operations operations –– Initial project costs funded by Initial project costs funded by Hindustan Hindustan Latex Latex Provides Provides maternal maternal and and child child health health care care services services –– Gynecology, Gynecology, Obstetrics, Obstetrics, Pediatric Pediatric In-patient In-patient service service is is limited limited to to uncomplicated uncomplicated women’s health women’s health LifeSpring LifeSpring hospitals’ hospitals’ primary primary customers customers are are women women and children and children –– Caters Caters to to the the B60 B60 population population living living in in peri-urban peri-urban areas areas within within aa 10km 10km radius radius Has Has served served 2,314 2,314 in-patients in-patients and and 27,316 27,316 out-patients out-patients (inception-May (inception-May 2008) 2008) 8 Hospital Revenue (Rs. Lacs) 6 117% 5.12 4 2.36 Rs. Lacs 2 0 Sep-2006 Source: LifeSpring Newsletter, Secondary Research, Interviews, Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 3 Sep-2007 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Pricing Normal & caesarean delivery charges at LifeSpring are ~1/6th the cost of private clinic rates LifeSpring Price Comparison with Possible Alternatives (Rs.) 16,000 30,000 Normal Delivery Caesarean Section 12,000 20,000 8–10K Rs. 20–30K Rs. 8,000 10,000 4,000 1.5K 6K 1.5–2.5K 300–1K 0 0 LifeSpring1 Govt. Hospitals LifeSpring1 Pvt. Clinic Govt. Hospitals Pvt. Clinic Differential Prices for Key Services at LifeSpring 16,000 Normal Delivery 12,000 12.4K Caesarean Section 8.7K Rs. 8,000 6K 4.8K 3.3K 4,000 1.5K 0 General Ward Semi-Pvt. Room Pvt. Room LifeSpring Prices for key services in a General Ward Note: Pvt. Clinic refers to small 20–30 bed nursing homes, often run by a family in Hyderabad and have private rooms in most cases Source: Satapathy et al. — Indian Journal of Community Medicine(2004–05), LifeSpring Data, Interviews, Secondary Research, Monitor Analysis 1 BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 4 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Customer Profile LifeSpring customers are B60 women who have a household income of Rs. 3k-7k/month Customer Customer Details Details Urban India Income Pyramid (2004–05) MHE1: >Rs 9,625 pm 16% Customers Customers are are from from local local slums, slums, low-income low-income housing housing colonies; colonies; most have daily wage job or run petty businesses most have daily wage job or run petty businesses –– Typical Typical household household has has 5-6 5-6 members members Majority Majority come come from from 55 km km catchment catchment area area (also (also focus focus of of outreach outreach staff); word-of-mouth has lead to customers coming from staff); word-of-mouth has lead to customers coming from 15-20 15-20 km km distance as well distance as well “Proximity “Proximity to to hospital hospital is is one one of of the the key key criteria criteria while while evaluating evaluating alternatives. alternatives. However, However, recommendation recommendation from from relatives/friends relatives/friends over-rides over-rides the the distance” distance” –– LS LS staff staff Choice Choice for for delivery delivery tends tends to to be be either either at at home home or or institutional institutional (government/private) (government/private) –– IfIf institutional, institutional, they they are are often often referred referred to to private private clinics clinics by by quacks who have existing relationships with them quacks who have existing relationships with them Consumer Consumer research research suggests suggests LifeSpring LifeSpring customers customers are are very very satisfied satisfied with with the the service service and and price price MHE1: Rs 4,575– Rs 9,625 pm MHE1: Rs 2,500– Rs 4,575 pm MHE1: <Rs 2,500 pm 37% 33% LifeSpring B60 Customers 14% Profile of LifeSpring Customers by Occupation Value to Customer Pvt. Sector Employment 24% 32% Petty Business 4% 10% Govt. Employee Daily Wages Driver Household Expenditure Source: NCAER, LifeSpring Newsletter (Sept, 07), Interviews, Monitor Analysis 1 Monthly BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 30% 5 Lower priced than majority of private clinic alternatives Quality healthcare at an affordable price (marginally higher than low quality alternatives – government hospitals/quack) Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Activity System LifeSpring’s activities can be mapped around 4 main areas Low OPD Price Location in high pop density area Standardized kits for surgery / procedures High Throughput Offer vouchers and baby packs to increase repeat patients Use lower cost ANM nurses Service Specialization Community sales force Min. equipment limits capital expenditure Rent old or “sick” hospitals on long lease to limit capital expenditure Targeted messaging to mothers / husbands Awareness Camps "Voucher" program Cross-selling (Gynaec/Obstetrics /Pediatrics) Limited medicines; JIT medicines removes cost of storage Mostly general ward Complications referred away, early on No ambulances High Asset Utilization Fixed salaries for doctors ‘No Frills’ Frills’ SetSet-up and Service Outsource pharmacy, lab services reduces costs and pilferage Source: Interviews, Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 6 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Service Specialization LifeSpring has chosen a service which is high incidence and by specializing it can concentrate on lowering costs and increasing productivity 120 No. of Deliveries / month Narrow Narrow specialization specialization on on women’s women’s care care for for in-patient in-patient –– Services include delivery, c-section, hysterectomy, Services include delivery, c-section, hysterectomy, fibroids, fibroids, MTP MTP (abortion) (abortion) –– Complications Complications are are referred referred to to other other hospitals hospitals early early on on Specialization Specialization enables enables LifeSpring LifeSpring to to do do the the following following 100–110 90 No. 60 30 15–20 Use Use more more ANM ANM nurses nurses than than GNM GNM nurses nurses –– ANM ANM nurses nurses are are less less qualified qualified and and are are therefore therefore not as expensive as GNMs not as expensive as GNMs –– Demand Demand for for ANMs ANMs is is not not as as high, high, thus thus keeping keeping LS’s attrition low LS’s attrition low Standardization Standardization –– Clinical Clinical protocols protocols and and other other procedures procedures have have been been standardized standardized to to enable enable clarity clarity of of tasks tasks and and higher higher productivity productivity –– Surgery Surgery kits kits also also standardized standardized Lower Lower Other Other Costs Costs –– Bulk Bulk purchase purchase of of limited limited equipment equipment and and medicine medicine lowers lowers medical medical supplies supplies cost cost 0 LifeSpring Pvt. Clinic Note: Pvt. Clinic refers to small 20–30 bed nursing homes, often run by a family in Hyderabad Source: LifeSpring Data, Secondary Research, Interviews , Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 7 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: High Throughput (1/2) Targeted marketing via multiple channels especially dedicated outreach staff has contributed to high throughput in the hospital Customer Previous Previous Child Child // OPD OPD at at Private Private Hospital Hospital Message Previous Previous Child Child // OPD OPD at at Government Government Hospital Hospital Convey “low-cost and highquality” advantage of LS Relatively easier to convert as already aware of benefits of institutional deliveries Previous Previous Child Child at at Home Home (non-institutional) (non (non-institutional) Reinforce “Quality” aspect of LS offering with focus on – Transparent pricing – Trained doctors – Hygienic environment Strong focus on customer education and relationship building – Explain warning signs, high-risks, etc. “Trust is an important criterion….as most of them have built trust in one hospital/mid-wife where the entire extended family has been going for years. So, switching to LS isn’t very obvious to them” Channels Dedicated Dedicated Outreach Outreach Staff Staff 3–4 local woman (XII pass) hired as marketing force, do 6 hours/day of field work – Gathers information on family, medical history and target the customer (mother-in-law and husband) Community Community Initiatives Initiatives Health camps (1/month) – Doctor visits the community and advises them on nutrition, health-related issues On-going initiatives – Reinforce brand with free vaccination camp, free photograph of your child, etc. ““Voucher” Voucher” Voucher” Program Program Voucher distribution (1 free OPD & discount on IPD) to every LS IPD customer – Aims to reach out to potential customers and encourage experience sharing within community “Follow up with families suggested that most woman go to their mother’s house for final delivery. So, we have started targeting mothers who are expecting their pregnant daughters to visit them for final delivery” Source: LifeSpring Data, Secondary Research, Interviews, Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 8 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: High Throughput (2/2) Low OPD fee and proximity to urban slums has enhanced footfall in the hospital Number of Customers per Month 2,000 300 Out-Patient Charges per Customer (Rs.) IPD 140–160 OPD 100–300 Rs. Units 150 1,000 1,500–1,600 50 20–30 300–500 0 0 LifeSpring OPD to IPD conversion 9%–11% Pvt. Clinic LifeSpring Pvt. Clinic 4%–10% Low Low and and transparent transparent pricing pricing –– OPD OPD is is priced priced at at Rs. Rs. 50 50 vs. vs. Rs.100–300 Rs.100–300 at at the the private private clinic clinic to to increase increase footfall footfall –– IPD IPD pricing pricing is is all all inclusive inclusive and and transparent transparent (conveyed (conveyed on on registration) registration) Location Location –– Located Located in in high high population population density density area, area, where where target target customers customers reside reside e.g., e.g., industry industry workers workers –– Reduces Reduces transportation transportation costs costs to to customer customer and and increases increases chances chances of of repeat repeat visits visits Cross-selling amongst the patients requiring healthcare services in gynecology, Cross-selling amongst the patients requiring healthcare services in gynecology, obstetrics obstetrics and and pediatrics pediatrics Note: Pvt. Clinic refers to small 20–30 bed nursing homes, often run by a family in Hyderabad Source: LifeSpring Data, Secondary Research, Interviews, Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 9 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: High Asset Utilization LifeSpring ensures high utilization of its most expensive asset, its doctors Surgeries1 per doctor/week No. of Operations2 in OT/week Cost of Doctor/patient3 50–75 22–27 4–6 No. No. Rs. 12–20 1–2 LifeSpring Pvt. Clinic 4–6 LifeSpring LifeSpring Pvt. Clinic 80% The The drivers drivers of of high high asset asset utilization utilization are are specialization specialization which which enables enables high productivity of its skilled and unskilled labour, and high volume high productivity of its skilled and unskilled labour, and high volume of of patients patients Use Use of of doctors doctors –– Doctors Doctors are are on on salaries salaries rather rather than than consultants. consultants. This This gives gives LS LS the the benefits of increased volume and productivity benefits of increased volume and productivity –– Doctors Doctors are are local; local; lower lower rate rate of of absenteeism absenteeism improves improves overall overall productivity productivity Excluding Deliveries and Caesareans, 2 Includes Caesarean and not Normal Delivery as it is done in a labour room, Patients at LS-1500–1600 and Private Clinic 300–500 per month and Salary of a doctor at Rs. 20–30k/month Note: Pvt. Clinic refers to small 20–30 bed nursing homes, often run by a family in Hyderabad Source: LifeSpring Data, Secondary Research, Interviews, Monitor Analysis 1 Pvt. Clinic In-Patient (IPD) Facility Utilization 60%–70% 60% 30%–40% 40% 20% 0% LifeSpring Pvt. Clinic 3 BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 10 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: ‘No Frill’ Set-up and Service Low capital expenditure and ‘no frill’ service enables LifeSpring to limit its non-core spending Limit Limit Capital Capital Expenditure Expenditure –– Rent Rent old old or or “sick” “sick” hospitals hospitals on on long long lease lease rather rather than than own buildings own buildings –– Have Have minimum minimum expensive expensive equipment equipment (most (most complex complex machine in the hospital is ultra-sound) machine in the hospital is ultra-sound) Refer Refer complications complications to to avoid avoid investment investment in in expensive expensive equipment and specialist doctors equipment and specialist doctors –– Do Do not not own own ambulances ambulances –– Out Out source source pharmacy pharmacy and and lab lab services; services; on on premises premises This This also also removes removes problems problems of of pilferage pilferage and and inventory costs inventory costs ‘No ‘No frills’ frills’ Environment Environment –– Tiered Tiered room room system system Most Most beds beds are are in in the the general general ward ward (Normal (Normal delivery delivery rates are Rs.1,500 general ward, Rs. 3,200 shared rates are Rs.1,500 general ward, Rs. 3,200 shared room, room, Rs. Rs. 4,700 4,700 private private room) room) –– Rooms Rooms are are basic basic with with no no air air conditioning conditioning –– Simple Simple flooring flooring and and minimal minimal furniture furniture –– No canteen with food services, No canteen with food services, no no kitchen kitchen Source: Secondary Research, Interviews, Monitor Analysis BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 11 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Doctor Profile Doctors at LifeSpring earn fixed salaries vs. variable consulting fees of their private clinic counterparts and have strong non-monetary incentives to stay Total Income (fixed and variable) per month 60K 30k–40k 40K Rs. 14k–35k 20K 12–18k 0 LifeSpring1 Pvt. Clinic2 Doctors Doctors are are salaried salaried employees, employees, not not consultants consultants (Attrition (Attrition rate rate for for doctor doctor is is 4%) 4%) There There are are aa number number of of non-monetary non-monetary reasons reasons or or incentives incentives that that keep keep the the doctors doctors at at LifeSpring: LifeSpring: –– Experience Experience High High throughput throughput provides provides significantly significantly more more clinical clinical experience experience for for aa doctor doctor in in number number and and variety variety of of cases cases especially especially for for young doctors young doctors Young Young doctors doctors handle handle greater greater responsibilities responsibilities at at LS LS than than ifif they they were were working working under under an an older older doctor doctor in in aa private private practice practice –– Lack of Alternatives Lack of Alternatives Doctors Doctors are are local, local, the the lack lack of of clinic clinic choice choice in in their their area area restricts restricts the the ability ability to to switch switch hospitals hospitals Government service is not appealing as the government system is outdated Government service is not appealing as the government system is outdated –– ItIt is is very very restrictive restrictive in in terms terms of of prescribed prescribed medical medical techniques, techniques, treatments treatments and and medications medications –– No No pressure pressure to to drive drive in in business business helps helps maintain maintain focus focus on on clinical clinical work; work; also also provides provides hassle-free hassle-free environment environment where where all all administrative tasks are taken care vs. running a private clinic administrative tasks are taken care vs. running a private clinic The range is due to the differences in experience between the senior and junior doctors at LifeSpring 12–18,000 is the basic fixed salary and rest is variable pay dependent on patient volumes and number of hospitals the doctor consults at Source: Secondary Research, Interviews, Monitor Analysis 1 2 BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 12 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM Confidential Case Study LifeSpring: Nurse Profile LifeSpring uses more nurses than private clinics but is able to use them more productively. It uses ANM instead of GNM nurses, keeping cost and attrition low Number of IPD customers/month/nurse1 150 130 150 100 100 No. Cost of nurse/patient 110–130 Rs. 50 50 40–50 0 0 LifeSpring 50 Pvt. Clinic LifeSpring Pvt. Clinic LifeSpring’s LifeSpring’s specialization specialization in in maternal maternal care care has has enabled enabled them them to: to: –– Achieve higher (2.5x) nurse utilization compared to a private Achieve higher (2.5x) nurse utilization compared to a private clinic. clinic. However, However, doctor-nurse doctor-nurse ratio ratio is is in in same same range range as as aa private private clinic clinic (4–6 (4–6 nurse nurse per per doctor) doctor) –– Employ Employ more more ANM ANM nurses nurses than than GNM GNM nurses nurses (9 (9 ANM ANM && 33 GNM GNM vs. vs. 6–10 6–10 GNM GNM nurses nurses in in aa private private clinic) clinic) Qualifications for Auxillary Nurse Midwifery (ANM): Qualifications for Auxillary Nurse Midwifery (ANM): –– An An ANM ANM diploma diploma programme programme is is of of an an 18 18 month month duration duration and and requires requires aa 10th 10th class class education education –– In contrast, a Graduate Nurse Midewifery (GNM) is of 3.5 years and requires a 12th In contrast, a Graduate Nurse Midewifery (GNM) is of 3.5 years and requires a 12th class class education education Cost advantage: ANM nurses are more limited in skill and are thus less expensive than GNMs Cost advantage: ANM nurses are more limited in skill and are thus less expensive than GNMs Low Low Attrition: Attrition: Demand Demand for for ANMs ANMs is is not not as as high high as as that that of of GNMs, GNMs, thus thus keeping keeping LifeSpring’s LifeSpring’s attrition attrition low low ANM’s are easily available and similar skill as GNM in context of maternal care ANM’s are easily available and similar skill as GNM in context of maternal care IPD customers at LS: 150/month, Nurses at LS: 12, IPD customers at Private clinic:30–40, Nurses at Private clinic: 6–10 Note: Majority of nurses in private clinic are GNM Source: LifeSpring, Secondary Research, Interviews, Monitor Analysis 1 BZR-SAB-Phase 1b-Low-Cost_Service_Delivery_Health_Education-Final Presentation 13 Copyright © 2008 Monitor Company Group, L.P. — Confidential — MUM