The massive yet unexplored rural healthcare market is drawing the attention of many today. A completely different lens is needed to define a new market such as this. One such initiative is that of KGVK's Project Franchise Lab.
Why “Bottom of the Pyramid” healthcare?
Today, almost three decades after the corporatisation of healthcare in India, it still seems that we are living in two countries within the same geography. One, the 'shinning India', registering a GDP growth of over 8% consistently since the last three years, and the other is the 'Grameen Bharat', where there are people still dying of untreated malaria or diarrhoea, there are still so many children who do not survive into the second year because of poor post natal care. The government infrastructure being inconsistent and in many cases non-existent especially in the backward states of the country, leave the rural poor with no choice but to hedge their luck in the hands of untrained quacks who enjoy monopoly in an unregulated and fragmented rural healthcare market.
The corporate healthcare entities have remained suspicious of the idea that the supposedly poor rural community would be willing to pay for healthcare, who otherwise have remained in the domain of mandated free service provided by the government healthcare facilities. Krishi Gram Vikas Kendra (KGVK), an Usha Martin initiative believes that if there is a value for money proposition made, and if a product or service is created suiting the unique lifestyle and budget of the rural segments, there is then a very viable business space for rural healthcare. The same can be observed in China as well. There are so many companies that have been unsuccessful in the Chinese soil in the recent past, but one cannot continue to ignore its sheer size today? The rural population of India stands at a staggering 795 million people today that is twice the size of United States. The rural consumption growth is also expected to be around a healthy 5.1% for the next two decades with the estimated size of India's rural market being pegged at US$ 577 billion by 2025 (Mckinsey Global Institute). In this scenario, one would find it very difficult to ignore the massive size and potential of rural India. A completely different lens is needed to define a new market such as this. To tap the rural healthcare market is only as impossible as doing the same in the urban space. With Project Franchise lab, we are talking about that seemingly impossible idea of tapping the rural healthcare market.
An asse ssment of ground realities
As one would have observed the case for poverty penalty being paid by the rural poor in case of micro credit, where they end up being in perpetual poverty in the hands of local moneylenders, charging frightful rates of interest. All this happened until the concept of self-help groups emerged and they were linked quite successfully in many cases with corporate banking entities like ICICI Bank or State Bank of India. Same is the case with the rural healthcare situation.
The Telemedicine network: Telemedicine initiative aims to leverage maximum potential of limited medical resources available in rural areas. The franchisees will have simple kiosks that will connect them to the medical resources available in the secondary care hospitals and statewide network of super specialist panel.
The appalling state of deficient infrastructure makes it an ideal breeding ground for quacks, self prophesied faith healers and untrained birth attendants. The untrained quacks largely exploit the rural patient community as in most cases there are no alternate service provider available in the villages, especially for those which are remotely located. Worst of all, because there is no scientific treatment protocol followed, allowing indiscriminate usage of drugs, inappropriate dosages etc. complicating the disease management, and putting the life of the ailing patients at serious risk. As the quacks try to retain the patients with them till the last moment to further their commercial interest, when life threatening crisis emerges, many a times it gets too late for the patient to be referred to a more competent healthcare service provider. As a direct effect of such mismanagement, the cost of treatment spirals out of hand and most often, the poor patients family is forced to sell their belongings and fixed assets in order to cover for post complication treatment cost. With depleted financial resources, this vulnerable community also fall prey to the vicious cycle of moneylenders, a trap they mostly fail to recover from throughout their lives.
It is commonplace enough in Jharkhand that a patient or a pregnant woman might need to travel across hills and rivers and walk for 10-15 km before reaching any government healthcare delivery point like primary health centre or community health centre. Even if one would reach any such place, chances are that the centre would be ill-equipped and under-staffed and in most cases, without a doctor.
Among other secondary effects, in the absence of any kind of monitoring mechanism and as the quacks mostly thrive beyond the realms of any regulatory agency, misuse of drugs, especially antibiotics, cause drug resistance and side effects arising out of wrong application and dosage administration. As one can see that in case of healthcare too, the poor end up paying a disproportionately huge penalty only for being poor.
Background of the Franchise Lab Project
Latest reports suggest that out of contractual appointment offered by the Jharkhand state government to 1868 doctors, only 350 are in state service today, while the rest have left for better opportunities. At a current deficit of 1500 doctors, with the total annual output of medical graduates in the state being only 190, it would take the state about eight years to fill up vacancies even after assuming a zero attrition rate. The state is also deficient in trained medical resources and infrastructure with only about 1700 sub centres and 284 primary health centres present out of the required number of 7000 and 1000 respectively. This kind of numeric challenge puts a serious constraint in ensuring mandated health services in the state and obviously with the present quantity nowhere close to the requirement, talking about quality of care remains a far cry. No wonder, the state today stands with very poor health indicators like Infant Mortality Rate of 69 or Maternal Mortality Rate of 371 (National Family Health Survey-3).
KGVK, a social enterprise promoted by Usha Martin Group, is now working on incubating sustainable business models in healthcare in Jharkhand, to combat this grim healthcare situation in the state. The International Finance Corporation (A World Bank body) has collaborated with us providing seed capital and technical assistance in creating such business initiatives at the grassroots. We have adopted innovative business processes as one might find in a franchising system. In the pilot stage, the Franchisee lab initiative targets to serve the rural community in Jharkhand, substantial part of which are represented by the below poverty line (BPL) population. The size of the population to be covered in the first phase is estimated at approximately two hundred thousand. Once successful within a limited region, the project aims to scale up across the country in the next three years.
The Franchise Lab project has the following key components:
A. The Shalini Hospitals Network- A chain of franchiser owned secondary care hospitals located in the rural area that offers:
- Referral linkages to primary healthcare backbone integrated training facility to run a community health program (1 year course) to groom and generate prospective franchisees.
- The secondary care hospital network will aim to plug the gap in the infrastructure deficiencies of the government health systems and also stand as model supplementary facilities through public private partnerships as defined under the National Rural Health Mission framework.
B. The F Lab Franchisee
Running a health kiosk known as Shalini Swasth Kendra, the F lab franchisees are full business format franchisees, offering a range of primary care service that includes:
- Ante natal, post natal care and other safe motherhood support
- Basic diagnostics (to be integrated with telemedicine in the next phase)
- Creating secondary referral linkages with Shalini hospitals network
- Dispensing of OTC drug and other basic medicines like DOTS, anti malarial/ anti diarrhoeal etc.
- Educating the community about preventive care and selling related products
- like low cost water filter, medicated
bed nets etc.
- Family planning service including dispensing of temporary contraceptive methods
C. Support systems
- Patient Transportation service: Low cost transportation from franchisee locations to secondary care facility through common pooling of patients integrated to pick and drop service.
- The Telemedicine network: Telemedicine initiative aims to leverage maximum potential of limited medical resources available in rural areas. The franchisees will be having simple kiosks that will connect them to the medical resources available in the secondary care hospitals and statewide network of super specialist panel. In the second phase, KGVK plans to introduce telemedicine facility within the franchisee network. Simple interactive kiosks will connect the remotely located franchised Shalini Swasth Kendras with its Shalini Hospital network, where expert consultation will be available for further patient management at the franchised outlets. The communication system that is being designed at the moment for the telemedicine infrastructure is divided into two stages.
Infrastructure is provided by Indian Space Research Organisation (ISRO), which has three components, namely, the satellite, a hub or the uplink facility and the remote terminals located at the Shalini Hospitals. The remote terminals are capable of having two-way communication to facilitate interaction. The network operates in extended C-band with uplinks for telemedicine requirement. The remote terminals have 1.8 m antenna and 2-Watts RF power amplifier. The hub or the uplink facility have 4.5 m antenna and 20/40 Watts power amplifier operating in extended C-band. The network operates with TDM/TDMA technology and is essentially a Star network. The required bandwidth for the proposed network is on INSAT-3A at 93.50 E longitudes. The hardware at each node includes VSAT, satellite modem, Multimedia PC, web cam, speakers, microphone and ISRO proprietary software. The key features of this stage -1 infrastructure are as follows:
- Non-redundant TDM/TDMA Central Hub
- DVB-S Forward link & TDMA Return link
- Star network with Hub as central node
- Shalini Hospitals as end node
- One Extended C Transponder
- Satellite support through INSAT-3A