Home healthcare industry in India

Abstract

The current health care system revolves around hospital facility in which patient visits the hospital. The existing model of visiting hospitals involves inconveniences such as time and energy costs. Further, constraints in hospital infrastructure (limited beds, insufficient specialists etc) deny the patient proper care and causes inconvenience to family members. There is a latent need for health care services delivered at home which address these inconveniences and reduce frequent visit to hospitals. The availability of low bandwidth telemedicine with growing middle class, an improving telecommunications infrastructure, a world-class software industry and a medical community open to new ideas can be synergized to satisfy the latent demand of providing healthcare services at home and at the same time be profitable. Players in the home healthcare segment have to face trade-off between quality of patient’s care (e.g. serve a narrow range of ailments confined to nursing services) and patient satisfaction (e.g. prohibitive prices of homecare services) vs profitability of their business. The cost of service in home healthcare service business is higher considering the transport cost, doctor’s fees, investment on equipments etc. The transport cost incurred by a patient in travelling to hospital and the time spent in waiting at the hospital is not visible to him so the patient will object to premium charged on these fronts. The consumers will compare the amount charged for the service with that of the consultation fees he is usually charged in a hospital. The challenge therefore lies in convincing the patient that the amount he is paying for the services is tantamount to what he would have paid in a hospital besides the additional benefit of enjoying all the facilities at home. This further reduces the market as the entire middle, lower middle and Below Poverty Line consumers won’t adopt such a service. In the current scenario firms can gain a sustainable competitive advantage over competitors through deft application of technology and employing an operationally efficient model whereby it can serve 50% more customers with similar resources and also exploit synergies of multiple services. The emerging opportunities in this segment comprises of four elements: (1) multiple revenue streams, (2) discounts on bulk purchase of drugs and from contract with pathological labs, (3) different premium charged depending on customer’s choice of service, (4) Efficient scheduling algorithm. Once it is recognized by customers and its popularity gets enhanced, it can be further enhanced by increased economies of scale and capacity utilization.