Healthcare has become one of the largest sectors in India, in terms of revenue as well as employment. The healthcare sector is rapidly evolving with the introduction of home healthcare services over the last decade. Even though the home healthcare industry in India is still in its early growth stage, it is growing pervasively, mainly due to the advantages that these home-care services can provide to patients in need. In addition, the growing prevalence of chronic diseases, rising geriatric populace, and increasing awareness among people about the benefits of home healthcare are expected to drive the growth of the home healthcare industry further in the coming years.
In conversation with Mr. Abhishek Malik, Regional Head – North and East at Healthcare at Home – a leading home healthcare service company, we attempted to seek his opinion and understand his side of the story to the ‘Home Healthcare Industry in India’.
Here are some excerpts of the interview:
1) As per our research, we have estimated that the home healthcare industry in India is around USD 2 billion. We have also observed that only 8-10% of the overall market is organized. What are your views on the same? What kind of services comes under the home healthcare market?
In India, the home healthcare industry could be around USD 2 billion. Also, only 7-8% of the overall market is organized and the rest is unorganized. For organized players, they provide all kinds of services – lab investigations, medicine deliveries, x-rays, attendant services under the home healthcare umbrella. Some of the companies are earning their maximum revenue from pharmacy delivery and lab investigations while their core service revenue only acts as a filler.
2) What type of entities generally constitutes the part of the unorganized sector?
Unorganised players mostly include nursing homes, medical freelancers and a small team of nurses’ runing any agency across the hospital. The count of all these is really very high hence the revenue from unorganised players are more than the organised players in the industry.
3) What are the points that a home healthcare service provider considers before starting their services in a particular city?
Generally, the services are first offered in a Tier 1 city and then to patients in others cities. The service offerings are different for each type of city/region. Companies also focus on the brand of hospitals located in each city. Companies major focus on cities such as Bengaluru, Mumbai, Delhi because they have top hospitals like Medanta, Apollo, Fortis, Manipal etc. They also set up their upcoming hubs by looking at the success of their competitors.
There are 2 models to start the home healthcare services: partnering with hospitals to provide home healthcare, or working with the doctors directly. Post this comes, partnering with the single speciality hospital or the famous doctors in these regions etc. In addition, other factors such as cash flow in the city, neuro specialists, patients, etc are also considered before taking any final decision.
4) What is the typical organisational structure of a home healthcare company? As per our research, we understood that the major proportion of the workforce includes the deliverable resource such as the nurses, attendants, doctors, etc.
Yes, this is true. We can say around 80% of the workforce includes the deliverable resource and the rest 20% is the operational team. Home healthcare companies don’t require many employees in the backend team as the main revenue earning source are the deliverable resources who cater services to a patient.
5) As per our research, we observed that patients in India generally opt for the non-recurring model of making payments. What is the main reason behind them for not subscribing for home healthcare services for more than 3 or 6 months?
In hospitals, the control is in the hands of a doctor whereas in home healthcare, it shifts to the patient or the family members. They want a particular attendant or a nurse whether he or she is that much qualified or not. Generally, the home healthcare companies don’t provide the same attendant for a period of 3 months or so. They introduce the patients to a pool of attendants, physiotherapists, etc. to make them familiar with the change if it happens. This is one of the main reasons behind the patients not subscribing for a period of 3 to 6 months.
Secondly, people start self-medication and stop availing services as soon as they feel like they have started recovering even when the doctor or the home healthcare company recommends them to continue the services.
Moreover, there is hardly a price difference of 15-20% between a subscription and a non-recurring payment mode. It is not much lucrative for the patients but could act as a driver for price conscious consumers.
6) How do you define the success benchmarking parameters for a home healthcare service provider?
Doctors are the main factor for defining the success of a home healthcare company. If the doctors are convinced, home healthcare companies will get the patients on a regular basis. In addition, some factors such as their presence in the digital world, getting customer referrals from existing patients because of the quality services provided also define the success of a company in the home healthcare segment.
7) What are the margins that a healthcare service provider is looking forward to? Can you throw some light on the margins offered across different cities or for different services?
It depends on the state law for labour since manpower is the major cost factor, other miscellaneous costs such as city expenses in terms of hostel, office rental also need to be taken into consideration. Then comes the running cost of the unit and product cost. All these factors predominantly decide the overall margin of business.
It is clear that the services in Delhi would be expensive than in Kolkata for all the reasons we know now. The margins for critical care services would be higher than the elderly care services as there is a lot of competition in the latter services.
8) How do you see the future of the home healthcare industry in India?
The future of the industry is bright. It is still in its early growth stage but with increasing awareness among the people, QAI Accreditation being introduced, insurance tie ups, etc., it is going to grow rapidly. Moreover, it would be a positive for the industry if panels like PSUs and CGHS consider the home healthcare players as part of a supporting entity for providing healthcare services in the country.
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