India Insight

Health start-ups tap India’s growing home care sector

February 5, 2014

When Krishnan Ganesh’s father-in-law was diagnosed with cancer two years ago, Ganesh had to “run from pillar to post” to get quality medical care at home, a concept that is not prevalent in India. That’s when he hit upon the idea of a home healthcare service.

The Bangalore-based entrepreneur, who founded online tutoring company TutorVista in 2005 and sold it to British publisher Pearson for $213 million, then bought start-up Portea Medical in July 2013.

Portea Medical and start-ups such as Health Care at Home India, Homital and India Home Health Care provide at-home services ranging from geriatric and post-surgery care to physiotherapy and general doctor visits.

“Demand is large and technology can be used for innovation and disrupting the status quo, and basically address a large problem like we had done in TutorVista for education,” Ganesh said.

India’s home healthcare industry, which consists of home-based medical devices and home services, is worth $2 billion and growing at 20 percent annually, according to accounting firm PricewaterhouseCoopers (PwC).

The home-based devices market is well developed, but the home services segment is largely unorganized and dominated by small local agencies. Entrepreneurs looking for a head start into home care say the segment will soon pick up, fuelled by growing demand for elderly care, post-surgery rehab services and palliative care.

The potential market for home healthcare, which is estimated to be worth $130.4 billion in North America by 2017, is huge in India.

By 2018, India will have more than 200 million people above the age of 65 (who constitute the majority of home care patients), equal to the current population of Brazil, said Dr. Rana Mehta, executive director of healthcare at PwC India.

The prevalence of chronic diseases among an increasingly affluent population and a growing focus on primary and preventive care enabled by technology will push the delivery of care from the hospital to home. It’s no surprise then that the most requested home care services in India, apart from elderly care, are physiotherapy and diabetes management, care providers said.

“The sector is very nascent. It is currently completely unorganized to the extent it is present. Otherwise in many areas it is not existent at all. The organized wave would grow very fast,” said Vivek Srivastava, CEO of Health Care at Home India.

Investors and big hospital chains are also starting to show interest in the segment.

U.S.-based Bayada Home Health Care bought a 26 percent stake in Chennai-based India Home Health Care in September last year, its first investment outside the United States. Delhi-based Portea Medical, which has 230 employees, received $8 million in funding from venture capital firms Accel Partners and Ventureast in December 2013.

Delhi-based Health Care at Home India, which has around 100 employees, is a joint venture between the UK’s Healthcare at Home and the Burman family, promoters of Indian FMCG company Dabur Group.

“I think other companies are earmarking huge amounts for home healthcare. All this potential is yet untapped in the country. When will it take off? I don’t think it should take more than a year,” said Rajesh Vasudeva, Managing Director at Homital, which is also looking for venture capital and private equity funding.

Major hospital chains like Max Healthcare, Hinduja Hospital and Columbia Asia are also offering their own home care services.

Public awareness on home care is still relatively low, but has picked up in the last few months, say care providers, who are selling the idea of convenience and quality — care at the comfort of one’s own home, which also saves time and the cost of hospital stay.

“Patients typically ask us to come for two days, then end up calling us for 20, 30 or 40 days,” said Vasudeva of Homital.

Monika Sachdeva, who suffers from fibro fasciitis, a condition which causes severe nerve pain, found out about Health Care at Home India about five months ago when the company held a workshop in her Vasant Kunj neighbourhood in New Delhi.

“The kind of manual treatment that they gave was very impressive, very effective,” said 36-year-old Sachdeva, who had consulted various therapists without getting much relief. “I keep telling my friends, if anybody has a problem just go ahead and call them up.”

Heena Chhabra, 30, from Noida called home care when she developed an abscess on her head that needed to be drained. Her doctor said the wound would need daily dressing for two to three weeks after surgery.

“I would have had to spend so much time in the hospital. I would have to spend time, money, fuel — mostly time, and the inconvenience caused. I’m saved from that,” she said.

Health Care at Home India said it gets about 25 percent of its revenue from patient referrals.

“The most important thing here is giving a personal touch to the patient,” said Dr Kousar Ali Shah, general manager at Columbia Asia Hospital in Gurgaon. The hospital started home services such as physiotherapy, sample collection and pick-up and drops nearly a year ago after requests from patients.

For now, returns are scratchy and most start-ups are hesitant to share revenue details and targets, but upbeat about expansion plans.

Portea Medical and Health Care at Home India hope to break even in three years, while Homital said it expects to be profitable by the middle of 2014. India Home Healthcare said it has “broken even”.

All these companies operate in “Tier 1″ cities — New Delhi and its suburbs; Mumbai; Chennai; and Bangalore — as they work on the best ways to run their businesses. “Most of the companies which are working in this field are still working to get their business model right,” said Mehta of PwC India.

Portea Medical, which said it did 2,500 home visits last month, operates in seven cities and plans to cover 50 more cities in the next 24 months.

Healthcare at Home India, which said it serviced more than 1,000 customers in the last few months, operates in Delhi and its satellite townships, and will open in Chandigarh soon, as well as in Mohali and Panchkula in Punjab. It will expand to smaller towns next year.

India Home Healthcare, which operates in Chennai and Bangalore and takes care of around 250 clients a month, is looking at Hyderabad, Ahmedabad and Pune. Homital, which does 20 to 25 home visits every day in Delhi and its surrounding areas, said it plans to be in five metros by March 2015.

 

(Editing by Robert MacMillan; follow David on Twitter at @davidlms25 and Robert @bobbymacReports. This article is website-exclusive and cannot be reproduced without permission)

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