How Asian Heart Institute is taking quality, affordable medicare to rural India

Tara Mohapatra and Dr. Sudhir Vaishnav are people from different places- the former’s expertiseis in business and technology, while the latter is an interventional cardiologist.

But their individual attributes were perfect for their first venture - Asian Heart Institute, a super speciality heart hospital in Mumbai. While the Institute was far removed from India’s primary healthcare system, Vaishnav often came across patients who were referred to them from standalone hospitals in smaller towns. “We had cases from standalone hospitals in the Maharashtra and Gujarat region as they faced challenges on the infrastructure and management front,” says Mohapatra, Chairman and CEO, Asian Heart Institute. “We saw an opportunity here and felt that we could help these hospitals financially with our expertise and also improve customer experience for them,” he adds.

This thought gave birth to Asian Health Alliance or AHA which was registered in 2008. Its premise was to engage with small standalone hospitals, help them run and get better and make them viable. It was not an easy plan to execute though. The duo had begun with charging anengagement fee for imparting their experience and knowledge to these hospitals, but their suggestions were often struck down at the owner-level. “We wanted to have some ownership in the hospitals. Even though we were getting an engagement fee, a lot of our plans could not be executed because we had no ownership in the hospitals. Our company was also not able to grow as a business,” says Mohapatra.

The rewiring
The main challenge they faced was that the ownership of these hospitals was very complex. “Money was often collected in cash and there was no clear way of knowing the ownership structure or valuations,” adds Mohapatra.

As a reaction to this, the AHA model was rethought. Mohapatra tells us that while working with the doctors in small towns, they had realized that there was a big gap in diagnostic services -doctors were unable to access quality diagnostic services. “Organized diagnostics players like Metropolis were not really present in smaller towns. In these towns, labs were being run bytechnicians and often by people who were not adequately qualified for such work,” he adds.

This led to the setting up of the Asian Health Meter, the diagnostics chain run by the Asian Health Alliance, in December 2010. “We decided to focus on the district headquarter level and below. We wanted to offer cost-effective and quality diagnostics services and provide it as close to the customers as possible,” Mohapatra says. The Asian Health Meter, like all the other organized diagnostic service providers, is setting up its centers in a hub-and-spoke model. The difference? The company claims that its services are 40 percent lower than other organized players.

It currently has eight centers in Karnataka, two of which are hubs. The company plans to expand further in Karnataka before looking at venturing in to Maharashtra and Andhra Pradesh. Each of the spokes can conduct about 35 tests a day, while the hubs can conduct up to 300 tests a day. “We are now at 30 percent utilization and it will take a few years for all the centers to be operating at their full capacity,” he says.

The company is looking at a spoke for every 75,000-100,000 people and a hub for every four lakh people. It is also trying to encourage preventive diagnostics with activities like diabetes camps.

Need the commitment
In November 2013, Acumen Fund announced an investment of $750,000 in Asian Health Alliance. Karuna Jain, Senior Associate at Acumen Fund says, “In India, 30 million people revert to poverty because of healthcare expenses, which is why we have been looking at investingin primary healthcare. AHA, we noticed, provides quality services at an affordable price and it does this with a lot of innovation in terms of project delivery and cost,” she adds.

The company will now be looking to focus more on the diagnostics business and lesser on the management of hospitals, according to the founders.

“Since diagnostics is the first step in improving the quality of healthcare, it is important to focus on strengthening that. The diagnostic centers that AHA has are both inside and outside hospitals [4 each],” says Jain.

“We looking at setting up diagnostic centers in regions where the average family income is about Rs 15,000 per month,” adds Mohapatra. AHA broke even last year and Mohapatra adds that the company clocked a turnover of Rs 2.8 crore in the year ended March 2013. Their biggest challenge? “This territory is flooded with unorganized players. To be able to compete with that we have to be reasonably priced,” says Mohapatra.

This article first appeared in Entrepreneur India magazine.