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How Glocal Healthcare Systems ensures affordable quality treatment

Glocal Healthcare Systems, headquartered in Kolkata, but with all its hospitals based in rural or semi-rural areas of West Bengal, hopes to change the face of rural health-care in the state - and subsequently in other parts of the country.

Dr Sabahat Azim

Dr Sabahat Azim Photo: Subir Halder

GLOCAL HEALTHCARE SYSTEMS
LOCATION: Kolkata
BUSINESS: Health-care in rural, semi-urban areas
FOUNDED IN: July 2010
LED BY: Dr Sabahat Azim
COOL QUOTIENT: Runs five hospitals providing low cost, high quality facilities

Ashish Majhi, 22, gropes for words when asked what his ailment is. He can only describe the way he is bleeding. His father, uncomfortable in the alien trappings of the modern hospital where his son has been admitted, also does not know. It is left to a male nurse to explain. "He has fistula," he says.

Doctors at the 72-bed Glocal Hospital in Bolpur in West Bengal's Birbhum district, about 150 km from Kolkata, say the Majhis typify over a quarter of their patients: poor folk from rural backgrounds. Treatment for them is completely free, thanks to a central government health insurance scheme. Glocal has tied up with the government to implement the scheme in all its five hospitals in West Bengal. The Bolpur one aims to tap the 550,000 rural insurance policyholders in Birbhum district. "People said this is a very good hospital," says Ashish Majhi's father. "They said I had the card (insurance policy), and so I wouldn't have to pay anything."

But even those who are not part of the insurance scheme get top quality treatment at affordable cost. Glocal Healthcare Systems, headquartered in Kolkata, but with all its hospitals based in rural or semi-rural areas of West Bengal, hopes to change the face of rural health-care in the state - and subsequently in other parts of the country. "We are not catering to the luxury market," says Dr Sabahat Azim, CEO, Glocal Healthcare. "We want to deliver the health-care that I would like for my family, but at an affordable cost." While a regular Caesarean operation in a small town, for instance, costs about Rs 15,000, excluding doctors' fees, and up to Rs 1 lakh in a metro, at Glocal the charge is Rs 12,000, which includes the obstetrician-gynaecologist's and paediatrician's fees and five days' stay in an air-conditioned room. For insurance card holders such as Majhi, it is cashless.

Dr Azim, 38, a former Indian Administrative Service officer with a medical degree, says he hated his desk job and quit in 2006 to co-promote an e-governance venture. He left that to start Glocal in 2010 with former SEBI chief M. Damodaran as Chairman. His medical technology team is led by division CEO Saurabh Bhattacharya, an MBA from Harvard, and supported by Chayan Chatterjee, a Wharton graduate. In striking contrast, Glocal Healthcare's Chief Operating Officer Asutosh Srivastava started as a newspaper hawker.

Glocal's business logic is simple: cut the frills and keep costs low to earn Rs 25 lakh per month per hospital. All five Glocal hospitals have broken even in six months. In such areas, land costs much lower than in metros. Capital outlay is also tightly controlled - for example, Glocal hospitals do not have intensive cardiac units which cost patients an average of Rs 10,000 per day, but make do with high dependency units, which have nearly the same facilities, but cost around Rs 1,500 a day.

Glocal Bolpur Business Head Sanjay Mahapatra says the company's rural marketing team trains village paramedics and sources qualified doctors from Burdwan Medical College, the only medical college in the vicinity. It has formed a subsidiary, Indigram, to train nursing assistants and emergency medical technicians. "We also hold camps in villages to spread the word about the health insurance scheme," Mahapatra adds.

Technology too, is used wisely and economically. The Bolpur unit, for instance, does not employ a radiologist, but all radiological images are sent to a central lab in Lucknow digitally, which sends back prompt reports. Its model has found favour with venture capital funds Sequoia Capital and Elevar Equity, which have put up Rs 14 crore of the Rs 33 crore Dr Azim needed for the five hospitals. There are talks on with the financiers to fund an ambitious 50 more hospitals in Uttar Pradesh, Bihar, Jharkhand, Orissa and Chhattisgarh. Each one, comprising 100 beds, is expected to cost Rs 8 crore.

Is rural health-care financially sustainable? Dr Azim says he is confident of 20 per cent net margins. "There are three major challenges in rural health-care - quality, scalability and retention of clinical experts," says Sandeep Sinha, Director of Health-care and Life Sciences Services, Frost & Sullivan. But Glocal's doctors wave away the challenges. "I was making tonnes of money back home in Jabalpur, I don't need money," says Glocal Bolpur's anaesthetist Inder Mohan, a former army doctor. "My work is here, with these people."
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