Emerging Trends and Road Ahead Co-founder, Medanta, The Medicity Funding Opportunities in Health Care Emerging Trends and Road Ahead Mr. Sunil Sachdeva Co-founder, Medanta, The Medicity July 21, 2014, Hotel Taj Gateway, Kolkata

India has $65B Healthcare Market which is expected to grow at 15% p India has $65B Healthcare Market which is expected to grow at 15% p.a; Within Healthcare, Delivery is the biggest segment

Medanta as conceptualized …

… and Medanta today

Availability /Capacity 8_84 7_84 6_84 Availability, Affordability, Quality and Physical access are crucial for efficient healthcare delivery Affordability Quality Dimensions of Healthcare access Physical Access Physical Reach This component defines physical accessibility of a requisite healthcare facility, i.e. availability of a healthcare facility having an outpatient department (OPD) for common ailments, and an inpatient department (IPD) for hospitalization. These facilities may either be public or private in nature. Physical reach is defined as the ability to enter a healthcare facility within 5 kilometres (5km) from the place of residence or work. Availability/Capacity This component defines availability of the requisite healthcare resources to provide patient treatment, i.e. doctors, nurses, in-patient beds, diagnostics, consumables, etc. The availability is governed by minimum specifications defined by the Government of India for public healthcare facilities, and international organizations such as WHO. Quality/Functionality This component defines the quality of the healthcare resources available at the point of patient treatment. Affordability This component defines the ability of a patient to afford complete treatment for the illness or disease Survey by IMS health for selecting a private healthcare facility, while quality of treatment was the second top reason (56%) Availability /Capacity Source: IMS health, June 2013

Availability and access to quality doctors remains one of the biggest concerns for India Healthcare Facilities concentrated in uRban areas Available doctors & nurses are ~50% of required “If shortage of doctors is one problem, their unwillingness to work in the rural hinterland is another, creating artificial scarcity in the area and high concentration in another” Union Health Ministry “It is alarming to note that doctor patient ratio in rural India is 1:20,000 as against the urban ratio of 1:2000 which itself is far below the WHO requirement of 1:250 in rural India ” ONICRA, 2013

Disparities exist even at a regional level Source: PwC report, 2013

2_85 Poor quality and inadequate number of PHC’s make Primary Health Care a challenge ~26K government-run primary health care centers and 615 district-level hospitals Poor quality of delivery at these institution,; highly underutilized ~200K privately-owned general physician clinics No standardization in terms of processes, quality and service levels Patients end up going to large tertiary care hospitals even for basic health care needs more expensive and not easily accessible Shortfall of ~17K PHC’s and ~2.6 M health workers nationwide; 41% of PHCs lack healthcare personnel If you are having a stomach ache – where will you go

INNOVATION CONSTRAINTS Physical Access to quality healthcare Lack of Primary Health centers Unavailability of doctors in Rural Areas Regional disparities CHALLENGE Infrastructure takes time and money Artificial constraints – good doctors don’t want to go to rural areas CONSTRAINTS INNOVATION

M HEALTH 1 Source: PwC report, 2013

M HEALTH 1 India receptive to adopting Mhealth 7_85 M HEALTH 1 India receptive to adopting Mhealth Currently, MOST # of live projects in india Mobile penetration on the rise Developing economies more receptive to change Offers solutions to the core problems – Availability and Physical Access Source: PwC report, 2013

HEALTH CARE UNITS IN TIER 2 AND TIER 3 CITIES 2 8_85 10_85 HEALTH CARE UNITS IN TIER 2 AND TIER 3 CITIES 2 Huge demand makes it a lucrative opportunity Big as well new hospital venturing into small cities Cost of setting up of infrastructure is low Demand is high as income level of people residing in Tier 2 and Tier 3 cities on a rise Government offering incentives Big hospitals like Medanta, Fortis, Apollo and Manipal Independent hospital chains like Vaatsalaya , Glocal 50- 100 bed hospitals in tier 2 and tier 3 cities >$15M raised from VC and PE funds

PUBLIC PRIVATE PARTNERSHIP FOR SETTING SUPER SPECIALITY HOSPITALS 7_84 PUBLIC PRIVATE PARTNERSHIP FOR SETTING SUPER SPECIALITY HOSPITALS 3 Alone cannot best solve the problem of Health Care Potential benefits include better quality , more resources – funds, technology, increased access etc Models Operations and management contracts BOT through SPV for private financing DBFO - Design, build, finance and operate – variation of BOT Lease: Private sector provides own health care and risks. Concessions: Government regulates price and quality. Private sector invests, pays for concession rights. Government contributes to reduce commercial risk. Joint ownership. Sharing revenues, expenses and assets. Technological expertise through private sector.

THE WAY FORWARD Hospitals in Tier 2 and Tier 3 cities Emerging Trends Mobile Van Primary Health Care Units Hospitals in Tier 2 and Tier 3 cities Super Speciality Hospitals

SO WHERE DOES THE FUNDING OPPORTUNITY LIE? CHALLENGE OPPORTUNITY INNOVATION FUNDING OPPORTUNITY