Ayurvaid Brings Ayurveda Hospital Franchise

AyurVAID hospital group is leading the transformation of ayurveda into a mainstream healthcare system beneficial to all segments of society, increasing both the quality and the accessibility of treatment available.

What do you expect to see when you walk through the doors of an ayurvedic hospital? Indian ambience, massage rooms, neatly dressed receptionist but not a certificate from the National Board of Accreditation for Hospitals and Healthcare Providers (NABH) adorning the front wall. Yes! An NABH certification captures your attention as soon as you enter Indias unique ayurvedic hospital AyurVAID.

This is not the only landmark achieved by this three-year-old hospital, located at Domlur, Bangalore. The hospital has recently been approved by the Karnataka Government to provide cashless facility for ayurvedic treatment to all state government employees and their families. With this AyurVAID has become the first and only ayurvedic hospital in India to receive quality accreditation and government approval for its facility.

AyurVAID is run by the umbrella company Kerala First Healthcare Services. The brain child of Rajiv Vasudevan, AyurVAID Hospitals integrates classical ayurvedic with modern allopathic practice to treat chronic medical conditions such as diabetes, arthritis and stroke. The first two hospitals are in Kerala: a 15-bed one at Ernakulum and a 30-bed one at Aluva.

With a current strength of six hospitals and health centers across five states in India, AyurVAID has grown to be a chain of hospitals, providing in-patient and out-patient facilities with pharmacy, consultation and a healthy ayurvedic diet. It not only provides curative but also preventive treatment for severe chronic diseases. AyurVAID has also introduced a low-cost hospital format called AyurSEVA, located in poor communities such as Dharavi, a slum of Mumbai, featured in the Bollywood film, 'Slumdog Millionaire'. However, all the hospitals abide by the same standards of service. AyurVAID is patient-centric and uses standardised processes to deliver safe, effective and affordable care to all strata of society especially poor communities, informs Rajiv Vasudevan, CEO, AyurVAID Hospitals.

Mission AyurVAID Hospitals is dedicated to applying classical ayurveda to solve modern health problems. Its mission is to provide high quality, affordable ayurveda (Indias traditional system of medicine) treatment, in combination with modern medicine, for chronic illnesses across all socio-economic segments and across India (and eventually abroad).

At an AyurVAID hospital, one can expect a rigorous detailed and unhurried consultation to identify the person specific underlying factors that are causing the illness. The hospital offers treatment for muscle bone problems, skin conditions, respiratory disorders, rehabilitation post stroke, paralysis, urogenital conditions, lifestyle disorders among others.

Leadership Vision

Rajiv Vasudevan AyurVAIDs vision is to lead the transformation of ayurveda into a mainstream healthcare system beneficial to all segments of society, including low-income households. It is known that the burden of chronic diseases has the most visible debilitating effect on the poor and their ability to earn a daily living. AyurVAID aims to address these healthcare issues and provide care through the ayurvedic system of medicine. AyurVAIDs vision is to lead the transformation of ayurveda into a mainstream healthcare system, avers Vasudevan. The Hospital wants to demystify the aura of 'magic' hovering around ayurveda and bring to light its true value as a system of healing. It is not that ayurvedic treatment is not available in India; however, it is marred by individuals and groups who project it as an unexplained magical healing method, laced with dark rituals, enticing patients from India and abroad. On the contrary, ayurveda is an ancient form of medicine which goes beyond pain relief and rejuvenation, backed by literature. This system of medicine has also evolved over time and today is capable of taking care of a large group of aliments in turn promising to take the load off the allopathic system of medicine, which in India is already burdened. Talking about the vision Vasudevan says, The aim of AyurVAID is to spread the message of aurveda to larger populations through a convenient system which is acceptable by the people. AyurVAID is poised to be a profitable enterprise with a social purpose.

Business Strategy

AyurVaid has changed the light in which we generally see aurveda. It is trying to revive this ancient art of healing and bring it closer to the people. However, it is not only a unique social enterprise but a profitable business model also. The business model is sustainable and scalable healthcare service delivery using the ayurvedic treatment as a base, explains Vasudevan. It is a for-profit commercial business model, which allows consumers to choose so as to impact maximum number of people. Our business model is definitely a for-profit model, adds Vasudevan. Its delivery model allows for crosssubsidisation by serving high-end patients as well as low-income patients. Service delivery format is standardised healthcare delivery aligned to NABH standards and all units have an in-patient, out-patient, pharmacy and consultation, Vasudevan further explains.

AyurVAID opened its first center in Kerala, an intelligent strategic step as ayurveda needs no introduction in Kerala and the patients there already use it as a means of treatment. However, venturing out of Kerala and moving to the Mumbai suburbs was a surprise move. Vasudevan explains, We do not have to go the extra mile of promoting ayurveda in Kerala. It is a very well accepted treatment module there. And it is with this belief and conviction that people will see the benefits of ayurvedic treatment and turn to ayurveda as a means of treatment, Vasudevan has gone ahead and opened more centers in different states finally targeting whole of India. We are creating a reliable and replicable system akin to allopathy which will make ayurveda the choice of millions with chronic illnesses over the next decade. AyurVAID will of course be in the front leading that paradigm shift," emphasises Vasudevan. AyurVAID hospitals are the only ayurvedic hospitals accredited by 12 of India's leading medical insurance service providers.

Money Matters

Treading an unknown path was not easy for Vasudevan, but he had years of experience dealing with ayurvedic preparations to fall back on. His firm belief in this system of medicine led him to pool in all his savings and convince a few friends to invest Rs 55 lakh initially into the project. As the project took off Vausdevan was able to convince more people and soon he managed to get external funding from the US based social investor Acumen Fund which till date has invested Rs six crore in the project. Our initial investment was Rs 50 lakh and Acumen further invested Rs 7cr confirms Vasudevan. We reached breakeven relatively fast, but cycle takes time to stabilise. He is currently busy scouting for investors for the third wave of funding for further expansion.

According to Vasudevan it is a sustainable model where investments are low with even lesser gestation period. Advantages for an ayurvedic centre are that it is low on capital investment and also RoI happens in three to four years. This is a lean business model. In a regular allopathic hospital cost per bed varies from Rs 75 lakh to Rs 150 lakh whereas in an aurvedic hospital cost per bed is Rs two-three lakh. Thats the beauty of it all! For Rs three lakh-a- bed serious medical care can be delivered which tackles a big chunk of diseases, informs Vasudevan. Most of the chain hospitals are small 15-30 bed facilities completely adhering to quality standards.

Adding to the strategic strength of AyurVAID is its operations, which is perfectly aligned with the organisations vision and quality is achieved with highly standardised procedures for all services provided. The location of the hospitals is strategically chosen; away from the clutter of the city, they provide a peaceful and serene setting to the target customer.

New Hospital

AyurVAID has set up an 18 bed AyurSEVA Hospital in the heart of Dharavi, in Mumbai in March 2009 and a 15 bed Ayur SEVA Hospital in Ramamurthy Nagar, in Bangalore in February, 2009. The result is an in-patient service offering for chronic disease management at the rate of around Rs 750 per day, even in cities like Mumbai and Bangalore.

Typically, medical insurance products targeting BPL and vulnerable segments of society have coverage of up to Rs 25000. With the very low cost of in-patient treatment (Rs. 5,000 to Rs. 7,000 per week) appropriate care becomes accessible to the poor, explains Vasudevan.

AyurVAID has collaborated with a leading private medical insurance companies to design a breakthrough insurance product with 'accessibility maximising' features, targeting low income communities. AyurVAID also collaborates with a leading Bangalore based NGO to extend primary healthcare services to unorganised laborers across Bangalore.

Perhaps, this is the first time that any ayurvedic organisation in the private sector has systematically addressed the core and major challenges to begin the process of repositioning ayurveda in the minds of different stakeholders - general public, government, insurance companies.

Challenges

In India, 12 million deaths a year are associated with chronic diseases. Low-income families are disproportionately affected due to the lack of affordable treatment and preventive care. Treating chronic disease drains away resources and affects the ability to earn livelihoods, creating a downward spiral of disease and poverty. However, the challenge faced by AyurVAID hospital is to make ayurveda the choice of the masses for treatment of chronic diseases.

Another challenge is to find trained dedicated staff. At present AyurVAID boasts of a good number of doctors as well as nurses at each facility. However, to find people with the right bend of mind is a little difficult. Ayurveda physicians undergo rigorous five-year education programmes that include detailed study of the classical ayurveda medical science as well as the essentials of modern medicine, surgery and pharmacology. Despite demand for their services, a lack of health infrastructure means the qualified and government-accredited ayurveda physicians are underutilised.

Yet, Vasudevan feels that it is possible to sustain and scale up this model of healthcare delivery. Its possible to take aurveda to the level of allopathy, the market size for both medicine and service in ayurveda is approximately Rs 10,000 crore.

Beyond this there is also the matter of a pricing model. A good pricing model is crucial to the business and needs to be effective to contribute to the stability of the hospital. The average price of an outpatient treatment level is about Rs 1000. By taking this approach, AyurVAID is increasing access to healthcare for the poor in a sustainable and scalable manner, while simultaneously expanding AyurVAIDs market presence and building a long-term customer base for the company.

In fact a look at the comparative cost of ayurvedic versus allopathic treatment brings out the pricing difference. Vasudevan explains with two examples.

There are three aspects to this comparison.Firstly, a root cause intervention versus symptomatic intervention. Secondly, consider the lifetime costs of having a chronic ailment.

The third consideration ss the non cost aspects, which are quality of outcomes(core medical benefits), quality of life (on account of medical management,physical and mental function) and finally, the impact on workplace (productivity), home (family) of person with chronic ailment.

For example, a patient with ikuchi-Fujimoto disease pays Rs 20,000 for allopathy consultations, diagnostic tests, and medicines. But according to Vasudevan, the same patient paid Rs 1,008 at AyurVAID.

Similarly, a rheumatoid arthritis patient was advised surgery for both knees at an estimated cost of Rs 1.5 - 3 lakh. Surgery was avoided with conservative ayurveda treatment at AuurVAID costing Rs 36,000.

Community Health Initiative

AyurVAID has developed the AyurSEVA brand of hospitals, which is a community initiative of AyurVAID Hospitals, offering AyurVAID services at affordable rates to low-income communities typically earning between Rs 6000-8000 per month. With identical medical standards, AyurSEVA units are able to bring down the cost of treatment by offering a general ward format and employing a lower cost of establishment and operations. Being close to urban slums, they reduce the total cost incurred by the target customer to avail the service, which works in their favour.

Growth Plan

The hospital chain is getting ready for the next wave of growth. The immediate plan is to get one more NABH accreditation for a different unit at Bangalore followed by the other units.

Other than this, the company is seeking a third round of funding mostly from a PE source. However, Vasudevan also adds that they are in no hurry to expand as they are concentrating on perfecting the business model, seeking clarity of the business model adopted and further refining it to settle into the fast growth path and strengthening its brand to be known as quality healthcare provider.

Currently all the hospitals are managed by the parent company but in future AyurVAID may look at a franchise model or a different business model to expand into Northern and Eastern states. Soon, cities like Bhopal and Kolkata will see new AyurVAID Hospitals. As we grow we will look at partners, reveals Vasudevan. Expansion in Mumbai is also on the cards.

AyurVAID is also focusing on the public healthcare delivery pie. We are keen to work with the government. Our mission is to take ayurveda to the masses and there is scope in the primary healthcare space. In fact National Rural Health Mission (NRHM) has provision for ayurveda and a large number of recruitment has taken place but the implementation is yet to happen,divulges Vasudevan.

At present AyurVAID procures classical drugs from a reputed company and distributes it through their pharmacy, but in future the company may be interested in its own brand of medicines. Right now we are not thinking of our own brand of medicine but some day we will take it up, says Vasudevan.

Source: Express Health Care Mgmt, 9 July 2011.

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