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>View discussions about this entry Country: India
Organization: Medicine Shoppe India
Focus of activity: Service/process
Year the initiative began (yyyy) 2006
Positioning in the Mosaic of solutions
Define the innovation: We are providing low income health care clinics. These clinics are set up in low income communities of urban India, the slums. The average income of families here is $100-150 per month. The centers are known as Sehat, which means good healh in hindi (Indian national language). The clinics are staffed with a qualified MBBS doctor which in itself is unique as majority of the practitioners in these areas lower than this qualification. The clinic is linked with a pharmacy next door and a vision center. A patient can get free consultation at the clinic, provided they purchase the prescription from the next door pharmacy. If they choose to buy prescription elsewhere then they have to pay a nominal charge of Rs. 20 (25 cents) for the visit. Follow on visits for the same ailment are completely free. The pharmacy dispenses high quality generic medicines. Other competitors either dispense high quality but very high priced brands or low quality generic. The vision center is a unique add on. A huge problem is low income India is people's ability to have clear sight. While the solution is so simple, wear a pair of corrective lenses, lot of consumers in these markets have a fear that lenses are very expensive and so defer the purchase decision. This happens as the current optical stores are non transparent and over charge for giving these product. Our centers have price points neatly laid out and a customer can get a pair of lenses with the frame for as low at $3. This is around 50-60% lower than what is being charged in the market and yet we make a good profit at this price point. Our clinics also offer other services like IV, suturing, nebulizers etc at 30-40% lower than market prices.
We believe that health care is a basic need. Current practitioners and health care service providers have over charged the customer, making him/her feel cheated. We plan to change that by making Sehat a health care access point for the low income customer. Context for Disruption: India is a market where more than 70% live on less than $4 earning per day. Health care is the 2nd largest expenditure for an Indian family (first being marriage of a female child). It is also the 2nd largest reason for pushing people into below poverty line. Health care for low income India is both complex and expensive. The choiceless consumers are paying a very high price poor quality service from substandard health professionals. The fact that there is no public pay system (except for people below poverty line) and almost all health spending is out of pocket, is why most low income Indian's defer health care expenditures till it becomes essential, and that is when they also incure the most cost. The worse affected are the ones who are NOT below poverty line but also cannot afford health care, those earning between $60-$120 per month. They do not qualify for government care and cannot afford private health expenditure. This is also coupled with the fact that as this customer is typically uneducated, he/she is also a ripe unsuspecting target for counterfeit drugs. A lot of customers in this segment of society end up consuming counterfeit and substandard medicines, often leading to disastrous consequences.
Medicine Shoppe India, a leading pharmacy chain, has decided to do something about it. We have set up Sehat health care clinics in low income communities of urban India. Due to our agressive price points the clinic attract lots of customers and are gaining trust. We will very soon be in a position to guide the low income customers to the right health care solution through the myriad of health care practitioners and hospitals in India. This will empower the customer to make informed choices and make pricing more transparent. The health service providers will face pressure due to this change, but the pressure will only be good for the customer. Delivery Model: We are setting up these clinics inside these low income communities. So our model has the great advantage of being present at the source of the customer and hence being completely visible. This is also a disadvantage as our reach is limited to the communities where these clinics can be opened.
We have created a unique communication program. Most conventional marketing options don't work as most of the customers in these markets cant read. They can understand but this would be very expensive medium of TV. We have created a community outreach program. We hire 3-4 health workers in each community, train them and make them visit every household. Here the workers look for disease symptoms and based on that guide the patient to our clinics. This program has been very succesful as it creates awareness about the clinic one on one and also brings patiens into the clinics. Key Operational Partnerships: Our key partnerships are with pathology/diagnosis labs, specialist physicians and hospitals in these areas. These selected health service providers are required to give a 20% discount to any patient referred from Sehat. This way the patient can save more money by going thru the Sehat doctor.
Financial Model: We have a for profit model. Our income is derived from sales of prescription, OTC products, vision products and clinic services. The goal is to ensure every clinic is making an operating profit by the 9th month.
Effectiveness: Till date appx. 10,000 low income patients will have benefited from our service in low income communities. At present we have 8 Sehat clinics.
Scaling up Strategy: The main priority for the next 3 years is to ensure low income patients have a solution to reduce their buegeoning health care expenses. Our goal is to enable patients to save between 20-30% on prevailing health care costs. We are also starting to promote government promoted subsidized health insurance schemes knowm as UGHS, under which a family of 4 can get insured upto Rs. 25,000 for Rs. 2 a day. This is imperative as Sehat can only enable a patient to save 20-30%. The remaining expense will need to be paid by the patient, which may soon become unaffordable. Insurance can insulate them from such expenses. We hope to create awareness via our community marketing program and will also act as point of contact for the insurance program.
Origin of the Initiative: I was inspired by Jacqueline Novogratz at the Acumen Fund. I met with the Acumen team in mid 2005. At that time we were an urban pharmacy chain. Acumen inspired us to look into these low income markets, which were ironically in front of our eyes, only not visible to us. When I met Acumen I was confident that a market existed in low income segments of the society. Acumen's goal has always been to support sustainable businesses in low income markets. The irony of India is that almost every entrepreneur and business is busy trying to find solutions for the middle and upper income (the haves) which is about 300 million people. The remainder 700 million people are low income and no one is finding solutions for them. We at Medicine Shoppe India decided it was time that we looked at serving this market and provide a solution that will bring much needed help and create a sustainable enterprise.
What are your two main challenges to finance the growth of your initiative: First challenge is finding investors who are willing to be patient. Low income markets are profitable in the long run. Hence the challenge is finding patient capital which can take a 7-10 year horizon. Second is finding a location in these communities. This is always a challenge as a lot of existing retail space is unauthorized. We end up paying higher rents for legalized space.
How did you hear about this contest and what is your main incentive to participate? I was contacted by Ashoka Foundation to participate in this contest.
Do you have an annual financial statement? Yes.
Do you currently have an annual financial statement that tracks profit/loss? HYes.
Contact Information:
Viraj Gandhi
CEO Medicine Shoppe India (Business) viraj@ms-india.com A2 Jitendra Estate, MV Road, Andheri-E, Bombay-93, IndiaMV Rd, Andheri India Tel: +9122-40054567/68 Fax: +9122-28213602 Website: www.ms-india.com Discussions about this entry |
Low Income Health Care Centers
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