1) Mukul Singhal, Associate Saif Partners delivering the ‘tutorial session’; 2) J. Sunder Rajan deliberating on investing at the bottom-of- pyramid; 3) 2nd session of panelists on dias; 4) Dr. Dharmider Nagar & Dr. O.P Manchanda narrating their hospital’s success stories; 5) Panelists receiving mementos & 6) Delegates networking among themselves
Healthcare Investment Summit 2010, an exclusive event on investment scenario in healthcare industry in India was organised by eHEALTH magazine on March 16, 2010 at The Claridges, New Delhi. The aim of this summit was to provide a prolific interface between investors and investees of healthcare sector who are aspiring to be a part of the emerging growth story of the country. Particularly, the summit intended to help stakeholders of the industry to explore newer potential of growth by understanding funding mechanisms and investor priorities, while building sustainable partnerships and invigorating ongoing collaborations in the health ecosystem.
To achieve this objective, the summit brought together senior management utives from private equity funds, venture capitalists, institutional investors and policy makers to discuss in an open and amicable forum with potential investees from hospitals, healthcare service providers, diagnostic labs, health IT vendors, equipment manufacturers and R&D institutions.
The event started off with a morning tutorial session by Mukul Singhal, Associate, SAIF Partners. Designed for potential investees in healthcare provider and technology space, the presentation emphasized on winning strategies for successful investments, while underlining essential elements and prerequisites for developing successful business plan for investors.
The main event was divided into four sessions, focusing on different aspects of investment landscape in healthcare, including hospitals, medical centers, diagnostic labs, equipment manufacturers, health IT vendors and rural healthcare deliverers.
The first session was chaired by Dr. Rana Mehta, Vice President-Healthcare, Technopak Advisors, with distinguished panelists including – Vikram Gupta, COO, India Ventures Advisors; Nitish Agarwal, utive Vice President, Religare Venture Capital; Alok Gupta, Investment Director, HSBC Private Equity Advisors and Deepak Gaur, Vice President, SAIF Partners.
(L to R): Alok Gupta, Investment Director, HSBC Private Equity Advisors; Deepak Gaur, Vice President, Saif Partners; Dr. Rana Mehta, VP-Healthcare, Technopak Advisors;Nitish Aggarwal, utive Vice President, Religare Venture Capital and Vikram Gupta, COO India Venture Advisors
Discussions in this session focused on challenges and opportunities of PE and VC investment in healthcare sector. The deliberations brought out how private equity and venture capital can catalyse a paradigm shift in the industry, both from provider’s as well as consumer’s perspective. Indian healthcare market is huge on account of the fact that healthcare needs of over a billion population has to be taken care of with a clear-cut distinction among consumers/patients across population segments spanning – liberalisation children, transition children and midnight’s children. These three different categories have different healthcare needs and investors have to keep this in mind before venturing into such a diverse market. The spotlight was also put on some of the other concomitant issues in healthcare such as the growing and ageing population of the country, increasing burden of chronic diseases, diabetes, inadequate infrastructure and poor affordability and accessibility of healthcare services for masses. seventy percent of financing is out of pocket as public spending is very low. The government has a very limited role at the level of tertiary care and therefore there is a felt need of the government taking on the role of a financer besides being a provider. Healthcare opportunities are big in India and are soon expected to grow but the lack of entrepreneurship in the industry provides the inertia to growth. Hence, the question that remains is how to accelerate growth? The simple answer that emerged out of the discussion was that there are innovative partnership models needed with active participation of government sector, as private investment is in a very nascent stage in India.
(L to R): Mohit Bhatnagar, CEO Sequoia Capital; Vishal Gandhi, VP-Corporate & Institutional Banking, Yes Bank; Dr. Ajit K.Nagpal, Chairman-Healthcare Advisory Council, Feedback Ventures; Dr. O.P Manchanda, CEO, Dr. Lal Path Labs; Dr. Dharminder Nagar, MD & CEO, Paras Hospital, Gurgaon
The second session was chaired by Dr. Ajit K Nagpal, Chairman-Healthcare Advisory Council, Feedback Ventures and the panelists included – Dr. Dharminder Nagar, MD & CEO, Paras Hospital, Gurgaon; Dr O P Manchanda, CEO, Dr. Lal Path Labs, Mohit Bhatnagar, CEO, Sequoia Capital and Vishal Gandhi, VP-Corporate and Institutional Banking, YES Bank.
Healthcare provision is a passionate subject and the challenges lie in tracking the VC and PE players and bring them on board. There is a need to create more beds rather than bringing about amalgamation. Dr. Nagar emphasised on the fact that there is a growing need to build assets in healthcare and to make it happen, partners from banks, insurance and government are required.
While Dr Nagar shared his personal success story in establishing the Paras Hospital and providing it the much needed organisational leadership, Dr. Manchanda from Dr. Lal Path Labs talked about his experience in diagnostics and that how it is different from the hospital industry. The growth in this sector is high and opportunities very large. Commenting on the aspect of technology, he also said that IT is integral for the growth of this sector and that future of healthcare lies in efficient utilisation of technology. Mohit Bhatnagar from Sequoia Capital, one of the investors at Dr. Lal Path Labs said that investment is a fuel that goes into the growth engine of a company. The concept of microfinance was also brought out well in this session, based on the premise that most of the rural population in India does not have access to finance. However, the panel agreed on the opinion that sufficient rigour and discipline has to be maintained for providing loans. Hence, combining social responsibilities with commercial aspects is the current need of the industry. Vishal Gandhi from YES Bank said that healthcare market in India is US$ 77 billion but the picture is hazy in terms of who will invest, how much to invest and when to invest. Multilateral agencies and venture capitalists are investing in commercially viable projects and not much success is seen in public-private partnerships. What emerged out of the session is that, along with the need for capital investments, there is an equal need for building lasting partnerships. The government not only has to provide equity but also land and cash, along with access to capital through soft loans in order to fill in the gaps. Delivering the final comments, Dr. Nagpal asserted that public-private partnership is the future of the industry. Nobody is bothered about the population which is not able to access good quality of healthcare at an affordable price. This session brought out many facets on healthcare investment scene and highlighted the need of a sea change in the way investors look at the industry.
( L to R): Vikram Gupta, COO India Venture Advisors; M. Vennimalai, CEO Aavanor Systems; Jayant Singh, Industry Manager-Medical Technologies, Frost & Sullivan; Anupam Anand, CEO Healthizen and Dr. Mallika Kapoor, Managing Director, NextGen eSolutions
The theme of the third session was investing in healthcare IT and medical technologies. The session was chaired by Jayant Singh, Industry Manager-Medical Technologies, Frost & Sullivan and panelists included – Anupam Anand, CEO Healthizen; Dr. Mallika Kapoor, Managing Director, NextGen eSolutions and Vikram Gupta, COO, India Ventures Advisors and Dr M. Vennimalai, CEO, Aavanor Systems.
The session began with a unanimous consent from speakers as well as the audience that IT has a huge role to play in healthcare. Dr. Mallika Kapoor brought to notice a very important fact that educating the providers about IT benefits is not an easy task. She added that, affordability is no longer a challenge for most hospitals, rather, it is the difficulty in making them appreciate long-term benefits of technology. It is important to realise that health IT is markedly different from general enterprise IT and that it needs to be uated in a totally different way. Vikram Gupta from India Venture Advisors very well asserted that spending in health IT solutions is going to be meaningless if there are no significant buyers. For this we need infrastructure in the form of hospitals, diagnostic centers, labs etc. so that IT solutions can be employed for meeting healthcare needs of patients. Currently, healthcare IT spend is 1.0-1.5% of the total spend in India. How people see value coming out of the IT in healthcare is the first important thing to determine. Average size of any health IT company is very small and people have found their niche areas where there is lot of competition. The stage is set for investment in India and people have started making investments in this segment.
Dr. Mallika Kapoor conceded that health IT is becoming very commoditised and for small companies it is difficult to adopt standards based practices. She made a very interesting comment that penetration of health insurance should drive standards rather than standards driving IT adoption. The deployment of interoperable software has to be consumer driven as hospitals have no commercial motive to create such systems. In this context, Vikram Gupta highlighted that there is no healthcare insurance regulator in India and unless healthcare standards and health information portability is in place, the situation is going to be worse
from bad. Therefore, it is imperative to first educate the government about the need of standards-based practices in healthcare and then take the agenda ahead with private players. Overall, the session was very enlightening and left the thread for discussions in the last session and complete the full circle in healthcare.
(L to R): Dr. Erna Surjadi, Regional Advisor-Gender, Women and Health, WHO; Dr Itamar Offer, Managing Director, Elbit India Healthcare; Dr. Ashok Kumar, DDG & Director, Central Bureau of Health Intelligence, Ministry of Health & Family Welfare, Govt. of India; J. Sunder Rajan, Head-Strategy & Business Development, Siemens; Rajive Gulati, Sr. Technical Manager, Haryana State Electronics Development Corporation and Dr. Naveen Jain, Medical Director Pushpanjali Hospital
The fourth session was chaired by Dr. Ashok Kumar, DDG & Director, Central Bureau of Health Intelligence, Ministry of Health & Family Welfare, Govt. of India and panelists included – Dr Erna Surajadi, Regional Advisor-Gender, Women and Health, WHO; Dr. Naveen Jain, Medical Director Pushpanjali Hospital; Rajive Gulati, Sr. Technical Manager, Haryana State Electronics Development Corporation; J. Sunder Rajan, Head-Strategy & Business Development, Siemens and Dr Itamar Offer, Managing Director, Elbit India Healthcare.
Dr. Ashok Kumar gave the audience a glimpse of the entire healthcare structure in India right from the primary to tertiary level. He said that majority of the population occupy the bottom of the pyramid and therefore good healthcare at primary level is sine-qua-none for building a sound healthcare edifice in India. In the course of his presentation the ideas that emerged pointed towards three essential elements of healthcare investment in India, they are – investing in sustainable partnerships, investing in sound health information system and investing for adoption of ICT in primary care delivery. The concluding presentation by Dr. Erna talked in length about the Integrated Hospital Management Information System (IHMIS) and also about information analysis and decision making aspect in healthcare.
In nutshell the event was a highly successful endeavour on part eHEALTH magazine to bring an array of issues relating to investment needs in healthcare with exhaustive discussion of each of them. The solutions which emerged from this summit can be our guidelines towards building a sound healthcare system in India.