April 2012

High tech gadgets attract doctors

Vennimalai, Managing Director, Aavanor, says that cutting edge technology has a big role to play in the life and profession of healthcare professionals

dIgitalhealth

What, according to you, is the size of the healthcare IT market? What are the leading segments that fuel growth?

The healthcare IT market is now catching steam in India. With the markets in the west heading towards maturity, Indian providers are slowly waking up to global trends. Numbers such as an annual IT spend of around `500 crore by Indian healthcare providers are spoken about, but this is still very low compared to international spends. Over the next three years, the Indian market will see significant growth and market spend will easily double.

Large deals such as the `1000 crore plus ESIC deal with Wipro, conducted couple of years back and hardware/ software deals for a few hundred crore coming up in a few states are likely to increase general activity. While large IT companies will be strong contenders for mega deals, there will be significant activity for the mid-sized and smaller companies in the sub-10 crore deals.

dIgitalhealth

Being one of the oldest and most coveted, healthcare IT companies in India, how do you see Aavanors progress in this market? Who are your key competitors in this space?
Aavanor is being perceived as a significant player in the Java/Open Source healthcare IT space. We are receiving an increased number of enquiries for EMR, HIS and BI solutions. As new players enter the healthcare space, they see technological superiority as a marketing advantage. This is largely good for the industry as overall standards are brought closer to international levels. It is now proven that quality of patient care and safety is vastly improved with good IT systems in place and the key drivers for IT acquisition are transitioning from accounting/billing, to medical perspectives.

Competition in this space is both from the large and mid-size Indian companies. We expect that the larger players will soon exit the sub-10 crore deals, as they will find them unviable, can bog them down and distract from the larger governmental deals.

While health IT experts across the globe promote the concept of paperless hospitals, very few Indian hospitals have actually adopted paperless functions. How can this change be brought about and when can we expect Indian hospitals to go completely paperless?
Most healthcare professionals in India simply dont believe that going paperless is possible or even desirable. However when presented with scientific evidence that this is both possible and helps improve patient safety, they take to it with vigor. Their professional pride is also pricked when they see their class mates in the US making the change to EMRs. While we have found doctors to be initially resistant, we also see them as being most interested in upgrading their systems once convinced.

Most successful doctors have high confidence levels and are quite willing to learn new things. We have had little resistance from this group and once we show them that our systems actually save them time and help them see more patients, they are sold on the idea.

It is also our experience that doctors are Gadget Freaks, who love to get their hands on the latest technology. So high-tech offerings immediately attract their attention.

What is the impact of the global meltdown on the healthcare IT market?
Growth between 2008 and 2011 was muted or flat in healthcare IT. It appears that global trends have helped slowdown growth in the Indian market. However, pressure on costs for western organisations and the improved acceptance of Indian products is now making international healthcare organisations look seriously at product offerings from India.

We expect that over the next three years, the European, African and Latin American markets will become more receptive to Indian offerings. The combined effect of cloud based offerings becoming more popular and Indian products maturing will drive growth for companies positioned in this space. The traditional American and European markets will continue to generate the greatest amount of sales for the next few years, but will quickly be caught up.

What are the key challenges faced by health IT vendors in the Indian market? What are the opportunities for growth?

Although there are a number of companies in this space, the serious and focussed players are limited to about ten. I am impressed by the maturity of many products from these companies and am quite confident that they will do well, both in India and internationally.

One of the biggest challenges we faced was not to lose hope, as this market has been notoriously slow and stingy. I have seen a few good companies simply fade away into other verticals. But for those who stay the course and continuously innovate, offering new features just when the market wants them, and being agile on revenue models, huge growth opportunities await over the next few years.

What is your view on the penetration of health IT in various healthcare set-ups in India?

I am quite sure that of the 15,000 odd hospitals in India, more than 60 percent are using IT in some manner, especially in their pharmacies and laboratories. This is very good, as they now only have to cross the other half of the bridge to get the entire hospital wired.

The challenge for our hospitals, however, is that most of these systems are stand alone often written for a few desktops. So our cycle powered IT now needs to get serious. By tending to project upwards based on the rudimentary systems now being used, many of our institutions fail to see the order of magnitude increase in complexity that will come with a large integrated server based solution. Apart from under budgeting, they also tend to overlook the serious training and infrastructural requirements this change will necessitate.

I have seen some very well planned and operated IT departments in our hospitals but for many, it is still knee-jerk.

What is your current product portfolio? Do you have any products in the pipeline?

Our latest offering is a phone based transaction system for hospitals that adds on to our current product portfolio. This includes EMR, HIS, Pharmacy Management System and Laboratory Management System. DOC99.com is our cloud based EHR (Electronic Health Record) Portal.

This can potentially bring about a radical improvement in the usage of EMR in the country, as it will be offered to the entire doctor community in the country. The EHR allows all components of the healthcare vertical to collaborate on a unified record for all patients. With increased adoption, rapid and widespread penetration into the industry is possible in a very short time.

What is your future roadmap and where do you see Aavanor and the Indian healthcare IT market, 10 years from now?

While the future is always misty, it is quite obvious that consolidation and acquisitions will become more common over the next few years. Aavanor is looking closely at opportunities for growth via this route as a means of targeting large deals and new markets. The market is going to grow exponentially over the next 10 years.

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