THAT India’s primary healthcare is in dire straits is well known. While the affluent sections are being overwhelmed with the choice of superspeciality service, there is a widely held belief that there is no money to be made in providing healthcare to the bottom of the pyramid. Some entrepreneurs are challenging this as a myth and trying to improve the health of healthcare in India.
Ziqitza Health Care Services, the company behind the 1298 emergency ambulance service in Mumbai, has shown the way that it is viable to provide services at a subsidy or for free. Anyone can avail of their dial-in ambulance service, and the company has made it clear that ability to pay will not be a defining factor for using the services.
It was a few years ago that five individuals decided to junk their corporate careers to start the company. Shaffi Mather, Manish Sacheti, Ravi Krishna, Naresh Jain and subsequently Shweta Mangal came together in 2002 to begin Ziqitza.
The first four knew each other from their studies in the US in the mid-90s. Says Mr Sacheti: “We had all decided that we should go back to India and do something in healthcare.” Shaffi Mather and Manish Sacheti met during their MBA at University of Pittsburgh’s Katz School of Business, and quit their respective jobs with Reliance Industries and The Aditya Birla Group. Naresh Jain, who graduated with an MBA from University of Maryland, College Park left GE Plastics and along with Ravi Krishna formed the core team.
The statistics they found were startling. Just 6% of all people in India have access to ambulances with emergency services, which meant that there were several individuals that perhaps lost their lives just en route to hospitals. The point was further driven home when Shaffi Mather’s brother nearly lost his life as a result of poor medical services. Says Mr Sacheti: “Having come from the US and observed the way the health care system works there, we definitely felt that we could do something in India.”
They swung into action by 2003. Shaffi Mather, the CEO of Ziqitza, had worked with the London Ambulance Service as part of a threemonth training at LSE. This proved to be handy as Ziqitza and London Ambulance Service entered into a tie-up in India for paramedic training. Mr Sacheti says: “They even offered us an ambulance, but we refused.”
They then studied the ambulance service in Hong Kong and a subscriptionbased service in South America, but junked the latter because it wouldn’t work in a system where people just couldn’t afford to pay. Finally, they decided to settle down on a ‘sliding scale’ model of payment. In effect, people that could pay would be charged higher, while those that couldn’t were subsidised. But all callers would be able to use the 1298 service regardless. The five-member management team decided to divide the calls into two categories, cardiac calls and basic calls. Says Mr Sacheti, “The cardiac calls require medical intervention. So an ambulance for a cardiac call requires a doctor, a ward boy and medical equipment.” The basic calls won’t require the bells and whistles that a cardiac ambulance requires.
Although their initial studies suggested that the service would be profitable at Rs 5,000 per call, Ziqitza priced its services at Rs 1,500 for a cardiac call and Rs 750 for a basic call for the first 20 km. Mr Sacheti says: “We have discovered that it’s a sustainable business model even at this price.” In a sense, the ambulances break-even, but the company has got four sponsors, Tata AIG, HP, SBI and Playwin that keep the corporate office running. Curiously, it’s been the more affluent bunch that haggles with the ambulance operators when it comes to payment, whereas several lower-income patients from areas like Dharavi have paid up to Rs 1,000 without any hesitation.
The 1298 service was formally launched in 2005 in Mumbai by the Maharashtra chief minister Vilasrao Deshmukh. Ziqitza scaled up their ambulances from one to ten, and established a network of another 10 ambulances and omnis. As Mr Sacheti says: “We needed to have an ambulance for anyone that wanted the service and we can’t refuse calls. So we need to have other ambulances that will take up the load.” But Ziqitza makes it a point not to outsource the cardiac calls. On average, the service gets nearly 40-50 calls a day. But the service suffered some initial pangs. According to Mr Sacheti, “We would let the doctor decide whether the patient should be subsidised or not, but we found that the doctors were actually overcharging the patients and keeping the difference.” Now, all calls are screened. If they’re from the government or BMC hospitals, the fee is immediately waived off or cut.
Recently, Acumen, a not-for-profit equity fund, invested $1.5 million in Ziqitza to aid its expansion from 10 to 70 cardiac ambulances in Mumbai alone. The 1298 service will make its debut in Kerala as well by December. Mr Sacheti says that merely providing the service won’t be enough, it has to be world-class. Hence, the next target — get the patient to the hospital within seven-nine minutes of the call.
That would, perhaps, be the Formula One of emergency healthcare.
Author: Irshad Daftari is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".