Himesh Joshi, a graduate from the Indian Institute of Technology, Bombay is the chief executive officer and cofounder of Ayu Health, a platform that provides small but quality partner-hospitals with technological and backend support.
Joshi, who featured in the Forbes ‘India 30 Under 30’ list in 2018, cofounded e-commerce venture Zefo. With the intent of providing high quality branded healthcare experience to Indians, he cofounded Ayu Health in 2019. In this chat with Moneycontrol, he talks about how his platform works and his vision and plans. Edited excerpts:
What makes your services different from those of other private healthcare providers?
So we partner with existing hospitals. What we realised very early on was it’s not that there is a dearth of good quality hospitals. We have some excellent doctors who have set up very good infrastructure and are running very good hospitals, which are clinically best in class. But they don’t necessarily have the ability to make the hospital stand out, make their brand stand out and compete in what is becoming a very crowded space. Because most doctors ultimately want to set up their own hospital and nobody wants to do it outside of a tier-one city, so good hospitals are largely limited to big cities.
And this is where we saw the opportunity: on the one hand, we want to build a branded chain. On the other hand, there are high-quality assets being run by very good doctors, which are not doing that well or which could actually do with some support on getting more patients into the hospital and also a bunch of things on the backend.
And that’s what we do, where we partner with the hospitals and co-brand with them. Our brand allows them to improve their top line by anywhere from 20 to 50 percent. But what we bring in for these hospitals is also the technology and scale that they lack as standalone hospitals. So a standalone 100-bed hospital probably does not have the ability to create really good technology to monitor patients. What we do is we partner with these hospitals, we get them demand, but we also give them the benefits of a large chain in terms of technology and scale at the backend, while still allowing them to run the day-to-day operations. So that’s the fundamental difference between our model and how hospitals have traditionally been set-up.
Your recently started operations in the National Capital Region. What’s your plan for the region?
Our model here is the same as what we’ve done elsewhere. We have identified a few hospitals run by high quality doctors and we have partnered with them. We would conduct a clinical audit before we go in. So we want to ensure that clinically the hospital is sound.
The other thing that we look at is the network. Our principle is that there needs to be a hospital not more than 15 minutes away from any location where we already exist. So we would build a network with that in mind.
And the other thing is the kind of hospital that we work with tends to be strong in two or three specialties which happen to be the specialties of their founding doctors. So if I have a hospital in an area of Delhi that is strong in cardiology and gynaecology, for example, I will next tie up with a hospital nearby that is strong in other specialties. So those are the two design principles that go into building the network.
So the asset-light model in healthcare is going to work?
Yes, that’s because the asset-heavy approach is not very scalable. There are only about six or seven truly national hospital brands in our country such as Apollo, Max, Fortis, Narayana and maybe a couple of others.
And even for these Pan-India brands, each of them has maybe two or three centres that contribute more than 70-80 percent of their business. So even the big hospital brands are very heavily focused on one or two really large hospitals with huge traffic.
Our model, on the other hand, allows us to be truly an India player and it is far easier to scale and manage as there are a limited set of things that we focus on and we can do a really good job at that. For instance, ensuring good patient experience, putting in a good pricing mechanism, putting in great relationships with suppliers of drugs and consumables so that our hospitals are able to get good prices while we leave the day-to-day execution of placing an order for purchasing the medicine to the hospital. We are able to pull off the high impact, important stuff that we do centrally while the execution in line with a certain process is something that is decentralised and it is done by the host. This design works well to scale.
How did your enterprise pull through during the pandemic?
We raised money in November 2019 and went live within a month or two and soon after, the pandemic hit. So very early on, we had to deal with a very major disruption. But the good part about that was it underlined the significance of telemedicine in healthcare.
Telemedicine was actually in a grey area before the pandemic – there was no clarity whether it was legal or not. And as a result, a lot of well-meaning doctors were not really willing to see patients online. But very soon into the pandemic, there was a government guideline on telemedicine and it became very clear in terms of what was allowed and what was not allowed. And that actually resulted in a lot of doctors embracing something like this. This also made doctors realise what technology can do and many of them were now open to innovations for improving patient experience.
Can your business model help make private healthcare more affordable?
So affordability and transparency in healthcare are major challenges in India. It’s not just that people feel that private healthcare is expensive, it can also be a little unpredictable in terms of what a certain treatment or procedure would cost and there is no concept of a rack rate in healthcare.
One of the things that we have done across all our hospitals is we have introduced fixed-price packages where once the patient meets a doctor and the diagnosis is completed, we provide a fixed-price package for the procedure.
The price will not change, irrespective of the number of days in the hospital. So if you spend five days instead of three, the price does not change. Even if there is extra cost involved, the patient has that peace of mind in that he signed up to pay rupees X and that is all that he will pay.
I would not say we are the most affordable or the cheapest platform out there because ultimately you also have to balance quality. So we never compromise on the clinical aspect – we understand that a certain procedure has to cost a certain price for the quality to be maintained. But we do try and price ourselves at a decent discount compared to the larger chains. That is because of the kind of hospitals we work with. These hospitals don’t have as much overheads and they are typically doctor-run. The doctors there are decision makers and can charge more reasonably.
What is the vision you have set for yourself and where do you see the brand, say, five years from now?
We want to be a trusted healthcare brand. If you think about an average patient, they don’t have a hospital brand that they can trust. All of us know that Apollo or Fortis are great hospital groups, but only the top 2 percent are probably able to afford these hospitals. For the rest of the folks who can afford private care and want good quality, they don’t always necessarily know which is a good hospital that they should be going to. In fact, the top 10 chains combined get less than 3 percent of the total patients but there are many smaller hospitals which are or can be good. And that is where we are fitting in.
We will be the brand of choice for the average patient. We will be that brand that you can trust and we want to be the largest hospital chain, not just in five years, but we will probably be there next year in terms of number of hospitals, in terms of number of beds. But more importantly, we are on our way to becoming the most trusted brand of hospitals in India. That should reflect in the experience that the patients have in non-clinical as well as in clinical outcomes.
