Why is maternity hospital chain Cloud Nine engaging with startups to up its technology game?
Cloudnine, a maternity hospital chain with 12 centres wants to make a dent in the universe by investing in clinical and business innovation with technology. The hospital chain has raised $102.2 million in three rounds, since 2012, from Sequoia Capital and Matrix Partners. Co-founder and Managing Director Rohit M A is now laying out a technology roadmap for the hospital to be able to track the entire lifecycle of birthing. The plan is to be able to track a pregnant woman from the moment she starts her consultation. She gets access to Cloud Nine’s suite of services delivered over a smartphone. Even doctors have to get used to web apps that collate information on disease incidents related to a patient’s data.
The innovations planned include a plethora of services ranging from an app for patients with relevant interactive content provided by global research Universities; apps for doctors and employees with real-time analytics for business and medical records; and food services for patients to wearable technology and connecting medical equipment to doctors’ tabs. It is even harbouring thoughts of setting up an incubator for startups, but these plans are not drawn up yet. The intention is to track the life cycle of a pregnant mother not just till the delivery but till the baby is a year old.
“The opportunities are enormous with current technology. We have plans to bring in several innovations to help our patients,” says Rohit.
One may ask why Cloudnine is investing in consumer technology; perhaps it’s because its customers – the city-educated millennial generation – are becoming parents and they want a global experience even for birthing. But Cloud Nine believes technology is going to change the way mothers’ experience pregnancy with informed decisions on healthcare and medicine.
However, not much can be said about other hospitals in India. Apart from the 20 odd hospitals that have raised private equity money, Indian hospitals spend less than 0.75 percent of their revenues on technology. But that is going to change.
The market opportunity
According to Gartner Inc., healthcare providers in India spent $1.2 billion on IT products and services in 2015, an increase of 7 per cent over 2014. The Gartner forecast included spending by healthcare providers (included hospitals, as well as ambulatory service and physicians practices) on internal services, software, IT services, datacenter, devices, and telecom services.
“IT services including consulting, implementation, IT outsourcing, and business process outsourcing, will be the largest overall spending category throughout the forecast period within the healthcare providers’ sector,” says Anurag Gupta, research vice president at Gartner.
The report adds that IT & BPO services reached $334 million in 2015, growing at 7 per cent over 2014. The BPO sub-segment recorded the fastest growth rate of 15 per cent over 2014. IT outsourcing was the largest sub-segment in IT services recording a 10 per cent increase in 2015 to reach $103 million in 2015. The software market grew 6.7 per cent in 2015 to reach $102 million, up from $96 million in 2014. Vertical specific software (VSS), which includes hospital information system, electronic health/ medical records, health information management, patient financial management, and more, grew 6 per cent in 2015 to reach $28 million.
“The growth in the Indian healthcare ICT market will be driven by the private sector, mainly focusing in tertiary specialised care, secondary hospital care, and government investments on core public health and primary care across several states,” says Gupta.
The technology spend in Indian hospitals can grow three-fold by 2020.
Founders like Rohit have realised the importance of working with different stakeholders. “Engaging with startups for the business side and to offer patient services is only logical,” says Rohit.
As we speak, the International Finance Corporation (IFC) has created a platform for healthcare startups and innovators. The IFC is going to pick the best of the applicants to work with large Indian corporate hospitals. The platform will also have VCs tracking healthcare to look at these new businesses. This year, IBM inked a deal with Manipal Hospitals to implement the IBM Watson platform to empower doctors to make quick decisions with clinical data.
Private equity firms have already invested in large hospitals like Manipal and Fortis. On the whole, there are around 20 hospitals funded by Private Equity parties in India. “The opportunity for hospitals to differentiate through technology is very large,” says V Balakrishna, co-founder of StartupXseed Ventures.
Here is what Cloud Nine is investing in.
- GE “Giraffe” incubator, a hi-tech single bed to care for newborns, which removes the hassle of shifting the baby from one bed to another
- Analytics to figure out the incidence of gestational diabetes (GD) in a population set to allow doctors to predict a patient’s propensity to get GD
- Wearable or smartphone-based technology to track vitals and other medical information of pregnant mothers, which will sync information to the hospital staff when mothers check into the hospital
- Content on an app for patients to understand pregnancy and also connect with their doctors on the app
- Other post-pregnancy services like monitoring the health of a baby through a wearable
- Analytics to maximise average revenue per bed by making sure healthy mothers leave the hospital and reach their home in two days
- Customised training on apps for hospital staff
- Collaboration with research institutions to improve healthcare delivery
- Innovation on benchmarks
“It has taken us six years to get all these processes in place. We have scaled up the hospital, now we need to invest in partnerships to get innovation going,” says Rohit.
Perhaps it is time we have startups creating business models that can support larger hospitals and smaller hospitals to deliver efficient and cost-effective care.