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19 | Creating viable business models for inclusive growth through the National Optical Fiber Network Despite the Government’s considerable spending on healthcare, the doctor-patient ratio continues to remain low at 1:25,000 (May 2012) in rural India 29 . This is in stark comparison to other countries such as Brazil (1:900) and China (1:950) 30 . Also, close to 31 percent of the rural population in India has to travel over 30 km to get the needed medical treatment 31 . Such travel involves cost of transport, cost of food, and other supplemental costs, which, collectively can be as high as 81 percent of the total costs incurred 32 . Most importantly, such travel leads to forgone daily wages, jeopardizing subsistence for the patients and their relatives. As a result, the rural population is often reluctant to seek medical attention. On the other hand, according to some estimates 33 , the out-ofpocket healthcare expenditure in rural India averages INR 1,115 per person, per year. This indicates that there is significant demand for healthcare services in rural India, which the public healthcare system is not being able to meet. This presents a huge opportunity to build a healthcare delivery model that addresses the three basic drawbacks of the existing system: • Shortage of doctors: The alternative model should be able to remotely draw on the expertise of trained and qualified medical personnel available in urban hospitals • Access issues: The model should be such that rural patients get access to healthcare facilities nearer home • Low ability to pay: The model should not impose high additional usage charges on the patients All the above can be achieved through telemedicine – the exchange of medical information from one site to another via ICT tools using two-way video over a high-speed communication network. Telemedicine centers are equipped with technology that enables access to specialist consultants situated in urban centers through real-time video conferencing techniques. This addresses the problem of high doctor to patient ratio in rural areas and also makes it possible for rural patients to access specialist advice. The staff manning the unit is also capable of providing basic medical treatment and procedures, eliminating the need to travel far to access basic care. The telemedicine centers can either be mobile (e.g. mobile vans) or stationary (housed in a brick and mortar premise, e.g. the Primary Healthcare Centers, or CSCs). Telemedicine in rural India is not a new concept. Many of the broadband pilots and trials under progress in the country are already using this alternative form of healthcare delivery. Case study 3: Cisco – Project Samudaya (Karnataka) Proposition: Connect Primary Health Centers and Community Health Centers in blocks and villages to district hospitals or to a super-specialty hospital via cloud-based healthcare platform (including Internet, video, networking, collaboration, and diagnostic equipment) Execution Mode: PPP Reach: 27,000 consultations completed in a span of 12 months Impact • Assessed and treated 125 Severe Acute Malnourished (SAM) children • Pre-natal counseling for more than 30 expectant mothers • Educated 100+ nursing mothers on nutrition and hygiene • Price point established: Around INR 50 Source: CISCO High broadband speed being central to the theme of telemedicine, the NOFN presents a very good opportunity for the private sector healthcare providers to join the Government’s healthcare mission and make healthcare affordable at the grass root level, while sustaining the business objective through commercially feasible business models. There could be two models of offering telemedicine services through NOFN – services offered directly by a private healthcare provider or services delivered through CSCs in collaboration with private players. 29 Indian Incorporated.com 30 Gulf Medical University 31 ‘The Shameful Frailty of the Rural Healthcare System in India’, Bertelsmann Stiftung: Future Challenges 32 ISRO, ‘Telemedicine, Healing Touch through Space. Enabling Specialty Healthcare to the Rural and Remote Population of India’, February 2005 33 ‘A cure for rural India’, the Smart CEO
Creating viable business models for inclusive growth through the National Optical Fiber Network | 20 Model 1: Commercial telemedicine centers owned and operated by private healthcare providers This model looks at widening access to good quality primary healthcare at the Panchayat level through telemedicine centers that can facilitate real-time two-way video calls between rural patients and doctors operating from urban hospitals. Proposition: Delivery of quality medical advice to rural patients at their doorsteps Figure 5: Telemedicine services through a private healthcare service provider Source: KPMG analysis • Input –– Connectivity: Fiber connectivity through NOFN –– Training and manpower: To be provided by the private healthcare service provider –– Ongoing management and maintenance: To be provided by the private healthcare service provider –– Physical Infrastructure: Building/premises, telemedicine equipment (PC, scanner, router, microphone, web camera, etc.), medical equipment, power supply and back up (including alternative renewable energy sources such as solar power) –– Marketing: To be undertaken by the private healthcare service provider, in collaboration with the Gram Panchayats • Cost –– Capital expenditure: Private healthcare providers can invest on setting up the facility. Capital cost heads include telemedicine equipment (e.g. router, PC, camera, scanner), peripheral medical devices (basic diagnosis and treatment equipment), and software (electronic health record management). The Government can possibly provide the premises free of charge (e.g. allow the center to be set up in a connected government-run school after school hours). (Refer to exhibit 3 for detailed viability assessment). –– Operational expenditure: Operational expenses would include salaries for personnel, power and fuel expenses, consumables, etc.