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Please click here to download - CII

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21 | Creating viable

21 | Creating viable business models for inclusive growth through the National Optical Fiber Network • Revenue stream: –– Tele-consultation fee: The private healthcare service provider recovers the cost of service from patients in the form of a consultation fee. Since most of the cost elements are fixed, scale is of the essence to generate positive ROI. Exhibit 3: Telemedicine viability assessment • Viability of telemedicine offering in rural areas is a function of the facilities being offered at the remote center and the patient’s paying capacity. Telemedicine offerings can be segmented into three broad categories: Consultation only (including non-invasive cardiology), pathology services, and radiology. The cost to the end consumer increases as the span of availed services widens. • Investment in a basic, consultation only model stands at around INR 14 lakhs. This includes costs of medical equipment (treatment room equipments, telemedicine equipment, etc.) and a DG set, if required. This is assuming that existing infrastructure in the village (e.g. CSC, Panchayat office, local school, etc.) would be leveraged for setting up the telemedicine center. • Operating expenditure – comprising salary of a person trained in operating the telemedicine centre and administering basic medical treatment, power & fuel expenses, maintenance costs and consumables – lies in the range of ~INR 2 lakhs to INR 2.5 lakhs per year. This is assuming that connectivity would be provided free of charge by the Government. • Considering footfalls in the range of 180-200 per month at a Panchayat level (2-3 villages), a basic, consultation-only telemedicine offering becomes viable at a consultation fee of ~INR 120. • Assuming INR 50 as the paying capacity of a rural patient, a basic telemedicine facility would require some additional support to be viable. This support could be included as part of the existing National Rural Health Mission (NRHM) program in the form of health coupons to the villagers or the Gram Panchayats. Source: KPMG analysis • Government support: The success of this model could be accelerated through partial reimbursement of the consultation fee incurred by the patients. The Government may consider issuing cash-like instruments such as health coupons for this purpose. Alternatively, there could be monthly settlement between the private healthcare provider and the Gram Panchayat with no consultation fee charged to the patient. Funds from existing schemes such as the National Rural Health Mission (NRHM) could be channeled towards the service. The NHRM timeline ended in 2012-13 and currently, the Center is in the process of approving State Program Implementation Plans for 2013-14. • Benefits: –– Government: Enhanced primary healthcare delivery, rural skill development (specialists training rural doctors through video-conferences, telemedicine unit staff training other staff at the primary healthcare center) –– Private healthcare service provider: New market segment, referrals from telemedicine cases • Critical success factors: –– Viability gap funding –– Scale (volume of consultations) –– Awareness and word of mouth

Creating viable business models for inclusive growth through the National Optical Fiber Network | 22 Model 2: Rural Entrepreneur provides telemedicine services in collaboration with private players A slight variation to the model described above would be a rural entrepreneur acting as the primary interface of service delivery. This model assumes leveraging the existing CSC infrastructure. The Village Level Entrepreneur (VLE) running a CSC can tie up with a private healthcare service provider to offer telemedicine services. The incremental cost of setting up a telemedicine unit in a CSC will be lesser compared to the complete build-out cost in model 1 because many of the cost elements are already in place at the CSC – e.g. the space, the basic computer and peripherals, manpower, power back up, web-cams, furniture, etc. The acceptability of the service is likely to be higher, as it is provided by a rural entrepreneur. Proposition: Leveraging existing infrastructure to offer more acceptable telemedicine services, while building skills, encouraging rural entrepreneurship, and generating employment 34 Figure 6: Telemedicine services through a rural entrepreneur Source: KPMG analysis • Input –– Connectivity: Fiber connectivity through NOFN –– Physical infrastructure: As available at the CSCs and some additional telemedicine equipment –– Training and manpower: The VLE and his local resources are trained by the healthcare service provider for a certain period of time. Thereafter, the VLE can take over the task of operating the equipment and also offering primary healthcare services (blood pressure monitoring, glucose level checks, first-aid, etc.) • Cost –– Capital expenditure: Limited incremental investment over and above existing infrastructure at the CSC; the basic medical apparatus will be needed –– Operational expenditure: Incremental costs in the form of lease fee for telemedicine equipment, salary to additional resources, etc., to be borne by the VLE 34 NOTE: This research has not found evidence of this model being tested in any of the ongoing pilots/services.

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