 "India needs homegrown healthcare solutions due to affordability issues: Practo")
Practo, the country’s largest healthcare technology platform maps a patient’s journey from helping find the right doctor, get treated and recover. It connects 200,000 medical professionals, 100,000 clinics with thousands of patients who access its platform to reach for medical help. As India’s healthcare Unicorn (firm valued over $1 billion) consolidates, Shashank ND, Founder and CEO of Practo says that the slowdown in funding in the startup space will showcase real businesses than which were built of hype. “Real business models will shine now and teams with the right intents will survive,” he said in an interview with Alnoor Peermohamed and Raghu Krishnan. Edited Excerpts:
You have expanded a lot in the last six months?
More than the last 6 months, (it’s in) the last 12 months. We raised around $120 million overall in the last 12 months. We also did four to five acquisitions. We launched in multiple countries and locally our team size went up to 2,300 people. So, a lot happened, but that was built on a base that we’ve been building for many years.
We started in 2008 in Bengaluru and it took us many years to get to a particular stage after which we were able to expand. And now again, we see a lot of opportunities; it’s a lot of work which keeps us going.
What are those opportunities?
Healthcare is a very complex industry. You know, I keep using this example that when you fall sick, to recover you need to go through so many stages — you have to go meet a doctor, then you meet a secondary doctor, then you have a lab report, then you have a prescription, and then you have medicines and then you recover. It takes a complete ordeal and it’s a pretty big ordeal.
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It’s a mammoth industry where consumers haven’t been in the centre of things. And now from Practo, we’re trying to bring the consumer to the centre and make it simpler for consumers to go from unwell to being well.
The cost of treating a patient, even in the remotest parts is pretty high...
There are two India(s) — urban and rural India. In urban India, I think healthcare is more of a reliability issue, where your quality is your biggest concern. Costs are okay, but quality is your biggest concern.
In rural India, affordability is definitely the biggest concern, where the average spend of an Indian is $60 annually on healthcare, whereas in the US it is $10,000. That’s a huge difference. So, the problem is that the products built outside India can’t be used in India because the cost structures are so different that people can’t afford it. So, mostly the solutions that will be implemented in India will be homegrown; with homegrown cost structures, keeping in mind the affordability.
For this, will you work with governments and other private players?
Initially that’s the model which we’re approaching it with, but in the future maybe we might go direct. You know, we’re working with a couple of state governments to get there.
In urban India, government role of healthcare is very low, but in rural India, it is very high. In the primary healthcare centres (PHC), efficiencies can be brought in with the use of technology.
Is there a price point at which you will deliver these services?
So, that’s the thing why the government will be required. I think at the current state, our unit economics work very well up to 100 cities. Beyond that, I think through subsidy or some other mechanism we’re going to have to figure out the business model. That is why I said going direct is going to take some more years.
You are a provider of all the services, right?
As I told you, the health care is not a silo’d thing. You need a primary doctor, then a secondary doctor, a tertiary doctor. You need labs, you need prescriptions, you need medicines and then you get well. So, we want to help the person through the journey.
So, that’s why we cover everything; we cover all segments, and in each of them we have a lot of penetration. Let’s say for a clinic. We work with them to put them online. We work with them by giving them software, we’re giving them hardware, we do a lot of work with them. So it’s not only breadth, it’s also depth. This kind of an approach is very unique to India.
In other countries, a company like Practo does not exist, so we have the opportunity to take this to other countries. We’ve take in to the Philippines and Indonesia and it’s doing well there.
It has taken long to prove your model?
I started this out of college. So, you know the value of each dollar and I think this environment is a very good one because it will clear out a lot of noise and the signal will go through. So, it’s very difficult to focus when you’ve got so much going on, but now when the dust settles you’ll really see the picture. So, I think it’s a good cycle to go through and we’re very excited to be a part of it.
Real business models and real business will shine now and teams with the right intents will survive.
How far along have you come to integrating the acquired companies with yourself?
A lot of our work was done in primary care and secondary care, and tertiary with are hospitals. So, if you look at our acquisitions, Insta, Qikwell were all focused on tertiary care and we’re doing very well.
Thanks to these acquisitions, some of these businesses are benefitting from some of the other businesses that we already have. It’s sort of a network effect.
Has the cost of treatment reduced because of integration with you?
So, we do bring in a lot of price transparency in the system. For example — labs. We show what the price variations are pretty large. When you search for a test, you’ll see that that test will start at something as low as Rs 100, and somebody will charge thousands for it. That price transparency is very good, because the supply then looks at it and says how can I charge so much, or how can I charge so little? I think more than cost reduction, we want to bring in transparency.
We will provide you with choice, we will provide you an appointment right now; we will get medicines to your home. We’ll simplify ways for you to get healthy, so don’t get tensed.
Hopefully we’ll play a role in reducing the paranoia surrounding health, and one of them is around costs. So, we want to bring in transparency around costs.
Have doctors seen a growth in tertiary because of the work you’ve put into primary and secondary?
What happens is that we’ve increased the pie. It’s not like we’re redividing the pie. When you make something more convenient, people end up using it more. You know we’re doing 10 million searches a month and (many of) these searches result in a transaction. That way, primary, secondary, tertiary all started having good business and make it even more convenient for the consumer.
Will we see a fitness platform from Practo?
We definitely see ourselves playing a role in the wellness and fitness space. For us, it is prevention, we’re going to disrupt our cure. So it’s going to disrupt our main business, but it’s okay. We rather have people be healthy and have a lower valuation than have people who’re unhealthy and have a higher valuation. We care more about people.
But the interesting thing is preventive and wellness is the long term solution for healthcare and that’s what the world is going to go towards. So, we are definitely keen to take India there as well.
Would you look at developed markets at some point of time?
I think we have a lot of work ahead of us in India and other emerging markets. If we build this out, the world will for the first time see something come out of these countries that has never come out before. For the first time, we’ll see innovation from India that the world will say “we would like some of that”
So, the developing market provides us with the right kind of environment to foster this innovation and we want to show this innovation out. Developed markets whether we can replicate this or not is going to be a challenge, because insurance penetration is high, there are legacy systems built out years ago. So, I think it requires a very different strategy.
Do you work with insurance providers in India?
You’ll hear very soon about some partnerships that we’re doing with many of the leading players, where they’re very interested in providing preventive solutions. Also, as I told you earlier, the premiums will be lower if the patients take action earlier. So, if a person has a damaged ligament, the earlier he goes to the doctor, the degree of the tear will be reduced.
If he delays the recovery it’s going to take more time to get better and it’s going to cost more.
Insurance companies will be very happy if patients start booking appointments faster. They will collaborate with us on that.
Also, we have a product called Consult which helps people ask questions on the platform and get answers for it. So, insurance companies are very happy in the sense that, before people fall sick, please ask a question.
Is this going to be like WebMD?
WebMD provides a standard answer, but every person has a unique problem, something is unique about that person. So, we ask patients to ask questions on the platform, and 24 hours you’ll get a response from a qualified doctor. This way you would have taken an action for a problem that you would have otherwise ignored. These are some of the solutions insurance companies are very happy with.
Are you supporting vernacular languages?
Some of our products are already supporting vernacular languages. I’m sure in a particular time frame all products of Practo will be vernacular based, because we want to serve every Indian.
Apart from the top 100 cities, we’re seeing a lot of questions being asked on Consult from people in small towns because he doesn’t have access to great facilities and he can have his question answered by a top tier doctor and he need vernacular.