People who saw it through

HEALTHCARE: Seven professionals come together to bring super-specialty eye-care to India.

Multi and super specialty chains of private hospitals have changed the landscape of Indian healthcare delivery, especially in north India. We've had super-specialty tertiary care for cardiology, oncology, neurology and even bone and spine injury.

Joining the ranks now is a super-specialty hospital chain in eye-care "" Eye-Q "" a concept brought together by seven individuals with a common aim "" to tap the growing organised healthcare sector in the country.

With a planned investment of Rs 240 crore in 30 eye hospitals and 70 affiliated centres over the next five years, the Eye-Q model is the first of its kind in the region. The chain will follow the hub-and-spoke model targeting district headquarters in north India.

Having already started a hub in Gurgaon and a spoke in Rewari, the promoters of the chain are looking at opening two more hospitals by September this year and have on board five doctors from AIIMS and two from LV Prasad Eye Institute.

The promoters claim that with Eye-Q, not only will they bring profit value to the eye-care segment, but will also take forward the trend started by corporate hospitals.

But the big question is that with enormous charitable activity in the eye-care segment and existing government-run centres of excellence like AIIMS, Guru Teg Bahadur Hospital and Guru Nanak Eye Centre in Delhi, can the Eye-Q model sustain? And more importantly, will people trust a new private set-up when reputed ones like Shroff Charity Eye Hospitals have already expanded from Delhi into Gurgaon, Rewari and Alwar?

A look at the eye-care market rings in optimism "" 4.5 million cataract operations are conducted every year, a number growing at a rate of five per cent per annum. Of these, 25 per cent are done through phaco technology, which too is witnessing a growth of 30 per cent per annum. And the growing incidence of diabetes is also creating a pool of patients suffering from diabetic retinopathy.

However, even under the current scope of activity, the reach in smaller towns is limited, with most patients having to travel to metros like Delhi for major operations.

In a bid to attract this rural market with quality eye-care at low costs, Eye-Q promoters, Ajay Sharma and Rajat Goel insist that despite all setbacks, the venture will prove to be profitable "" for the patients and investors.

Sharma, who also runs an eye centre in Gurgaon, reveals their strategy, "Our focus will be on setting up hospitals in district centres to target those who can't afford to make a trip to Delhi or any other major metro for their eye check-up or operation. So, we don't intend to open in any of the metros."

Agrees Goel, who brings with him 16 years' experience in the eye-care, "Since our hospitals will be located in small towns, our expenses will be lower and volume will be higher. In fact, each of our projects will break even within three years," he promises.

Yet, Rishi Mohan of MM Eyetech, a well-known private eye-care clinic and institute in Delhi, believes that despite the general perception of eye-care being a lucurative business, unless the model is semi-charitable, it might not work.

"A profit-making business model for eye-care is unlikely to succeed because in India people can get eye treatment at almost no cost. You'll notice that this is the reason why most large healthcare companies don't invest heavily in eye-care." Despite this, Mohan is a consultant at the Fortis Hospital in Delhi "" an understanding under which Fortis patients are directed to MM Eyetech for tests and operations.

Dilpreet Brar, chief administrator at Max Super Specialty Hospital and Max eye-care Centre agrees, "A stand-alone chain for eye-care is not a very good idea because the investment in equipment and intensive care units is very high while the returns are very low."

She explains that for a large set-up like Max, the back-up for patients is available at the super-specialty hospital while the clinic is primarily a diagnostic centre. On comparison, this might hold true.

While a cardiac surgery rakes in close to Rs 3 lakh, a cataract procedure earns only Rs 25,000-30,000. The fact that south India based chain Aravind Eye Hospitals is also modeled as a private charitable trust, makes Eye-Q an unprecedented experiment.

However, S Aravind, administrator at the Aravind Eye Hospital and Institute, Madurai, is of a different opinion. "It is true that we cannot overlook the value and trust held by private organisations that have existed for generations but when you look at the big picture, their role is miniscule. If private ownership was a hurdle, why would people go to a Fortis, Max or Wockhardt?"

He goes on to explain that Eye-Q, which targets the middle and lower income groups and not the top of the pyramid is most likely to be successful. Most of the focus in the country revolves around treating and operating cataract, a major cause of blindness.

But with almost 40 per cent of the blindness caused by factors other than cataract, there is a huge need and market waiting to be addressed and "there is enough room for many more such set-ups."

Goel nods in affirmation, "We are hoping for an overall break-even in 6.2 years with an post tax internal return rate of 32 per cent. We opened our hospital in Rewari a month ago, expecting 30 patients a day, but are already seeing 60 patients daily."

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THE EYE-CARE MARKET

For every million population, there are 8,000-10,000 cataract surgeries

In India 4.5 million cataract operations take place every year, growing by 5per cent pa

Every fourth person with diabetes contracts diabetic retinopathy, a largely undiagnosed problem

1,00,000 lasic procedures for spectacle removal, growing at 30 per cent CAGR. One million contact lense users growing by 15per cent pa

Almost 60 per cent of the blindness is caused by cataract, the rest is due to other eye problems