 "Health care Start-Ups see low levels of funding: KPMG")
“One of the fundamental problems of Africa is the low bandwidth and its cost. As Africa gets better bandwidth, the market will improve over a period of five years,” says Sunita Maheshwari, co-founder of Teleradiology Solutions. Her company provides tele-radiology solutions to patients, enabling them access better doctor services from even the remotest of locations.
Indian firms are looking at replicating their local success of offering low-cost medical services in many emerging markets of Africa, where people are looking at affordable access to health care. These companies have built a model of bringing down costs of services by increasing utilisation of devices and solutions. For instance, Teleradiology Solutions is developing solutions that work on lower bandwidth in Africa by lowering the number of images.
The bandwidth challenges these companies face in Africa is similar to that which they faced in India a decade ago. It is for this reason that Indian companies are at an advantage in serving African customers. The fact that the continent has been impenetrable for much of modern health care and diagnostic facilities is offering these companies a huge potential.
Teleradiology Solutions already has a presence in countries like Tanzania, Zimbabwe, Nigeria, Uganda, Djibouti and Ethiopia, makes about 20 per cent margins from Africa compared to about 30 per cent from the US and 5-7 per cent in India. Currently, about 85 per cent of the company’s business comes from the US and the rest from markets across the world, including Africa. Teleradiology aims to grow this to 15 per cent from Africa alone in the next five years.
“There is a unique bond between India and Africa in terms of comfort levels. Also, a lot of Africans had been coming to India for treatment over the past few years. Hence, it makes commercial sense for these Indian firms to set up centres in Africa,” says Navin Agrawal, partner and head, Africa corridor, KPMG in India.
According to a McKinsey report dated September, health care will be the fastest-growing category in Africa after financial services, hospitality and housing. The market is pegged to reach $49 billion by 2025, with a compounded annual growth rate of 4.3 per cent over the next decade. In addition, as the the technology wave is rapidly sweeping consumer behaviour there is an increasing demand for discretionary spending that includes health care.
The report says that cellular-enabled machine-to-machine connections are expected to grow by around 25 per cent per year to 30 million by 2020 in sub-Saharan Africa. While technology penetration is improving in the country with markets in east Africa such as Rwanda and Uganda leading the way, the problem lies in the utilisation.
“The number of users with handheld smartphone devices is quite high and therefore, the opportunity for tech-enabled services to help people is quite high. However, the application of technology for health care reform is very poor. We need more tech-enabled health care companies to reach the poorer segments of the population in Africa and not just the affluent population,” says Adil Agarwal, chief executive officer of Dr Agarwal’s group of eye hospitals. Of the group’s 70 centres across the globe, around 15 are in Africa. The continent contributes about one-third of Dr Agarwal’s revenues and the group is expecting its African business to grow at 30 per cent, year on year. The hospital group has plans to add around five centres across the continent by the end of financial year 2018.
Pathology and diagnostics chain Metropolis, which has three of its six international markets in Africa, is another company in the health care sector that is exploring growth here. The firm, which had exited from South Africa in August citing lack of growth and regulatory hurdles, has a presence in countries like Kenya, Ghana, Zambia and Mauritius. Metropolis works on a hub-and-spoke model — one lab connects 10 collection centres in an area. Skill upgradation and training of local professionals, including both doctors and paramedic staff, are key challenges that Indian firms are addressing in Africa. Most of these health care providers end up training medical professionals to bridge the gap. However, the cost of these professionals in Africa is much higher than India.
For instance, according to a recent Bloomberg report, nurses in Kenya earn about $400 (Rs 28,000) a month, citing Kenya Nurses Union statistics. In India, the average salary of nurses varies anywhere between Rs 2,500 and Rs 6,000 ($36-$88) a month. Scarcity of available medical practitioners coupled with lack of government focus on health care over the years have contributed to this. However, things are changing now. “Of the 55 countries in the continent, almost two-thirds are now setting aside huge amounts to provide health care. Also, a lot of funds are coming into the sector,” adds Agrawal.
