Ayu Health wants to be the trusted healthcare brand for average patients in India

Ayu Health | 26 Jul 2022

Speaking to Money Control, cofounder and CEO Himesh Joshi shared about how Ayu Health’s platform works, and his vision and plans for the company in the future. Here’s the summary from the article:

TLDR

What makes their services different from those of other private healthcare providers?

Ayu Health partners with existing hospitals, as they realised that there is no dearth of excellent doctors running good and even clinically best in class hospitals, but rather, it is the standalone nature of most of these hospitals which limits their potential. Key market characteristics include:

Excellent doctors running very good hospitals do not necessarily have the ability to make the hospital stand out, and make their brand compete in what is becoming a very crowded space
Most doctors ultimately want to set up their own hospital and nobody wants to do it outside of a tier-one city, leading to many good hospitals being limited to big cities

By partnering with these hospitals to build a branded chain and bringing in technology and scale that these standalone hospitals lacked, Ayu Health allows them to improve their top line by anywhere from 20% to 50%.

For instance, a standalone 100-bed hospital probably does not have the ability to create great technology to monitor patients. But through partnership, Ayu Health can give them demand, and the benefits of a large chain in terms of technology and scale at the backend, while still allowing them to run their day-to-day operations.

What are the key attributes of Ayu Health’s model?

Having recently started operations in the National Capitol region, Ayu Health’s model is very much the same as what they have done elsewhere, where they:

Identify a few hospitals run by high quality doctors to partner with them
Conduct a clinical audit before going in
Create a Network: Ayu Health’s principle is that there needs to be a hospital not more than 15 minutes away from any location where they already exist

Lastly, hospitals that Ayu Health works with tends to be strong in two or three specialties which happen to be the specialties of their founding doctors. For example, if a partnered hospital in an area of Delhi that is strong in cardiology and gynaecology, they will seek the next tie up with a hospital nearby that is strong in other specialties.

Is the asset-light model in healthcare going to work?

Himesh noted that the asset-heavy approach is not very scalable.

“There are only about six or seven truly national hospital brands in our country such as Apollo, Max, Fortis, Narayana and maybe a couple of others. Even for these Pan-India brands, each of them has maybe two or three centres that contribute more than 70-80 percent of their business. So even the big hospital brands are very heavily focused on one or two really large hospitals with huge traffic.”

Ayu Health’s model, meanwhile, is far easier to scale and manage as their focus is concentrated on a few key areas. For instance, ensuring good patient experience and pricing mechanism, fostering great relationships with suppliers of drugs and consumables so that their hospitals are able to get good prices, while leaving the day-to-day execution of placing an order for purchasing the medicine to the hospitals. By centralising the high impact, important processes while leaving the execution decentralised (done by the individual hospitals), this design works well to scale.

Making private healthcare more affordable

Affordability and transparency in healthcare are major challenges in India. There is great unpredictability in terms of what a certain treatment or procedure would cost and there is no concept of a rack rate in healthcare.

Ayu Health mitigates this by introducing fixed-price packages across their hospitals, whereby once the patient meets a doctor and the diagnosis is completed, a fixed-price package is provided for the procedure. This price will not change, irrespective of the number of days a patient stays in the hospital, granting patients peace of mind.

However, Ayu Health does not compromise clinical quality to keep prices cheap, but they do try to price themselves at a decent discount compared to larger chains. This is made possible by the nature of their partner hospitals, as they have relatively lower overheads and are typically doctor-run. With the doctors as decision makers, the hospitals have greater flexibility in charging more reasonably.

Vision for Ayu Health and the brand 5 years from now

Ayu Health wants to be a trusted healthcare brand. For the average patient, they do not have a hospital brand that they can trust.

“All of us know that Apollo or Fortis are great hospital groups, but only the top 2 percent are probably able to afford these hospitals. For the rest of the folks who can afford private care and want good quality, they don’t always necessarily know which is a good hospital that they should be going to.”

Ayu Health will be the brand of choice for the average patient, and aims to be the largest hospital chain in the next five years. More importantly, the patients’ trust in Ayu Health should reflect in the experience that the patients have in non-clinical as well as in clinical outcomes.