Siddhartha Ahluwalia 01:15

Hi, this is Siddhartha Ahluwalia, welcome to the NEON show. Today I have with me Meena Ganesh, founder of Portea. Portea is the largest platform in India for delivering healthcare services at home.

India today is a $4 trillion economy, the fifth largest in the world, but healthcare infra in India is still not among the top 20 countries amongst the world. So in today’s podcast, we are going to discuss about the healthcare infra of India, you know, where has India leapfrogged in terms of healthcare in the last 10-20 years, and what is still lacking in India. Meena ma’am, so glad to have you on the podcast today. Thank you for coming.

Meena Ganesh 01:51

Thank you, Siddharth, my pleasure entirely.

Siddhartha Ahluwalia 01:54

Ma’am, India is the only place in the world, you know, where there is history of doctors get beaten up by the relatives of the deceased. We hear that daily in newspapers, right? Healthcare is one of the reasons that poor remain in debt.

And overall, you know, for a population of 1.5 billion, we only have 1.5 million doctors. Though India has produced almost the stat is between 3 million to 5 million doctors MBBS, but majority of them in the last 50 years have left India for better opportunities in US, UK, Australia, and now even Middle East. So how have you seen the change in healthcare in India since you started Portea?

Meena Ganesh 02:37

I started Portea in the year 2013 after I exited from TutorVista and I was looking at what should be the next new industry or where do I see disruption to be brought about? And that led to the start of Portea in 2013. Now, before that, I’ve always been a consumer of healthcare, and I obviously have been, and also it is an area of great passion for me.

I’ve always read and tracked what happens in the healthcare industry. In the last 13 years, 14 years, I’ve seen a lot of transformation in the healthcare space. Specifically, in fact, in 2013, even when I decided to get into the space, I saw that there was a lot of investments that were happening in the facility-based care.

And over the last little more than a decade, that has continued. There’s been a lot of new, very good hospitals, the quality of infrastructure in the hospitals, the quality of care in the hospitals, the kind of technology that’s being used, global technology, whatever is the latest and cutting edge is there in India. It’s somewhere or the other.

And people from all over the globe come to India to get a lot of their surgeries and specialized procedures done. So India has become a destination for high quality healthcare at the top end. And two interesting things is that you can get the healthcare by paying for it.

And you can get it within a time frame, which is acceptable to you. Unlike many countries, where you have to wait for months to get an MRI, to get a scan done, to get a knee replacement, it’s months or years before you can get access to that. In India, you can, provided you pay for it.

And if you pay for it, you get very good quality healthcare as well. So that’s an interesting transformation that I have seen over the last decade plus in a higher end specialized, secondary, tertiary, quaternary, specialized care. Absolutely no doubt that we have gone up the value chain on that.

What I’ve also found is that over the last decade, a lot of new forms of healthcare have come in. And we have pioneers, as you know, Portia has pioneered one such, which is outside of hospital healthcare. Because care or recovery is not something that can happen in a hospital.

You can carry out procedures in a hospital, but the recovery and the healing has to happen at home. Healing has to happen continuously. And there is a continuum of care which has to be provided, and that was completely lacking in this country.

And that is what led us to the thesis that there is a need to create such an infrastructure in the country. And we are very pleased to see that that has now become the norm. Most hospitals, most doctors now recommend that you use a home care company to take care of yourself, either if it’s a chronic and debilitating kind of situation, which needs continuous care, or you need an elder who needs to be taken care of continuously, or you’re just recovering from something, maybe a surgery or some disease that needs continuous nursing or supportive care.

But interesting also, higher-end care has been brought into the homes. For instance, we do a lot of ICU setups at home. The patients who are in an ICU in a hospital, but are now hemodynamically stable, they don’t need continuous monitoring, or they need continuous monitoring, but they don’t need to be in the hospital to be monitored.

Then that whole setup can be created at home. So we create an entire ICU setup at home with the right kind of equipment, emergency trained L3 level nurses, with remote monitoring by senior emergency physicians. So a lot of transformation has happened in that sector.

And then, of course, the third aspect of change that has happened is all about the digital transformation, the healthcare with the teleconsultation, the delivery of services, delivery of pharma at home, e-pharmacy, and so on. So the lot of the digital, I know that we’re going to be discussing further. So I’m just going to pause on that.

Siddhartha Ahluwalia 06:53

And, you know, India has seen many great healthcare companies emerge, especially in the technology space, one of them being Portea. But overall, I also…my first company that I started was a B2B healthcare company, it was a CRM for pediatricians. I was disappointed starting healthcare in India, like starting a company in healthcare in India.

The reason being, there were a lot of things that had to happen, like doctors adopting technology, doctors adopting electronic medical records, which never happened at scale. Still, India is in early adoption. Also, what happened is the torchbearers from tech in healthcare in India, like Practo, Pharmeasy, 1MG, all these companies were supposed to be the scale of Zomato, Swiggy today.

And we see India as a market, though healthcare is a problem, these companies have not been able to reach that scale. Zomato is a $20 billion company, Swiggy is a $10 billion company, and all these companies, right, combined are $1 or $2 billion. So is this that the mass of India hasn’t adopted, like they want more food delivery and less of medicine delivery at home?

Is that true? Do they don’t want…They are not asking their doctors for e-prescriptions, they are asking…the mass of India is not asking doctors for more convenience using technology. Is that the reason why none of these companies have taken off?

And there is only one company in India, which is probably a healthcare unicorn, which is Pristyn Care. So why haven’t you seen the scale in healthcare in India yet?

Meena Ganesh 08:53

So firstly, let me say that we should look at healthcare more broadly and not just look at healthcare from the technology lens. So if you look at healthcare as such, and if you look at the hospital provider, there are some very large listed entities today, and they are growing and they’re doing very well with great market caps. It is a PE-supported industry, whether you look at the Max Group or Apollo or Manipal, while it is not listed, we know that they are doing exceedingly well and the number of beds that they have added up through acquisitions, they are nearly as big as Apollo now.

So there are some very large providers which are growing. The diagnostic companies have also grown and many of them are listed. So in my view, healthcare is a patient capital.

Healthcare is long duration. Healthcare is not a rocket ship. Healthcare grows, becomes steady, and then continue to provide dividends, that kind of an industry.

And the kind of capital that needs to go after it is more the PE rather than necessarily the VC. Now that said, there might be some categories that might break out of that and get there. And we are still hopeful that that may happen.

But globally also, and it’s not an Indian phenomenon, healthcare is always slow and steady and then continue to provide returns for life. So we have to understand that that’s the lens from which we need to look at any investments in the healthcare space. There are very few examples, whether in India or elsewhere, where there would be a medtech company which has taken off and has become very, very large.

It may happen and there may be a few. Another area, another space where this might, you might see a sudden transformation is in pharma. Somebody hits upon a new product which they have invented, and that’s just curing cancer and the whole world wants it, then it can take off.

Otherwise, all of these are large, slow, large, and sustainable plays. And that’s how we need to look at it. Different context, we need to talk about, how does one help with the absorption of technology in the healthcare sector? And we can get to that question if you’re ready for that.

Siddhartha Ahluwalia 11:16

Yes, so I would like to get to that question. Also, I would like to ask you, if an entrepreneur who wants to start in healthcare, it’s not possible for everyone to build a hospital. So what are the opportunities then for entrepreneurs in healthcare?

Meena Ganesh 11:31

So, and you’re absolutely right. Not everybody needs to build a hospital and Portea has not built a hospital. But the point is that you have to build something which is going to be, it’s not a similar play to like an e-commerce play, where you take rocket fuel in the form of VC money, you put boosters and it’s just going to take off.

And either it goes all the way and gets to escape velocity, or it falls down and fails. That is not the approach that you can use for healthcare. A couple of reasons for that.

For one, healthcare is, and especially if you’re looking at using technology to treat or to solve a patient’s problem, that requires a lot of time to really let it do the research around it, to do enough of testing, to get approvals, FDA, CE marks, etc. It is a journey. Unlike you, like if I get 100 people who like my product, I’m D2C, I start selling it to you, I just keep on cranking it up, I spend a lot of money, I discount it, you will take it.

You’re not going to take a medical device or a medical product just because I discount and it’s cheap for you. Are you going to consume more medications because it’s cheaper?

Siddhartha Ahluwalia 12:44

No.

Meena Ganesh 12:46

Exactly. So, this is not a category where we can say, okay, let’s put a lot of money, let’s just put the fuel in it and it’ll take off and somewhere it’s going to land up. It is a slow burn, you need enough time to try out the product, make it work, make sure that it is safe and it is effective and then you can start to build it up at the pace at which it can take.

There are two, three things which perhaps come in the way of very, very fast adoption. One is you take healthcare when you need to, not because you like to. Only when you don’t have a choice, you take healthcare, consume it in whichever form, whether you’re taking a doctor consultation or unlike ice cream, you really want to take it whether you need it or not, you’re going to take it.

It’s not going to happen over here. So, there has to be really a strong reason to use. Two, changing a brand is very, very difficult.

It’s difficult to move people from one brand to the other, be it a doctor, be it a hospital, be it a healthcare provider like Portea. It is something that requires a lot of effort to move people from one brand to the other because the loyalty factor is very high. In fact, that’s one of the reasons why right up front when we started Portea, we spent a lot of time aligning with the ecosystem healthcare providers to make sure that we are seen as a credible player.

Our brand gets attached to some of the larger hospital players and then we did our own ATL campaign so that everybody knew about Portea. Portea was equal to healthcare at home and that was something that we created in the minds of people. And the good thing was there was no other brand sitting there.

So, we could be the first one to occupy that space. But having occupied that space, it is a little challenging for somebody else to come in and dislodge an existing brand. So, that is the second thing.

Third is in healthcare, there are different kinds of… the player…The whole system is very complex. I take healthcare, someone else pays for me, either my family member or I pay, but maybe it’s my insurance that is paying.

An employer will pay for the healthcare but the consumption will be by the employees and the provider will be a hospital. There are so many different… It’s not a simple thing.

I sell you a product, I take the money from you and you’re all happy. Or I just list it on Amazon and you buy it and I get the money. It’s not a straightforward conversation.

There are so many different complexities involved in this. And you have to convince many, many parts of the whole ecosystem to absorb technology and to use it. So, that also makes it challenging for technology to get into the healthcare space and move quickly.

Siddhartha Ahluwalia 15:31

What are the opportunities right now for entrepreneurs to build a long-lasting company in healthcare in India? As you have seen, technology is not the answer to everything.

Meena Ganesh 15:40

A technology-based product, offering… I started to say product but I moved away from that. It may not be a product, it can be a service.

It should be something which is very meaningful and something that people really want to take. It makes a difference in their lives and they’re willing to pay for it. These are the things that for any business that is what is required and that’s the same thing for healthcare.

There are still lots and lots of opportunities to create such kind of solutions in India. The challenge is that if we think of it as something which is a quick and dirty, let me throw something together and this is going to take off. That’s not the approach that you can take.

If you’re patient and you pick a problem, there are a lot of places that you can go with that. For instance, you look at the cancer care. Cancer care is such a huge problem, I mean huge dimension.

There are multiple dimensions to cancer care starting from diagnosis and diagnosis not just once some symptoms are there but early diagnosis, finding the risk, prevention by knowing where the risks are. All of that can be managed…There’s a lot of technology that can be used in this and that technology can be taken to the right people at the right time so that people are prevented from getting cancer. Of course, the holy grail is always still EMR. But today with generative AI, you might actually be able to overcome a lot of barriers that are there currently. Now, what is the barrier for a doctor to fill in an EMR? I mean, what’s the point? And you and I are having a consultation and you’re looking away doing this.

You’re not giving me eye contact. I’m why am I sitting in front of you, right? That’s a real big problem.

And I think doctors, a lot of good doctors dislike that. And that’s one of the reasons why the uptake of EMR also tends to be difficult. Also, the interoperability of their existing systems.

What do you get in a new EMR into the whole mix? Then how will that interact with a lot of other things? How will the database be maintained?

There are so many problems. But potentially, for instance, with generative AI, you could solve a lot of that problem. You and I are having a conversation.

I’m the doctor. You’re my patient. The generative AI tool can pick up that conversation, convert that into a transcription, into an EMR, populate the data, actually do the codification of whatever diagnoses I have determined.

And I can just speak that out. It can capture that. And it can do a lot of that, all the grunt work and all the difficult pieces for which multiple systems are being put in place.

Potentially, there could be a solution that can come out of that. And that’s an area that I would definitely feel that there is an opportunity. The third is that even today, and of course, in treatment and beyond treatment, there’s lots to be done.

But in the prevention, there is still a huge amount of opportunity that is right there, which is missing. So even coming back to cancer, what is it that causes cancer? There are a lot of, of course, there are some genetics which you cannot do anything with.

If your family, there is a family history of breast cancer, you need to be watching out and there’s a high likelihood. But there are many things that you can do as an individual to reduce your risk for cancer, different kinds of cancer. How do you propagate that information?

How do you get people down the line? See, it’s perhaps you and I sitting in an urban setting, getting a reasonably good amount of content on health and wellness, we are probably quite aware. But when you go into the deep interior, and through my foundation, I’m doing a lot of work there.

There is not much of health-seeking behavior in places where there is a day-to-day struggle just to make a good existence. The last thing you’re thinking about health is health-seeking behavior. But even there, with the right kind of inputs being given, people are willing to change.

And that has been my experience in the work that I’ve been doing over the last three, four years, that if you go into the communities or tribal communities, tell them what is it that’s likely to be the outcome with this kind of behavior, and how can you prevent cancer or other chronic diseases by taking these few steps, people are willing to listen to that. And we have created a program called a Community Healthcare Entrepreneur, where we have taken women from the community, trained them on certain basic healthcare testing, healthcare, primary healthcare, and chronic disease diagnostics, giving them now inputs on early detection or early risk identification for different kinds of cancer. And as they go back into their communities and start to spread that message, we are starting to see some transformation.

And that’s completely technology-driven, because they’ve got a tool in their hand, a point-of-care device through which they do the testing. We are giving them an app through which they capture the data. The app can tell them whether the patient needs to do some action, or the beneficiary, I shouldn’t even call them the patient, they’re just being tested.

Does the beneficiary need to do some action, or they’re okay, or they need to be monitored at this frequent interval? So you can actually transform a lot of things in the healthcare system today by going for something which is truly service-oriented and making a difference in people’s lives. If you’re looking for a shiny gizmo which will take off like that, this is not the space for that.

Siddhartha Ahluwalia 21:07

And I think the ideal length to build a sustainable company in healthcare therefore would be 20 years, at least 15 years.

Meena Ganesh 21:14

I would say yes, 10 years plus. You need to be patient, you can’t say that. And that’s where the VC issue comes in.

You see, you being a VC yourself, you know that you need to return the money in five, seven years. People will start asking you, the GPs will say, the LPs will ask you, where is my money? Give me my return, give me some exits.

So that puts pressure on the company to grow very rapidly, to get the next round, rather than find a way to make it sustainable and meaningful. That…So there is a slight, I would say, misalignment over there. That said, it’s not that it’s impossible.

There are enough of good VCs who are willing to wait it out and who believe that healthcare is the place that they want to be investing in. That’s their mandate. It is something which is definitely looking.

Now, you can do healthcare investment, health tech investment, not at the treatment end, but maybe at the efficiency and making hospitals more customer-friendly, easier for patient journeys. Those are things which probably can move faster. But anything which is for therapeutic use, anything which is for even wellness, it requires a little longer for transformation.

Siddhartha Ahluwalia 22:32

Or maybe there requires a different kind of investors in VC. When they know that the ultimate outcome is like the mass can benefit in India through improved healthcare. The patient capital can be like more than 10 years. Can be 15 years. In those cases. And is it true that healthcare in India is built on low margins, high volumes?

Meena Ganesh 22:56

See, if you look at who is paying for the healthcare, that itself is a problem that we need to solve. If an individual is paying for healthcare, and which is the case with 60 to 70% of healthcare in this country. Firstly, most of the insurers are still only, and including the government insurance scheme, they’re all focused only on hospitalization.

So the continuous care, people have to pay out of their pocket. So what happens that people avoid going for primary care, and you self-medicate and all that. And so you stay away from hospitals till there’s no other choice.

So that slightly misaligned payer and beneficiary relationship leads to behaviors which perhaps lead to the problems becoming worse before it comes to a formal healthcare system. So that’s one big problem that we continue to see. And the other problem is, like I said, it’s a very complex system in India.

Very, very…the number of very small…large number of very small clinics and individual practitioners and hospitals. There are so many of those, that they are not economically large enough to get into the viability at the early stage. So they are all working with very small ticket sizes, small margins, trying to make themselves just about keep their head above water.

So this is a very large number of small players doing small ticket size things. So that naturally, that becomes the base for your healthcare. And most of the people, some of us who are in a city like Bangalore, we have access to probably the big hospital chains, and we go any pay.. we can afford to go and pay, without thinking, a thousand rupees for a consultation.

A lot of people will look at the 200, 300 rupee doctors. That’s where they want to go, who will also in that same 300 rupees, give them some medicines, so that you feel better and you’re happy and you’ll refer your neighbor also to go, that 200 rupees, I feel fine after that. So that’s the bulk of the healthcare that is there in this country.

So that leads to a large volumes, small margins, definitely as the bulk and the majority. Now that said, that’s not all. Now, if you move away from there and you look at the larger hospitals and the more complex problem solving situation, those margins are good.

And they’re bringing in top of the line medical equipment from abroad and all over the country, all of the world to India to bear on that. And there, the margins are very good. So it’s really, as you know, India has got both the sides and everything.

There’s a large mass of people who access healthcare at small ticket sizes and margins. Then there are the, you can do a heart and lung transplant and massive, you pay 50 lakhs, a crore rupees to get your heart and lung transformed, huge margins there. So it’s a combination of the two.

Siddhartha Ahluwalia 26:15

And what are the current cities that Portea is in?

Meena Ganesh 26:19

We are physically present in about 20 cities and we cover another 40 other cities through services.

Siddhartha Ahluwalia 26:27

Through partners?

Meena Ganesh 26:28

No, not partners, but we have our individuals, consultants and so on who work there.

Yeah, through a hub and spoke model, we manage the others. So we don’t have our physical presence there as office, but we have our healthcare workers there who provide the services.

Siddhartha Ahluwalia 26:47

So right now, the majority of the adoption is from Portea, is from tier one cities like Bangalore or the tier two cities are also responding?

Meena Ganesh 26:56

Tier one and tier two. That said, like I said, we are in the top 20 cities. Out of that, I would say the top 16 cities are great. The other four are still coming up and so on. That is how it is.

Siddhartha Ahluwalia 27:07

And this is in general nature, the adoption of Portea is by cities’ potential to spend or is there some other factor also that comes into play?

Meena Ganesh 27:19

The way we look at it is we see where the hospitals are. So the moment a good hospital goes into a city, the overall health-seeking behavior of that city goes up and people are willing to take good quality healthcare and supportive care. So then it’s worthwhile going after that from an outside of hospital care.

So I’ll say this, that because we work with a lot of pharma companies, on behalf of the pharma companies, we end up working in a number of different cities. So the additional 40 cities that we’ve gone into, we do a lot of support services on behalf of those pharma companies.

For instance, we have a physiotherapist in all these 40 locations. And we… So what happens is a patient gets a drug from a pharma company. Now for the drug to really work well, they also need say a supportive care like physiotherapy.

So then we provide the physiotherapy for them. Now we work with insurance companies such as ICICI Lombard, et cetera. Their patients come from all over.

They need us to do continuous care post-discharge. They want physiotherapy to be carried out for the patient. Then we provide that.

Or if they need, we do a lot of nursing care injections at various locations or supportive care for elders. So those are some things. So long as this is getting paid through a different channel, right?

So the willingness to pay for the services out of your own pocket in a very small tier three is still a little suspected, still growing.

Siddhartha Ahluwalia 28:55

So in these cases, you would look to tie up with a large hospital where the insurance might be the payer or a pharma company might be a payer?

Meena Ganesh 29:02

That’s correct. Pharma and insurance, the tie-up is not necessarily with the hospital. The tie-up would really be with the insurance company itself. And they will tell us that these patients who got discharged from these hospitals need these services, go and do it.

And it’s cashless or reimbursement, mostly cashless.

Siddhartha Ahluwalia 29:20

And what’s the advantage of these insurance companies? Because giving money from their pocket to Portea would increase their own bills.

Meena Ganesh 29:27

Otherwise the patient needs to go back to the hospital to get the service. The care package is a combination of say a surgery followed by 10 sessions of physiotherapy for the patient to recover. So either they go back to the hospital and pay a little extra for that or it comes to their home. So that is still part of the overall package. So it’s not incremental to the package. It’s part of the package.

Siddhartha Ahluwalia 29:53

And what has worked for Portea that today you are a profitable company that other healthcare ventures, be it tech or non-tech, both can learn from?

Meena Ganesh 30:01

See, the thing is that at some stage you have to realize that this business is something which requires to make money. So once you reorient yourself, then you start to figure out what to do. So we’ve used a lot of technology at every layer because from day one, we said that what we need to build should be scalable.

We should be able to manage it well through technology because a lot of our workers are remote workers. As in, you get up in the morning and you go and do your service in the patient’s home. You’re not coming to a central hub and nobody’s monitoring you on a day-to-day basis.

So many of them are remote workers. So I need to have a way of managing them, the quality of care that they provide. And third is that the data that we need to collect out of all this, we need to have a system which does that right up front.

So the investment in technology that we did from day one has helped us to make sure that we are scaling, we have good quality and our layers of management are limited. Now, so what that does is that then right up front, your gross margins start to look better because you’ve built in thin layers of management and you’re not trying to… See what happens otherwise in a healthcare in a facility, you see there’s so many people who are, it’s just filled with people who are managing people, who are managing people. If you want to avoid doing that then you have to bring in technology at every layer, so which we try to do that upfront. The other thing is that because from day one we invested in capturing data of the patient, for us to be able to project what’s going to happen, to be able to predict who’s going to need what, to know that somebody gets, takes this particular service are likely to require this additional service, those things become much more apparent.

There’s a lot of data that we collect and that gives us the trends that really help us increase the lifetime revenues that we can get, lifetime values that we get from the patients.

Siddhartha Ahluwalia 32:02

And how many today health care workers would be full-time associated with Portea today, who are responsible for delivery?

Meena Ganesh 32:09

Yeah, we have about 2500 people.

Siddhartha Ahluwalia 32:11

And there are few challenges that I believe there are in India right now. The first is building a medical hospital and institution for training new doctors is really tough in India.

And each medical school has only a limited number of seats which can’t be scaled. So even opening up new AIIMS or new government institutions is not the solution. Then what according to you is the solution?

Because health care, if we are not increasing and not training new doctors at the speed that the country needs, we can’t always have the ratio of 1 to 1000. And we should not aspire to have this ratio always. But our population is increasing, right?

Maybe soon we’ll hit 2 billion population mark. And the other is for the tertiary services, when people see, you know, roles in technology, why would a person want to become a phlebotomist or the physiotherapist, right? When there are attractive roles available, because the economy is growing.

There are manufacturing roles coming up. India is becoming a manufacturing hub. It has been an IT services hub. So do you see these challenges?

Meena Ganesh 33:28

No, so there is the challenge of manpower in the health care sector is not new. It’s been there for a long time and probably will remain. So there is no silver bullet that is going to change that. Okay?

You have to make it attractive. You have to make it a career of choice for people. Those things are something which need to be invested in and that will take time.

And it’s a continuous process. Now that said, there are many things that we can do to improve the efficiency and the effectiveness of the population that we already have. That’s where technology comes in hugely.

For instance, like I said, if you can support the doctors with the Gen-AI co-pilot or something which does the transcription, EMR and all that, it takes away a lot. If you can provide them with the past data of the patient in a very clean and clear manner so that they can quickly take decisions, that’s something that can help. Diagnosis is a big place where healthcare technology is making a big difference.

If you look at radiology, suddenly the requirement for radiologists can actually go down with the way AI and machine learning can be used to just interpret the x-rays and interpret all different kinds of radiology outputs that come, CT scans and MRI scans. And you put technology on that, the ability for them to detect the abnormalities is so much better than perhaps what a human eye can catch. So, it really is something that can actually reduce the requirement of radiologists and we can increase the…get people to go into other forms or other specializations rather than going to this.

So, that’s one way of using technology to support the improvement of the efficiency of people, etc. The other is give more into the hands of the individual. So, we as individuals, can we do a better job of caring for ourselves?

The problem comes in if you have a chronic disease or if you’re not taking enough of your primary care or you’re not looking after your preventive wellness, then things become that much more difficult. So, how do you put more into the hands of individuals so that your self-care can become better? And then third thing is that can you create new carders of the technical staff also?

For instance, nurse practitioners. In the US, there is that category of nurse practitioners are pretty much like doctors. They do all the primary care prescriptions.

They are permitted to do that. We don’t have that. Either the nurse and in many cases, nurses are much more capable than a newly formed, newly minted doctor because of all the experience that they’ve had, but they’re not permitted to say anything or do anything.

Can you create, in the…especially in the rural community, can you create like what we are doing with the community health care entrepreneurs? They are taking the burden of the primary care away from the public health system, taking it into the communities. Communities are paying very small amounts.

These people are getting employment or these people are getting a livelihood. Patients are getting care and they are brought in into the formal system just at the right time. So, there are so many different models that we can use to see how the fewer people that we have can go a much longer way and can be used in a much more effective way.

So, we have to look at all of these different ways to make it work. The other point is that in terms of increasing the capacity or the number of doctors that exist in this country, I think the government has been doing a lot of work to create new hospitals or giving permission for new medical colleges to come in. It’s a matter of time.

It takes a few years. Improving health care in this country is not just something that the government can alone do. It has to be a public-private partnership.

It has to be that the private entities and the government come together and come with solutions. That’s the only way we can take care of this kind of scale of challenge that exists in this country. And I think the government is also quite cognizant of that and is working from that perspective.

Siddhartha Ahluwalia 37:44

So I was seeing the time it took the government to let’s say adopt UPI and roll out bank accounts for the common people. It will take much more time for the government to get, let’s say, people on various government schemes or enrolled into the UPI version of…

Meena Ganesh 38:10

So there is, see the government has come up with the Ayushman Bharat Digital Health Mission, which is working on exactly this. How do you create a common platform, a digital platform on which the entire database of all the people’s health care, all their health care database is present? Every individual gets an ABHA number, through which their..and that becomes ABHA your unique health identifier through which all the data of all the people who… but everybody needs to have an interoperability with the core infrastructure that the government is building.

And I think they’ve created a lot of sandboxes and various people are trialing. So, this is a… it’s a journey. UPI took a decade.

This is probably also going to take that much of time. But all the learning that went through in the previous ones, as they get used over here, I’m hopeful that things will move faster.

Siddhartha Ahluwalia 39:06

But I’m not able to see the adoption of ABHA, let’s say, if I’m going to a hospital. Nobody is asking me what’s my ABHA number.

Meena Ganesh 39:12

Not yet. Yeah. So, it’s still some way away from getting more popular.

But at the ground level, where you see when you go into a government health care system, there is an ABHA number is becoming quite critical. And without that, they won’t register.

Siddhartha Ahluwalia 39:28

And the poor people are registering.

Meena Ganesh 39:30

They are. They are, Yeah, many of them are. And especially if you want to use the PMJJY the insurances, you have to have an ABHA number.

So, at least at one level, it’s starting to gain some momentum.

Siddhartha Ahluwalia 39:44

Got it. And I want to talk about some data right now. Let’s say the pharmaceutical industry. India is the third largest pharmaceutical market globally by volume, and the 14th largest by value globally.

And it’s estimated to be more than $40 billion with significant contribution to global generic drugs market. But the practices in the pharma industry are still age old. What’s your understanding being closely in this, right? Where is India pharma at? What are the strengths? What are the weaknesses still, right? The system of commissioning doctors is still rampant today in spite of all the efforts.

Meena Ganesh 40:30

I don’t know. I work very closely with the pharma industry, and I sit on the board of one of them as well. I think there’s a huge amount of transformation that has happened.

Definitely, the multinational pharma companies are completely away from any kind of kickbacks to doctors that has completely stopped. Even to the extent that you can’t even pay a doctor to go to attend one of your training sessions in a different city or a different country, you cannot. You can’t even pay them their airfare.

So the doctor has to be willing to go to another city to attend, which is quite draconian, because that seems like a legitimate thing. I want, if I’m launching a new product or a new platform technology, I need 100 doctors to come and study that. Otherwise, how are they going to use it, but even that.

So I actually feel that a lot has changed in the pharma sector. One is just the ethical standards have certainly improved a lot. There are two, three things.

One is pharma’s pitching to the doctors has become much more science-based rather than relationship-based.

Siddhartha Ahluwalia 41:39

Or incentive-based.

Meena Ganesh 41:40

Yeah. So that’s changing quite a bit. Secondly, pharma companies are not supposed to directly reach out to the patients.

And that is something that they are following very, very strictly, including even some of the Indian pharma companies that we work with. We find that they are following those principles. They are, however, providing other support services to the patients so that the products that they are consuming, either medical devices or medicines that they’re consuming, are useful for them and they’re able to afford it.

So there is…So from ethical practices and the way they’re reaching out, I feel that there’s a significant amount of change. What has also changed in my view, and again for the positive, is that there’s a lot more of products that are being generated in India. And the make in India has really pushed, lot of new products are being either generics that are copies, if I may want to, I’m sure the pharma companies won’t like me to call it, but copies of patented molecules which are out of patent.

Those are getting created over here. That’s fine. Or they are inventing new ones.

I see a lot more of real big growth that is coming in, good work that’s getting done in India. Because there will always be situations where you see some malpractices etc. that happens and that I think is something that we have to keep looking out for and preventing that from happening.

But I see a sea change in the last 10 years, big change in the pharma industries in India.

Siddhartha Ahluwalia 43:26

And what are the top three or four of those changes are in the last 10 years?

Meena Ganesh 43:31

So one is ethical standards have improved. Two, the kind of R&D work that’s going on here has become better. Three, they are bringing in newer and newer products from across the globe and pricing it at Indian standards for Indian patients so that we can get access to the latest and greatest.

The other thing is that they’re coming up with new science-based ways to reach to the doctors. So for instance, instead of having a lot of, let’s say, the sales reps, the pharma reps going and sitting outside for hours together, because they probably so many of them are doing that, but they’re trying to use technology. Because even the doctors don’t have the time and you know, frankly, for the 30 seconds you come and you show some pamphlets, I don’t know if I’m even listening to you.

So instead of that using science-based information to you, so trying to bring you up to speed using technology on what is going on in this space, why this new product is better, what is the science behind it, what has gone into, how have we ensured that this product is better. So providing that kind of knowledge to the doctors and getting them upskill so that they are better prepared to use the newer drugs, that’s another change that I’m seeing. And of course, using technology internally from a point of view of R&D, from a point of view of getting them faster to the market, all of that also, those are changes I’m seeing.

Siddhartha Ahluwalia 45:00

And are you seeing like India discovering new molecules or is it still India is copying like the molecules from the US?

Meena Ganesh 45:06

There’s a lot of the latter still.

Siddhartha Ahluwalia 45:11

And what will it take for India to build that kind of research here?

Meena Ganesh 45:16

I think probably it’s a nice time for that to happen, because some very, very large pharma companies have come up in the domestic market. They have done exceedingly well, they have grown very rapidly. So they find that it’s worth their while to invest in R&D.

Of course, companies like Cipla have always been very science driven, their own R&D, they’re not copying from elsewhere. They’ve done their own products they’ve created, maybe they are branded generics, but still there’s a lot of R&D that they do of their own and come up with new products as well. So there is a mix and I see that the ability to invest in R&D is now coming up.

And the other thing which is improved, I think is the quality of manufacturing to make sure that they are FDA standards, because a lot of these are manufacturing products for the global industry, global market. So they have to be of that standards and then they get the US FDA coming and doing their audits, etc. They need to be up to the standard.

So I’m seeing improvements in that.

Siddhartha Ahluwalia 46:19

Recently, I think it’s not more than two, three years old, that Crocin got rejected by the US FDA and got banned in the US. So it’s constantly like India, as a country, we have to up our game in the kind of product, the quality of the products that we develop. And now I want to cover health insurance, which is super critical in India.

There are 500 health insurance companies operating in India, and the penetration is around 35%. Right now, how much do you think the private insurance is effective yet in India, in covering all the use cases or all the diseases today?

Meena Ganesh 46:57

Private insurance will cover any disease so long as it is…

Siddhartha Ahluwalia 47:00

You pay for it.

Meena Ganesh 47:02

No, so long as it’s in the hospital. And you’ve disclosed it and it’s not something which is a prior condition and all of that. So there’s no big restriction on that.

But that, most of the good insurers. But the problem is not that, the problem is that the spend that we all incur is not just for the hospitalization. The spend is for pre, post, continuous monitoring.

Somebody has got diabetes, they have to have medicines every month. Those are not getting covered, and that becomes a challenge. So then what happens is slowly people stop their medication or they don’t follow through because for many people it can be quite expensive.

If there’s somebody who has been through… See today, if you look at it, even cancer is a chronic disease, many cancers. Some cancers are very critical and lethal, but many cancers are nothing but another chronic disease.

But after the treatment is over, the treatment probably will get paid for by the insurer. But after that, you have to continue to be on some drugs. It is expensive.

So people tend to fall off the wagon after some time. So those are problems that continue to remain in the insurance, even the coverage that is there. And what that does is that it comes back, it can lead to, in the case of cancer, it can lead to the whole recurring and more money getting spent and the insurance getting billed for more.

But it is something that the insurance company need to spend a lot of time to understand what is the cost benefit for them. What is it that you should cover beyond the hospitalization such that it comes back, the claims ratio for future are taken care of. So I’m not an expert in insurance, so I cannot talk through what they should be doing, but there is a problem that needs to be sorted.

But having said that, I don’t think any country has solved that problem either. If you look at in the US, it’s so expensive. I mean, it’s really strange how much the hospitals charge.

The individual may not get hit with it, but the insurers are getting hit with very large payouts that they do. And as a result of that, the premiums will keep rising. So the whole…because the doctors are not being, or rather the doctors are practicing, especially in the US, defensive medicine, they don’t want to be told, oh, you didn’t do all these checks by somebody who sues them.

They just throw everything at it and insurance will pay, cost of insurance goes up. So the whole thing starts to become a sort of insidious and negative cycle that gets built. Yeah, yeah. So it’s a big problem.

I don’t have the answer to it. But in India, there are multiple levels of problems. You asked me, are we covering adequate amount of conditions?

I would say that before that, you please cover more number of people. So let everybody at least get basic insurance of the hospitalization. We are not there as well.

About like you said, 35% is insurance covered, 65% don’t have any insurance. So then what happens, you get into debt, somebody has any big hospitalization, maybe you have a cardiac arrest or something, all your money is gone, you put all your jewelry, all the land, everything goes in, and that is the end of that life. So that first can we solve that big problem?

That is one. Second, how can we incentivize good primary care so that people don’t get pushed into the secondary and tertiary care, things can be sorted right. Those are immediate problems if we can solve, at least we will reduce the amount of challenge, the cost that the individuals incur today in healthcare.

Siddhartha Ahluwalia 51:04

And are you having these discussions, since you’re a board member of a pharmaceutical company and you are having regular discussion with insurance companies, that is OPD going to be a part of insurance in near future?

Meena Ganesh 51:18

Not, Not from a Pfizer perspective, which I’m on the board of, there is no discussion. I mean, that’s not the place this conversation should happen. But as Portea, we do have a lot of conversations with insurers to see how we can cover more things.

Can we motivate the beneficiaries not to land up in the hospital? How can we keep them out of a hospital? So we’ve created packages for that with a number of standalone healthcare insurers, where we say that if somebody comes presenting with fever, tell them that our doctor will call you, we will do a triaging and decide if you really need to go to the hospital or can we handle it at home?

Because that completely reduces the total amount of expenditure that they incur.

Siddhartha Ahluwalia 52:05

India is one of the top destinations globally for medical tourism, attracting over 500,000 medical tourists on an annual basis. And the overall revenue generated by this industry, just medical tourism is more than 3 billion dollars in India. But what we are seeing is, isn’t the quality and the cost both are effective?

And that’s why most of the medical tourists that are coming to India are from regions like Africa or other parts of the globe which are not developed. Is that right?

Meena Ganesh 52:36

Well, not entirely right. You’re right, of course, that they don’t have in those locations, access to healthcare itself is limited. So they find it better to come to a country like India.

But interestingly, I’ve seen from European countries as well. And there are many of the players who bring in patients from the globe into India. I’ve interacted with them and they say that even the Europeans, there are a number of them that like to come here, European and Americans also because of faster access to health or access to these kind of surgeries, etc.

Quality and the price, all the three are important because of which they find India good. And interestingly, some of our top, there are some very, very well-known doctors and surgeons in India who attract a lot of demand from global patients who come here. And also for some very high-end procedures like organ transplant, you get a lot of people.

Siddhartha Ahluwalia 53:43

And for example, like India has world-class doctors who are renowned worldwide like Dr. Naresh Trehan, Dr. Devi Shetty in their respective fields. So people are attracted by these large marquee names. That’s why they come to either Medanta or to Narayan.

Meena Ganesh 54:00

Well, yeah, I mean, of course, they come to them, but they don’t come only to them. So doctors in India tend to create a full market for themselves by going into these, they go to the Middle East or go to Africa or some countries in Europe, they would go there, they will carry out their OPs over there, they’ll see the patients, they will then qualify them for surgery, and then the patient would come to India. So they have local partners there who set up these camps for them and for the doctors in India to go and present themselves, so to speak, and build their credibility in this market.

Siddhartha Ahluwalia 54:39

So is this happening at scale?

Meena Ganesh 54:41

Of course, it does. Yeah Yeah. It’s a big market. So I have a very good dentist who keeps disappearing.

And I know why he goes to some Middle East, some countries where he has his clinics and he’ll do his OPs there and then patients come for, he is a very good orthodontist, so they come for the long duration surgeries. He’s a dental surgeon as well. They come for those kinds of procedures here.

So that is part of the outreach campaign that they need to do to get their patients here.

Siddhartha Ahluwalia 55:16

And do you see this as one of the fastest growing industry in India in healthcare?

Meena Ganesh 55:22

I don’t know whether specifically I would say it’s the fastest growing industry. I don’t have that kind of visibility, but certainly it is something. Of course, it took a huge hit during COVID.

It completely died and then people have gone back and started to build it up over the last couple of years. So now it’s coming back into the same size and shape as earlier.

Siddhartha Ahluwalia 55:45

And now I want to discuss about the medical devices and equipment industry that you yourself are providing to your patients, medical devices at home. So India as a market is like 11 billion dollars of medical device equipment growing at 8% and over 800 medical device manufacturers in India. How have you seen this industry transform over the last 10-15 years?

And what are the kind of devices that are getting built at scale in India?

Meena Ganesh 56:17

So firstly, let me clarify what we do and then answer your question. Portea offers different kind of medical equipment and not necessarily devices. There’s a slight difference between the two.

In my head, equipment that we talk of are things like medical grade beds, multi-para-monitors, DVD pumps for people who are bedridden to respiratory, different kinds of respiratory devices, ventilators, bypass, CPAPs, oxygen concentrators, that’s a whole segment. Then there is a mobility and geriatric care like wheelchair, walkers, and crutches and those kind of things which are required by the elderly. So there’s a whole range of medical equipment which are required for people to be taken well care of at home.

So that’s what Portea does. We offer this as a product that can be rented by people or they can buy outright from us depending on what the economics of it. It’s going to be long term, you take the wheelchair, you buy the wheelchair, you don’t rent the wheelchair, it doesn’t make sense.

So that’s how the whole thing works. Now speaking about medical devices in India, there is, in the respiratory category, I know there’s a lot of medical, local medical devices that have got created in India. So different ranges of oxygen concentrators, especially around COVID, a lot of that got built over here.

The other place where I’m seeing a lot of innovation in India are monitoring devices. So these are called Holter monitors for monitoring somebody’s ECG over a long period of time. So if somebody is a cardiac patient or there is a risk of some cardiac event, then they are asked to wear a Holter monitor, which you, and there are different kinds of, starting from just a patch that you stick on to a proper Holter that you wear, which has got a number of leads and it stuck with you and you can take a bath with it also.

So those kind of, so there’s a whole range for, and they are monitored for 24 to 48 hours, depending on what the protocol is. And it will give you data about how, what is the, how the ECG has performed during that period. Are there any cardiac events that happened during that?

So those kinds of monitoring devices for whether it is for cardiac, for sugar, for blood pressure, for various kinds of monitoring long-term, I mean, longitudinal monitoring devices. So that is one thing that I’m seeing from category. Third is point of care diagnostic devices.

A large number of those that have come, ranging from breast cancer screening to all in one box, which will check for 25 parameters. It’s a whole range of the point of care devices that are coming out, which are being then offered to either governments or to B2B players who want to carry out large camps, etc. And the fourth category is the wearables.

So these wearables are not necessarily medical grade. They are more like preventers, wellness, rings and watches of different kinds. CGMs are more medical grades.

So even the UltraHuman CGM is actually an Abbott CGM that you wear, but UltraHuman on top of that created the full platform. Now after that UltraHuman has created its ring and other products, which that’s not, and that’s their own device that they’ve created. And people are creating devices for monitoring elderly to make sure they’re not falling.

So those kinds of things are things that we are seeing a lot more of innovation.

Siddhartha Ahluwalia 1:00:02

And how do you classify whether it’s a medical device or a medical equipment?

Meena Ganesh 1:00:06

Medical equipment is something which is a product that sits there and somebody uses it. Medical device, I would say something that you probably wear for some monitoring or some such purpose. And the other category, which is a point of care diagnostics, you’re not going to wear it.

Somebody will come just test you or you have it in your house at a particular point of time, you do a testing. So that’s what I put into the point of care devices. The wearables, of course, you know what wearables are.

Siddhartha Ahluwalia 1:00:35

And is innovation happening enough? For example, like a full body blood test, there are still three vials or four vials of blood that have to be drawn. So I believe that the new technology coming in, the simple thing is that the amount of blood that can be drawn can be reduced to one vial.

Meena Ganesh 1:00:54

What you’re trying to do with Theranos.

Siddhartha Ahluwalia 1:00:59

I don’t want to go there, but yeah.

Meena Ganesh 1:01:00

No, but yeah, so there are some devices that see there are some point of care devices that have come which are sort of all in one with less amount of limited amount of blood that’s been drawn, they can do a number of different tests, maybe 10-15 tests they can do, so that’s one thing which is possible. But most of the times, these point of care devices are better for screening rather than for the quantitative measurement. So the difference for instance is that they can say whether you have a disorder in say urine, there seems to be some disorder or it has or doesn’t have glucose in it, it has or doesn’t have albumin in it, but will it be able to measure and tell what is the percentage of albumin, those kind of devices are fewer and far between.

So a lot more on the screening front, there are these all-in-one devices with one drop of blood, everything, there’s a lot of that that’s coming in which we will innovate

Siddhartha Ahluwalia 1:02:06

and India is becoming a hot ecosystem for innovation.

Meena Ganesh 1:02:09

Yes, I also saw one very nice product for diagnosing tuberculosis, by breathing into something it’s able to give a very good analysis of whether there is a possibility of tuberculosis. So a lot of these things, so but I’ll tell you that these things are a journey. You can’t… nothing will be like overnight become a huge success because it needs a lot of data to see whether it is truly giving you the right kind of the effectiveness and the specificity is of the right order that you can rely upon it, it should not give too much of false positive, false negatives and none of the, if you have any of those problems then you can’t rely on that, then you have to go to do something else after that.

So it takes time for these because you need a body of data to get to that place.

Siddhartha Ahluwalia 1:03:03

And these devices because they’re all matters related to health have to be 99, at least 99% accurate on all of the time. And though new hospital chains are coming up in India, the old ones are acquiring the previous ones, new PE money like for example Temasek buying Manipal group, these things are happening. But do you see…But what has been reported is that only the top 20% of the hospitals in India are profitable, the remaining, like India has 30,000 hospitals, the remaining 80% of the hospitals in India are unprofitable.

Why is that so? Because the need for healthcare, like India’s infra is always reported, we also discussed that, is so much less as compared to its population.

Meena Ganesh 1:03:54

Yeah. I think paying capacity is one and the economic sizes are not there. So I suppose 10-15 bed nursing home for them to make money tends to become very challenging. And that’s probably the reason why you’re seeing so much of consolidation also in the hospital space.

Manipal has been on an acquiring spree and picked up so many hospitals. And I am sure other groups will also be doing the same thing and so does Apollo. So it looks like size is something which is important in the hospital space or it has to be such a high specialty that they are able to charge substantial amounts.

Because if you look at it that where does the hospital make money really is in the first two days of the admission of a patient. That’s when the real amount of revenue per operating bed comes in. After that, it becomes like a hostel or it becomes like a hotel.

They’re paying for the room and they’re paying for some basic services, that’s all. The first two-three days when all the diagnostics and all the operation, the surgery is happening and all kinds of medications are used, that’s when the maximum amount of revenues and hence margins come. So unless you have that, you have the ability to do that kind of work in a hospital.

So the hospital needs to have the infrastructure that in the first two-three days, they’re able to do all that the patient needs so that they can make money out of that. If it’s a basic hospital, I think they would really struggle these days to make money.

Siddhartha Ahluwalia 1:05:35

Thank you so much, ma’am. I thoroughly enjoyed our conversation. It was so insightful. Hope my listeners find the same level of insights that I found during the conversation.

Meena Ganesh 1:05:45

Thank you, Siddhartha. I really enjoyed our conversation. Thank you for having me here as part of your podcast.