Meanwhile, given that it has a handful of financial investors, Nova does intend to list “at some point” to allow them good exits. In a country where tertiary care is well established and primary care is in a shambles, Nova is setting up the much-needed middleware but it will be a while before the results start showing, he says. A limiting factor, says Amit Mookim, a partner with KPMG India, is that this is a consultant-dependent model. Though Dr Reddy says this model is financially more rewarding as doctors don’t pay any affiliation fee, which is required of consultants in some hospitals, it takes a while for a centre to fill up. Getting doctors’ buy-in for the day care format as well as for their remuneration process is tricky, because aspiring professionals go by the number of beds rather than by profitability or care outcomes. “Everyone in India is in a hurry to change jobs and make money,” says Soni. Like most businesses, Nova faces the challenge of retaining and managing talent.
Then, the investors, other than Dr Reddy, are global-GTI Group, Goldman Sachs, New Enterprise Associates and OMZEST-thus the company has managed to keep a low profile. Since it conducts procedures for which patients typically choose big hospital chains, Nova chose to build a reputation first, and then launch a marketing campaign. It is a three-year-old brand and present in only seven cities. Some of the surgical and IVF centres are Ebitda (earnings before interest, taxes, depreciation, and amortisation) positive. This allows it to provide services at 20-25 percent lower price than the big hospitals. The cost-per-centre ranges from Rs 12-20 crore depending on the location. “It is a doctor-owned and doctor-managed model,” says Soni.Įach centre, built in leased buildings, has about 25 beds and 40-50 consultants.
Instead of a salary, Nova provides fee-for-service (every surgical package has a fixed price) and allows doctors to buy equity in the business. It has also shown a healthy way to co-opt doctors. Since patients don’t stay in hospitals, there are fewer acquired infections. Soni wants to build a $1 billion business Dr Reddy wants to see ambulatory services reach every corner of India and hopes that government hospitals will, like the UK’s National Health Services, move to day surgeries for efficiency and cost reduction.īy offering 900 to 1,000 short-stay surgical procedures, Nova provides a scalable model of effective and affordable health care. An entrepreneurial surgeon, Dr Reddy had opted to specialise in non-emergency/trauma surgeries during his training in the UK. Once he finalised on short-stay surgical centres as a business focus, he began searching for surgeons.
#NOVA HEALTH CARE CENTER PROFESSIONAL#
Before Nova, it was Airworks, a decades-old family-owned business which he acquired and turned around, along with other investors it grew from Rs 10 crore to Rs 250 crore in two years.įor a technology professional who had spent 20 years in the US with companies like Lucent and Emerson, parachuting into India as venture partner of GTI Capital was a tantalising challenge for Soni. They may be as diverse as power electronics, oil technology and aircraft overhaul and maintenance, but he finds a way to fast-track them all. Soni seems to have mastered the art of spotting, seeding and growing businesses. That gives it a reasonably big addressable market. Of nearly 120 million infertile couples in India, 20 million can afford Nova’s services, it claims. In the IVF business, where the break-even is faster, its tie-up with IVI of Spain, which brings the whole kit and kaboodle of technology, treatment protocols and research, is the biggest differentiator. “It has all the complexities of a big hospital but it neither feels nor smells like one it is like a boutique hotel,” says Suresh Soni, chairman and chief executive officer. Each centre, run as a small business unit with its own profit and loss account, is complete with pharmacy, pathology labs, diagnostic services and health check-ups.
It will ring up nearly Rs 300 crore in revenue in 2013-14. Nova now operates 12 short-stay surgical centres and six IVF centres in seven cities. During this time, it evolved from pure day care to short-stay (where a patient could stay overnight at no additional charge). It took a year to start the second centre. When Nova Medical Centers started in June 2009, in Bangalore where it is headquartered, it had to evangelise ambulatory services, which comprise 70 percent of all surgeries globally.
Surgeons, too, are only now warming to this idea. In a country that associates surgical care with hospitalisation, the concept of ambulatory services, or same-day discharge, requires greater trust in scalpel-wielding specialists than patients have ever had. Nova Medical Centers’ co-founders, Suresh Soni (left) and Dr Mahesh Reddy
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