For most Indians, a surgery at a big hospital can be expensive as insurance covers only a small fraction of the population. For most such hospitals, it makes sense to prioritise patients requiring critical surgery over those needing minor operations.
Together, these two factors keep a large number of patients waiting for treatment or having to stay in a hospital for minor procedures such as hernia or ligation. Dr Mahesh Reddy, an orthopaedic surgeon, decided to service this segment with day-care centres or small surgeries where patients can get simple procedures done without having to stay overnight.
Reddy's model for his chain of Nova Medical Centers, incubated by GTI Group, is based on similar models in the US and the UK, but has innovative modifications. Surgeries scheduled at day-care centres in the UK are done in hospitals, but Reddy's day-care centres have their own operating theatres. In the US, day-care centres do not have a pharmacy or pathology laboratory. Nova has.
The first Nova facility has come up in Bangalore; which has as its partner 40 surgeons who have paid a token amount of money to become a shareholder, and also clinical and non-clinical support staff. Nova operates in a 70:30 partnership with the surgeons.
Nova works on referrals with their shareholding surgeons, who can refer patients to Nova, while those requiring post-operative care are referred to hospitals. Check in and discharge takes less than 15 minutes each.
Nova's biggest victory has been in convincing insurance companies to agree to a cashless payment system for those not requiring overnight stay or a stay of at least 24 hours. Girish Rao, CEO, Nova, managed to convince the insurers to allow a cashless payment system at Nova.
Another Nova center is coming up in Bangalore, and one in Mumbai and New Delhi each by year-end, and 25 will be on the ground by mid-2012. Backing this scale-up is a recent injection of Rs 250 crore from GTI Group, among others.
FOCUS: Day surgery centres
FUNDING: Incubated by GTI Group, a US-based venture capital and private equity firm
BUSINESS: 100 surgeries a month
BREAK-EVEN BY: Close to it, now that insurers back it
THE BEST ADVICE I GOT AND FROM WHOM: Honesty of purpose is more important than honesty of process
-Girish Rao's father