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24 RETAIL BIZ JULY 2009

RETAILInsight

Over the last few years, the Indian retail, healthcare and

information communications and technology (ICT)

sectors have undergone rapid growth and transition to

meet the western standards of quality and service

delivery. However, the current economic slowdown is

forcing each of these sectors to rethink their business

and operating models and innovate.

Current trends and challenges aheadThe current economic scenario has created several

systemic shifts in the way retail, healthcare and ICT

players can leverage the emerging consumer trends

and challenges.

Organised retailing In urban India, it is estimated that over 200 retail stores

and malls are in the pipeline, with over 200 million

square feet of space. Under the current circumstances,

with the lowering of rental yields and higher cost of

finance, it is imperative to innovate newer retail models.

Healthcare retailing and care delivery With approximately 4-5 percent of the overall organised

retail space in urban India dedicated to healthcare and

allied products and services, there is potential to grow

and be at par with our western counterparts.

ICT services ICT players and solution providers in India have

introduced new low-cost solutions that can serve a

potential population base of over 70 million in urban and

semi-urban India. The role of ICT services is expected to

grow the distribution of healthcare delivery outside the

traditional setting of the doctors clinic. With the kick-off

of national ID initiative announced in the recent budget,

a unique ID would serve in enabling a portable

healthcare record system in a seamless health

information system linked to the unique ID by the

healthcare and ICT solution providers.

Consumer needs and preferences There are potentially over 40 million households in

urban and semi urban areas, predominantly in the

northern, western and southern Indian states that have a

high risk of chronic diseases, given the genetic

disposition. With consumerism in healthcare,

households in SEC segments A and B have identified

issues to access and price their wellness, preventive,

curative and chronic healthcare, pharmacy and

support services.

With the current economic slowdown, there have

been increased preferences to switch and delay wellness

and preventative care products and services. Consumers

also prefer providers who can give appointments the

same day, consult over the phone, or extended hours and

Kapil Khandelwal says that healthcare retail emerged as a

concept around two years ago. However, its convergence

with cross-domain sectors like retail, education and

manufacturing is a very recent development

Healthcare Retail:Picking up pace

on weekends or holidays in the same shopping vicinity,

avoiding long trips. Clearly, price and proximity matters

as consumers are altering their shopping patterns for

price, availability and access. Some of the above

emerging trends in the sectors are enabling a

convergence and a paradigm shift towards health retail

2.0. that leverages on the convergence of retail and

healthcare delivery integrated with ICT solutions.

Healthcare retail 2.0: Conceptual framework Healthcare retail 2.0 emerged as a concept around two

years ago. However, its convergence with cross-domain

sectors like retail, education, manufacturing, etc is a very

recent development. There are several key characteristics

that emerged as a result of this:

A new location or a way of connectivity between

patients, and patients with their care provider

The sharing and transparency of information about

care, health and providers, and the support in choice and

delivery of healthcare care in a retail format

The self-management and access to health

information of individual patients in any health status,

whether healthy or chronically sick

Interoperability of health information, which benefits

the sharing and access to this information leveraging ICT

technologies from one service provider or location

to another

The empowerment of patients through widespread

and richness of information to make choice on the

location of his care and its setting

The open conversation about and innovation of health

care through consultation of all stakeholders and

application of a new business model based on multiple

value creation

Growing role and importance of various players and

intermediaries, who enable the conversation between

patient and caregiver, at the same time contributing to it

The branded healthcare clinic chains have been in

India for a few years with well established names such as

Apollo, Manipal, Fortis, Kaya, Ayush, VLCC etc. to name

a few. Newer ICT-enabled models such as EMRI, HMRI,

Healthcare Magic, etc have also emerged as a

complement to delivering healthcare consultation and

response remotely. Initiatives in rural India are already

ongoing to ensure that the village entrepreneur who is

operating the Information Kiosks can also enable

ICT-enabled healthcare delivery. Diagram 1 in this article

provides a contextual frame of reference for healthcare

retail 2.0 operating model.

With potential retail space available in metros, urban

and semi urban at lower rentals, there is potential for a

business model of conveniently providing standardised,

fast, limited services at transparent prices by retail chains

in partnership with pharmacy or healthcare clinic chains.

These clinics would be enabled by technology to facilitate

quick consultation and turnaround for the whole

spectrum of healthcare, right from wellness to chronic

disease management. Such clinics would have specialist

physicians available for consultation virtually, for referral.

Emerging retail formats Some of the newer formats that would emerge out of

health retail 2.0 convergence would be ones that create

new innovative and disruptive delivery models of

healthcare in India. These would include:

In store clinics:

These clinics would look like urgent care clinics that

would be located in retail/pharmacy chains with a space

of 100 to 200 sq feet. The nurse/general practitioner

would have access to specialists for referral to the hospital

chain to which it is affiliated. These clinics would be

operated seven days a week with extended hours.

Medical spas:

These would potentially be offering lifestyle oriented

consultations within salons and spas. They would address

areas from nutrition, exercise to massage, cosmetic

surgery etc. These outlets would be affiliated to beauty

and cosmetic counters.

Express health and diagnostic clinics:

Typically staffed by a nurse or a general practitioner, these

are walk-in clinics to facilitate quick diagnostic and check

up for non-emergency care for preventative and chronic

care.

Health and wealth counselling:

These clinics would provide specialist counselling

sessions that would involve both a health assessment and

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RETAILInsight

insurance/wealth management advise including product

solicitation. The formats here could be single brand

or multi-brand.

Specialist clinics:

Linked with particular brands and products, these clinics

would offer scope for augmentation through specialist

consultations with dermatologists, dietician, dentists etc.

Call center-bbased disease/case management with

community clinics:

This model emerged in the US where case managers are

assigned to the patient who is chronically ill. In case of

any consultation or walk-ins required, the patient walks

into the in-store clinics in their community.

Kids health and wellness:

These clinics are within children stores that can provide

easy diagnosis for common ailments and also

vaccinations and inoculations that are due.

Key success factors for healthcare retail 2.0 While the jury is still out there to evaluate the emerging

shifts in healthcare delivery innovation in India, some of

the critical success factors to this emerging model for care

delivery include:

Integration with hospital provider:

Consumer confidence to such disruptive innovation in

healthcare delivery would be instilled if there is a

branded hospital provider supporting the seamless

delivery of care.

Cost:

While consumerism is forcing transparent low-cost

models to emerge, successful models would be the ones

that can clearly provide value at lower operating costs. A

transparent menu card pricing approach for the services

would drive traffic. While costs and time are critical

elements of this model, retailing of healthcare would need

to create an ambience which is in line with these.

Standardisation of services:

Care delivery models that would have standarised process

would have the biggest impact on the cost and value

delivered. These could be stretched further to include

quality measures to improve on the services and the care

outcomes.

Time and place convenience:

One of the critical riders of success of such models is the

ability to provide seamless 24x7 anytime, anywhere

service. ICT technologies coupled with location of

such clinics would augment the value of the

services delivered.

Branding:

Services co-branding with healthcare products/services

provider would definitely positively associate with such

services and also enable additional foot falls into the retail

outlets.

Information technology:

Affordable, compact diagnostic devices that are

connected with healthcare ICT systems and evidence-

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Wellness& Prevention

loca

tion

Health Status(CDC Adapted)

Disease Treatment& Management

Heally Vulnerable Affected Sick (Acute) Sick (Chronic)

Virtual

Home

Work

Outpatient clinic

Emerging

Hospital

Long-term care

Employee clinics

Healthcare retail 2.0

Urgent care clinics (After hours)

Diagram 1

based health information systems are the key to success

for any retail-based healthcare delivery model.

Continuity of care:

As the retail models of healthcare delivery would evolve

over time to become mainstream, the need for continuity

of care for conditions is important. Linkages through

hospital tie-ups and information systems is an important

aspect here.

Key stakeholder perspectivesThe win-win from various stakeholders in the emerging

healthcare retail models would have to be analysed to

ensure that tweaks are made appropriately for long-term

success:

Retailer/mall host:

The retail player gains through participation in the

model by ensuring increased foot falls and private label

sales. Apart from lease rentals and/or profit sharing,

other incremental revenue streams that would accrue

from this model include shelf slotting fees, co-promotion

and sponsorship.

Healthcare retail operator:

While the economics for the healthcare retail operator

are challenging, the operating costs have to be managed

tightly. The pricing strategy would have to ensure that

there are adequate number of customers averaging four

to five per hour.

Healthcare insurance providers:

While outpatient visits are currently not covered by many

of the health insurance providers in India. These models

could enable newer products that would cover outpatient

health insurance as well as tie-ups for health-wealth

counselling setting to solicit health insurance coverage.

Disease management providers:

As new models of chronic disease management emerge

in India, these clinics would be low-cost access points for

customers and opportunity to augment their service

offerings.

Venture funding and investors:

The key driver for growth of such innovative models for

healthcare delivery would be funding for such outlets.

There is potential for PE and VC firms to explore such

models for entrepreneurial investments in healthcare

that provide quicker break even and exits in less than

three to four years timeframe.

Quality accreditation agencies:

Agencies like NABH, JCIA etc would have to evolve

approaches to ensure that these models are accredited to

provide consumer confidence.

Consumers:

The healthcare retail models offer consumers to decide

how, when, where to seek healthcare services from a

wide range of options and formats. Most conventional

healthcare providers may disagree about what the

patients think and require. However, the innovation life

cycle in retail takes three to five years to mature as

compared to over 15 years in healthcare and hence this

could lead to breakthroughs in meeting consumer

requirements.

With the successful emergence of various

healthcare retail formats and transparency of

information about care, health and providers, and the

support in choice and delivery of healthcare care in a

retail format, there is nothing can that stop healthcare

retailing in India from moving forward and achieving

an 'at par' status with its western counterparts in the

years to come.

The author is one of India’s leading experts in healthcare and

life sciences IT in Asia Pacific and emerging markets.

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