Slow and Steady always wins the race

Yadav trained as a dialysis technician at Aligarh Muslim University, one of about 75 institutes in the country which offer specialized practical training in dialysis. Based on her experiences, she claims that the protocols at NephroPlus are the most stringent she has encountered.

“I have seen zip kits (individual kits of consumables like cotton) for the first time here. Nowhere else does every dialysis machine go through 27 minutes of disinfection after every patient,” she says. These are only a few of the measures that help prevent cross-infection. More importantly, NephroPlus uses separate machines for patients who have HIV, Hepatitis C or Hepatitis B.

Some reasons for the contracting infections

According to professor Vivekanand Jha, a nephrologist and executive director of Delhi-based The George Institute for Global Health, there are many reasons why Indians are more prone to contracting infections while undergoing dialysis. “Dialysis is a form of doing surgery. It needs very high adherence to standard operating procedures, but there is a serious shortage of adequately trained personnel. In addition to that, dialysis units tend to cut costs and not follow universal precautions for prevention of infection like using masks, gloves, etc.,” he says. Jha serves as a consultant to NephroPlus, helping them develop and implement protocols to minimize cross-infection.

Unfortunately, investment in the quality of care doesn’t automatically translate to better business in India. Dr. Raghuram BVS, the national manager of Apollo sugar clinics and former director of DaVita India, says that higher quality of care generates business in the US as independent bodies give dialysis chains a star rating.

“The higher the star rating [in the US], the better the business. But in India, everything is self-proclamation,” he laments. According to Dr. Raghuram, there is a need to objectify the quality of care. “It has to show in patients’ medical condition, and the same parameters have to be compared across dialysis centers,” he adds.

Are hospitals really subscribing to the notion?

However, neither the government nor private hospitals seem to subscribe to this notion. All they care about is the price at which dialysis is offered. “I have even heard of governments outsourcing dialysis for Rs 700 ($9.7), and it is impossible to operate and deliver quality at that price,” says Dr. Raghuram. NephroPlus prices individual dialysis procedures between Rs 1,400 ($19.4) to Rs 3,000 ($41.5), depending on the geography.

Despite the necessity for quality of care, the fact that price is a major pain point for patients means that dialysis is a business with low margins. As such, says Vikram Vuppala, co-founder and CEO of NephroPlus, it works only on a very large scale. “For the first six years, we were bleeding at a corporate level. We turned profitable at corporate EBITDA only two years ago, when we had 60 to 70 centers,” he adds. In FY2017, Nephroplus earned a revenue of Rs 96.4 crore ($13.3 million).

But this scale wasn’t attained easily. To get to it, Vuppala and Shah have had to change strategies twice.

NephroPlus began operations as a standalone dialysis center in 2010 but adapted to the market the year after when hospitals approached the company to manage their dialysis centers. Today, NephroPlus has 149 centers in 90 cities across 18 states, only 9 of which are standalone. Doctors and patients are more comfortable in hospitals, Vuppala says.

From where is the revenue generated?

Right now, it has contracts with 105 private hospitals, with the majority of its revenue coming from these tie-ups. Hospitals don’t mind the arrangement as even a premium dialysis bed fetches far less than a bed in the ICU.

Then, three years ago, NephroPlus decided to grow further by bidding for contracts with state governments and Public Sector Undertakings (PSUs). Currently, it has 35 dialysis centers that have been developed through public-private partnerships (PPPs) with state governments.

Achieving scale fast, however, is not possible when the quality of care is an objective. Vuppala learned this three years ago. “One of the things we realized at our peak velocity, growing at 4-5 centers each month, was that our patient satisfaction dropped,” he recounts.

NephroPlus immediately halted their growth plans for a few months. “We had to ensure the centers we were acquiring were transferred on to our platform perfectly. We also decided to grow only at 3-4 centers a month,” he says. The problem, he explains, is that these are physical clinics that require human resources, and there aren’t enough skilled employees to allow for rapid growth.



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