Possibility of electronic health records linked to the unique ID project make medical portals attractive to investorsThe nascent healthcare portals industry is up for a funding boost, given its attractiveness for private equity, or PE, and venture capital, or VC, investors, as well as the Unique Identification Number, or UID, project that will collate digital data on the nation’s population.
“The holy grail in this space would be personal medical records,” says Alok Mittal, managing director at VC firm Canaan Advisors Pvt. Ltd, referring to the automation of hospital records, a possibility through the UID project.
The Apollo Hospitals group has offered to manage health records through the Nandan Nilekani-led Unique Identification Authority of India. It has also invested in a company called Health Highway that, according to group executives, connects doctors, hospitals and pharmacies who would be able to communicate with each other and access health records.
Sangita Reddy, executive director (operations) at Apollo Hospitals, cites the hypothetical case of a car accident victim being rushed to a hospital emergency room.
“You could physically identify who that person is but you wouldn’t know his blood group, his allergies or anything about his health,” Reddy says. “Whereas, if his UID number was linked to a UHID (unique healthcare identification number), and there was something called emergency access, you could go into that and identify his complete record. So, there are all kinds of instances as to how we could use this to help save lives and improve quality of care and reduce cost.”
Apollo Hospitals has written to the Unique Identification Authority and to the Knowledge Commission to link the Unique Identification Number with health profiles of those provided the ID number, and offered to manage the health records, Business Standard reported in August.
Formed this year, the authority under Nilekani, co-founder of software services firm Infosys Technologies Ltd, is tasked with building a database of details on every Indian citizen.
“A lot of hospitals are making a fair amount of investment in information technology for improving the efficiency of workflow management and data processing or management,” says Amit Chander, investment head (healthcare and education), Baring Private Equity Partners India Ltd.
Healthcare portals that maintain electronic health records will thus play a critical role.
The industry is divided into four broad categories: firms that maintain electronic health records such as Yoscare.in and Healthizen.com; those that provide diet, fitness and nutrition counselling such as NutritionVista.com; firms that are focussed on disease management such as Wellinformed.in; and online doctor-patient consultation firms such as Healthcare Magic and online health content firms such as WebMD in the US.
Some VC firms that invested in such firms early on include Accel Partners, which put $2.5 million (Rs11.68 crore) in HealthcareMagic in February, and Seedfund, which wagered $1 million on Healthizen.com in January last year.
The technology is already in use in Bangalore, where YosCare Technologies has launched smart cards that, when swiped at a hospital, fax the holder’s medical history to the hospital.
“We are already in talks with the RTO (road transport organization) in Karnataka to issue Yos smart cards as driving licences,” said Vijaya Verma, founder of YosCare Technologies.
Muralidharan Nair, partner (lifesciences practice), Ernst and Young Pvt. Ltd, said healthcare had caught the fancy of many investors given that healthcare reform is going to be big on state governments’ agendas.
“Also, in terms of demand assessment there is a lack of credible health information, so to have comprehensive health information and records system would be sought after,” he said, but added that healthcare portals would be an area of interest more for venture capital firms than private equity.
PE firms which provide growth capital are more likely to invest in hospitals or diagnostic centres, while VC firms are more likely to invest in technology-driven start-ups that they can associate with from the beginning.
“Companies which embrace this model (of maintaining electronic health records) first will be able to build a big brand around it,” says Chander. “Not only will it reduce the problem of data storage but later on when it (the model) is fully developed they can run analytics on the data and use it for preventive measures.”
Chander also points out that while the global marketplace is overcrowded, with US-based WebMd and Google Health being key players, India has the option of customizing content for local needs.
However, a number of obstacles still remain.
Kunal Sinha, founder of Healthcare Magic, which provides patients a 24/7 interface where they can chat live with a doctor, admits that starting off was not easy. “I had to convince doctors to work for a start-up rather than a hospital. They were on my (company’s) payroll. So, right from Day 1, it was capital intensive.”
Market and consumer acceptance is another issue. “The need to maintain health records is not immediate and important for people as of now, so it is difficult to educate them and make them aware,” says Anand Anupam, founder of Healthizen, which maintains electronic health records that can be accessed anywhere.
Tie-ups with insurance firms, such as the one that HealthCare Magic has with ICICI Lombard General Insurance Co. Ltd, are also critical, since this allows access to a much larger pool.
Healthizen provides value-added services such as diet planning or skin care to holders of specific policies of ICICI Lombard and Royal Sundaram Alliance Insurance Co. Ltd.
Low Internet penetration is another obstacle, but that is more easily overcome.
Chander argues that the mobile phone is to India what the Internet is to the US, and that an application that can be accessed via mobile phones would enable these portals to increase their reach.
Ref:
http://www.livemint.com/2009/12/29203506/Healthcare-sites-may-see-a-fun.html?d=2
