Nephrocare Health Services – Best Medical Service Outsourcer FINALIST– 2018

Healthscope New Zealand Limited is the largest provider of laboratory services in New Zealand through its subsidiaries, Southern Community Laboratories (SCL), Labtests and Northland Pathology and is strong, broad based and underpinned by a committed parent company. The New Zealand pathology group comprises 25 laboratories and 152 collection rooms, provides services to 15 public hospitals, has 1,921 employees, and provides over six million patient episodes annually.  

In 2015, SCL was awarded the exclusive single-provider outsourcing contract to provide pathology laboratory services to the Greater Wellington region.

The laboratory outsourcing has involved a comprehensive list of tests done across all pathology disciplines. Wellington SCL will derive revenue of NZ$54 million in the first year of the contract (based on the agreed funding level), with indexation applying in subsequent years.  

Expected savings of over NZ$100m over ten years, turn around times for histopathology reduced from 9 days to under 5.

Nephrocare Health Services Pvt Ltd (NephroPlus) was founded in 2009 by a dialysis patient Mr Kamal Shah and former McKinsey & Company consultant Mr Vikram Vuppala. In a short span of just 8 years, NephroPlus has grown to become the largest network of dialysis centres with 135 operations centres (as on Jan 31, 2018) spread across 85 cities in 18 states. With our motto of “Guest Care Comes First”, our topmost priority is to enable people on dialysis across the world lead long, happy and productive lives. We strive to provide the highest quality dialysis in an affordable setting. All our teammates undergo hours of rigorous training and certification before they are inducted to handle patients, who are referred to as “Guests” in our ecosystem. We have also introduced for the first time in India, innovative concepts like “Holiday Dialysis” which help our patients lead enriching lives without any boundaries. In FY17 (Apr’16 – Mar’17), NephroPlus achieved its target of ~USD 15 MM in revenues and is enroute to cross USD 21 MM in FY18 (Apr’17 – Mar’18) . NephroPlus currently has a staff strength of about 2,000 employees. In addition, more than 75 of leading Indian Nephrologists are our partners who help us develop the best quality protocols.

Hospitals outsource the dialysis unit to NephroPlus. NephroPlus operates and controls every aspect of the dialysis unit including staff, technicians and consumables. The Hospitals only manage space and utilities, while all operational and quality protocols and processes are managed exclusively by NephroPlus.

As of 31st Jan 2018, NephroPlus has ~103 centres with Private Hospitals, ~29 centres with Government Hospitals and 3 Standalone centres with combined 1,450+ beds under operation. Nephroplus is currently doing 3,300+ dialysis sessions per day and serving nearly 11,000 active patients. 15 hospitals associated with us are NABH (National Accreditation Board for Hospitals) accredited, and 2 hospitals associated with us are JCI (Joint Commission International) accredited, therefore, certified to be amongst the best quality hospitals in the country. Some of India’s top hospitals including Max Group of Hospitals, Jehangir Hospital, Medica Hospitals, IVY Hospitals and Sahyadri Hospitals have partnered with us to provide quality dialysis service to their patients.

NephroPlus is also the preferred dialysis partner for various Indian government agencies and state governments including Employees’ State Insurance Corporation (ESIC), largest autonomous Indian government body covering Indian workers. NephroPlus currently serves employees of Indian armed forces, paramilitary forces among other government agencies

The clients are of 2 major categories: Private Hospitals & Government Hospitals

Contract durations are usually 8-12 years on an average. Few sample centres with details are given below:

1. Lokmanya Hospital, Chinchiwad, Pune: Started in Mar’14 with a 9 year contract. Has grown from revenue of ~USD 30K per year in FY 13 (Apr’12 – Mar’13) to ~USD213K in FY18 (Apr’17 – Mar’18). Currently the centre has more than 62 active patients and is doing more than 750 sessions per month

2. Max Healthcare, Dehradun: Started in June’13 with a 5 year contract. Has grown in revenue from USD 40K in FY13 (Apr’12 – Mar’13) to USD 290K in FY18 (Apr’17 – Mar’18). Currently the center has more than 125 active patients and is doing more than 110 sessions per month

3. Sant Dnyaneshwar Hospital, Moshi, Pune: Started in Oct’15 with a 10 year contract. Centre has grown in revenue from ~USD 37K per year to ~USD 106K in FY18 (Apr’17 – Mar’18). Currently centre has about 50 active patients and is doing more than 300 sessions per month

Sample of the savings obtained by clients / private hospitals:
Jehangir Hospital, Pune:
Recorded over USD 27K of additional profit per annum along with 2.5x growth in revenue
Particulars Before NephroPlus After NephroPlus (18 months post transition)
Regular Dialysis Sessions 550 1200
Revenues USD 127K per year USD 309K per year
OP Dialysis Profit Loss: USD 9K per year USD 18K per year
Lab Compliance 50% compliance 90% compliance
Other Improvement areas – Only paper based trackers
– No electronic data collection
– No accreditation
– Unionized and underqualified staff – Paper and real-time electronic data collection
– NABH accreditation and ready for paperless as well
– Disciplined and high quality NephroPlus staff

Pushpanjali Hospital, Agra:
Recorded over USD 38K additional profit per annum along with 3x growth in revenues

Particulars Before NephroPlus After NephroPlus (18 months post transition)
Patients 40 110
Regular Dialysis Sessions 270 750
Revenues USD 87K per year USD 270K
OP Dialysis Profit USD 7K per year USD 45K per year
Pharmacy Nil USD 300 per year
Other Improvements – Employment model for Nephrologists
– Non-Qualified staff
– No Record Keeping – Co-ownership model with 5% investment
– BONENT certified staff leading to higher patient satisfaction

Medica Hospital, Ranchi:
Recorded over USD 75K additional profit per annum along with 1.7x growth in revenues.

Particulars Before NephroPlus After NephroPlus (18 months post transition)
Patients 192 250
Regular Dialysis Sessions 1218 1747
Revenues USD 330K per year USD 572K per year
OP Dialysis Profit USD 39.5K per year USD 115K per year
Pharmacy Nil USD 51K per year
Other Improvements – Paper based trackers
– Underqualified staff – Paper and real-time electronic data collection
– Disciplined and high quality NephroPlus staff