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Vinod A. Iyengar February 22, 2012 A-505 & 506 UNESCO Apt.; 55 I. P. Extension; New Delhi – 110 092 (India) Mob: +91-98184-34418; Tel: (11) 2223-8880/1/2;

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Presentation on theme: "Vinod A. Iyengar February 22, 2012 A-505 & 506 UNESCO Apt.; 55 I. P. Extension; New Delhi – 110 092 (India) Mob: +91-98184-34418; Tel: (11) 2223-8880/1/2;"— Presentation transcript:

1 Vinod A. Iyengar February 22, 2012 A-505 & 506 UNESCO Apt.; 55 I. P. Extension; New Delhi – 110 092 (India) Mob: +91-98184-34418; Tel: (11) 2223-8880/1/2; Email: viyengar@sify.com

2 Thanks to NRHM-ASHA and other socio-economic factors, the Indian public has begun to seek healthcare in far larger numbers than before Curative care for at least 10-15% of all illnesses is at the heart of healthcare There is a severe shortage of doctors and other trained healthcare personnel, which has led to their concentration in metros, cities and Class 1 towns It is almost impossible to motivate public health doctors to stay in rural and semi-urban areas Thanks to NRHM-ASHA and other socio-economic factors, the Indian public has begun to seek healthcare in far larger numbers than before Curative care for at least 10-15% of all illnesses is at the heart of healthcare There is a severe shortage of doctors and other trained healthcare personnel, which has led to their concentration in metros, cities and Class 1 towns It is almost impossible to motivate public health doctors to stay in rural and semi-urban areas The existing system of PHCs and CHCs suffer from chronic absenteeism and doctor shortages, which has made the existing referral process inefficient Since rural and semi-urban patients are unable to access doctors, suffer hardships*, and also overwhelm the existing public secondary and tertiary care systems Private care at lower level is non-standard while care at higher level is unaffordable – leading to poor standards and/or indebtedness All this makes the present public health system inadequate – a state of affairs that needs urgent modification * Due to travel/stay, loss of wages, forced dependence on quacks, etc. 22 February, 20122Vinod A. Iyengar

3 22 February, 2012Vinod A. Iyengar3 The solution envisages close cooperation between relevant State Government and a designated agency for the project, together with: Functioning State government healthcare sub-centers (SCs), primary health centers (PHCs) and community health centers (CHCs) Telephonic advise system for rural patients (to be established where there are none) Mobile health units visiting villages on fixed days (addition of extra units as and where needed) New continuum of care clinics at patient catchment areas (i.e., Class-1, 2 and 3 towns) The solution envisages close cooperation between relevant State Government and a designated agency for the project, together with: Functioning State government healthcare sub-centers (SCs), primary health centers (PHCs) and community health centers (CHCs) Telephonic advise system for rural patients (to be established where there are none) Mobile health units visiting villages on fixed days (addition of extra units as and where needed) New continuum of care clinics at patient catchment areas (i.e., Class-1, 2 and 3 towns)

4 3 mega-cities Pop.: 49 mil. 1mil. plus cities:50 Pop.: 112 mil. 1 lakh plus towns: 415 Pop.: 104 mil. Class 2 towns (pop. 50,000-99,999): 785 Pop.: 36 mil. Class 3 towns (pop. 20,000-49,999): 2,196 Pop.: 44 mil. Class 4, 5 & 6 towns (pop. < 5,000 – 19,999): 4,487 Pop.: 33 mil. Villages: 640,867 Pop.: 833 mil. Qualified MBBS doctors Max. (2.8 docs/1000 people) Min.(0.02 docs/1000 people) 22 February, 20124Vinod A. Iyengar

5 Contact Center (using all-India toll-free telephone number 104) – Medical advice to callers/patients – SMS prescriptions of OTC and Schedule K drugs available with local ASHA/ANM – Referral (supply-demand management) – Virtual handholding of patients through public health system (PHS)/hospitals – Grievance handling/communication platform – ASHA helpline – HCW support system – Logistics support for Government institutions (inventory, stores, etc.) – Training/advice on major programs (HBNC, JSY eligibility, claims, etc.) Contact Center (using all-India toll-free telephone number 104) – Medical advice to callers/patients – SMS prescriptions of OTC and Schedule K drugs available with local ASHA/ANM – Referral (supply-demand management) – Virtual handholding of patients through public health system (PHS)/hospitals – Grievance handling/communication platform – ASHA helpline – HCW support system – Logistics support for Government institutions (inventory, stores, etc.) – Training/advice on major programs (HBNC, JSY eligibility, claims, etc.) 22 February, 20125 The Contact Centre is 1 st level Primary Care and the route to 1 st level Secondary Care * * As it not only provides medically validated knowledge and advice to patients over the telephone but also refers them to Primary Care clinics/centres or Secondary Care institutions Vinod A. Iyengar

6 Works in coordination with existing government resources – Uses Sub Center ANM (2 nd ANM) Uses mobile health units (MHUs) on a light commercial vehicle base (Tata Sumo, etc.) Manned by pharmacist, sub-centre ANM and a driver Doctor travels with MHU where possible – Doctors can travel for 1 week every month in places where resources are constrained Aligned with VHND and ANM travel plan to the maximum extent Performs RBS, Malaria, US, Urine Albumin, Pregnancy tests Delivers RCH, Chronic Diseases and National Vertical Programs IT Backbone to ensure daily data transfer to central system integrated with HMIS and other Government IT systems Works in coordination with existing government resources – Uses Sub Center ANM (2 nd ANM) Uses mobile health units (MHUs) on a light commercial vehicle base (Tata Sumo, etc.) Manned by pharmacist, sub-centre ANM and a driver Doctor travels with MHU where possible – Doctors can travel for 1 week every month in places where resources are constrained Aligned with VHND and ANM travel plan to the maximum extent Performs RBS, Malaria, US, Urine Albumin, Pregnancy tests Delivers RCH, Chronic Diseases and National Vertical Programs IT Backbone to ensure daily data transfer to central system integrated with HMIS and other Government IT systems 22 February, 20126Vinod A. Iyengar

7 Telephonic health advice 1.Instant identification of at-risk cases 2.Immediate referrals to appropriate medical institutions 3.Early warning system for epidemic out-breaks 4.Provided through telephone – so high penetration and accessibility 5.Easy access for callers that enables virtual handholding 6.Algorithm based for standardized medical advice (supported by qualified experts) 7.Real-time information and data collection, availability and retrieval 8.Promotes awareness on health issues, hygiene and Government health programs Telephonic health advice 1.Instant identification of at-risk cases 2.Immediate referrals to appropriate medical institutions 3.Early warning system for epidemic out-breaks 4.Provided through telephone – so high penetration and accessibility 5.Easy access for callers that enables virtual handholding 6.Algorithm based for standardized medical advice (supported by qualified experts) 7.Real-time information and data collection, availability and retrieval 8.Promotes awareness on health issues, hygiene and Government health programs Mobile health units 1.Not dependent on physical presence of doctors (can work with paramedics and ASHA/ANM based service where doctors are unavailable by connecting to telephone advise center) 2.Reliable, fixed-day service beyond 3 km from nearest PHC 3.Provides medical examinations, basic path-tests, tracking, referrals and medicines to patients (including expectant mothers, mother& child, chronic cases, etc.) 4.Instant identification of high-risk cases 5.Early warning system for epidemic out-breaks 6.High impact training and expert system for Healthcare Workers 7.Real-time information and data collection, availability and retrieval 8.Promotes awareness on health issues, hygiene and Government health programs Mobile health units 1.Not dependent on physical presence of doctors (can work with paramedics and ASHA/ANM based service where doctors are unavailable by connecting to telephone advise center) 2.Reliable, fixed-day service beyond 3 km from nearest PHC 3.Provides medical examinations, basic path-tests, tracking, referrals and medicines to patients (including expectant mothers, mother& child, chronic cases, etc.) 4.Instant identification of high-risk cases 5.Early warning system for epidemic out-breaks 6.High impact training and expert system for Healthcare Workers 7.Real-time information and data collection, availability and retrieval 8.Promotes awareness on health issues, hygiene and Government health programs 22 February, 20127Vinod A. Iyengar

8 22 February, 20128 Strategy for surmounting weakness Establish a self-sustaining chain of continuum of care through systematic telephonic health advice, MHUs and a system of franchisee clinics with path labs for delivery of primary and basic secondary care in regions where the public health system is weak (the proposed clinics not only include existing private clinics but also those that can be improved by standardization and robust management support) Vinod A. Iyengar

9 Telephone-based, health information, advice & referrals Monthly MHU service for monitoring, testing, referrals & drug distribution Curative care: Continuum of Care Clinics Curative care: Functioning PHCs/CHCs District/Private Referral Hospitals REFERRAL ENGINES Referrals 22 February, 20129Vinod A. Iyengar

10 22 February, 201210 Sophisticated hybrid model with strong integration to existing health system where appropriate – Mobile health unit (MHU) referrals to PHC – Doctor on MHUs to dispose cases on the spot – Core primary services Telemedicine at GP level backed by franchise clinics at Block level to handle primary and basic secondary care Telephonic advise center to provide state-wide backbone for assurance of care Sophisticated hybrid model with strong integration to existing health system where appropriate – Mobile health unit (MHU) referrals to PHC – Doctor on MHUs to dispose cases on the spot – Core primary services Telemedicine at GP level backed by franchise clinics at Block level to handle primary and basic secondary care Telephonic advise center to provide state-wide backbone for assurance of care Vinod A. Iyengar

11 Medical seats in India2011-12 MBBS41,569 Post-graduate20,868 Registered MBBS doctors2011-12 Practicing MBBS5,30,000 Non-practitioners10,000 Retired25,000 Total registered MBBS7,60,000 Other medical practitioners2011-12 Practicing AYUSH doctors5,53,000 Non-practicing AYUSH40,000 Retired AYUSH54,000 'Quacks' in India 25,00,000 Over 30,000 fresh MBBS graduates in 2011 22 February, 201211Vinod A. Iyengar

12 Mega-cities 1 mil. plus cities: CONTACT CENTRE 1 lakh + towns: Continuum of Care Clinics Class 2 towns: Continuum of Care Clinics Class 3 towns: Continuum of Care Clinics Class 4, 5 & 6 towns: TELEPHONE HEALTH ADVICE SERVICE and MHU VILLAGE SERVICE (Mobile Health Units) Villages: TELEPHONE HEALTH ADVICE SERVICE and MHU VILLAGE SERVICE Focus area 22 February, 201212 NOTE: CC clinics are proposed to be located in catchment areas – the exact location of each clinic will be determined by detailed market survey Vinod A. Iyengar

13 Top-up subsidy required for 2-3 years to ensure doctors earn handsomely. The subsidy will stop once clinic begins to earns more than Rs. 50,000 per month, which is expected to be by 3 rd year) Accredit clinics to provide all family planning procedures (FPP) and some minor surgical ones Ensure payments for above are timely through an escrow account Franchise clinics require strong management modules and robust referral engines to: – Screen and resolve majority of health needs at village or cluster level through a doctor or paramedic driven service – Provide appropriate referrals to the clinics in order to ensure high effectiveness and quality care for all referred patients Top-up subsidy required for 2-3 years to ensure doctors earn handsomely. The subsidy will stop once clinic begins to earns more than Rs. 50,000 per month, which is expected to be by 3 rd year) Accredit clinics to provide all family planning procedures (FPP) and some minor surgical ones Ensure payments for above are timely through an escrow account Franchise clinics require strong management modules and robust referral engines to: – Screen and resolve majority of health needs at village or cluster level through a doctor or paramedic driven service – Provide appropriate referrals to the clinics in order to ensure high effectiveness and quality care for all referred patients 22 February, 201213 It is envisaged that low-cost mobile health units will perform necessary screening, resolution and referral activities at the village level Vinod A. Iyengar

14 22 February, 201214 Villages and small towns supported by ASHA & AWW Combination of self-sustaining Telemedicine Centers (10 villages per unit) operated by RMP/ASHA and/or MHU Village Service covering app. 50 villages/unit Block level, self sustaining, franchise clinics with doctor, possible telemedicine link for specialists, and lab facilities. Integration with existing PHC/CHC system where possible Regional/State telephone-advice centers providing patient advice and HCW support as well as specialists for telemedicine & tele-trauma Curative care: Continuum of Care Clinics Villages & small towns Software algorithmsDisease summaries CounsellorsDoctors Patient database Vinod A. Iyengar

15 A PPP to be established with the Government/NRHM/others, which would: Motivate doctors into semi-urban areas with catchment of rural area by offering highly remunerative entrepreneurial alternative Arrange soft loans, financial subsidies, government incentives, 3-4 bed clinic facilities, etc., for young MBBS doctors for setting-up self-owned clinics in Class 1, 2 and 3 towns (clinics to also undertake family planning procedures and minor surgeries) Guarantee Rs. 50,000 per month (pre-tax) to the doctor/entrepreneur until the clinic becomes self- sustaining (in 2-3 years), and he/she starts earning Rs. 50,000 to over Rs. 1 lakhs per month Station senior doctors and specialist in a Contact Centre (preferably in the state capital or an appropriate 1 million plus population city) to assist the doctors during clinic hours (8 am to 8 pm) Arrange video and ICT links between clinics and Contact Centre Organise a reliable reference system between the clinics and pubic and private hospitals, together with 4-bed step-up corners (interim holding stations) in a general wards to ensure seamless and quick service Arrange appropriate management and administrative support for all the clinics in a state ICT driven telephonic health advice and MHU based out-reach programs to address acute minor illnesses, MCH, identify and refer patients with chronic diseases, and track patients in rural areas A PPP to be established with the Government/NRHM/others, which would: Motivate doctors into semi-urban areas with catchment of rural area by offering highly remunerative entrepreneurial alternative Arrange soft loans, financial subsidies, government incentives, 3-4 bed clinic facilities, etc., for young MBBS doctors for setting-up self-owned clinics in Class 1, 2 and 3 towns (clinics to also undertake family planning procedures and minor surgeries) Guarantee Rs. 50,000 per month (pre-tax) to the doctor/entrepreneur until the clinic becomes self- sustaining (in 2-3 years), and he/she starts earning Rs. 50,000 to over Rs. 1 lakhs per month Station senior doctors and specialist in a Contact Centre (preferably in the state capital or an appropriate 1 million plus population city) to assist the doctors during clinic hours (8 am to 8 pm) Arrange video and ICT links between clinics and Contact Centre Organise a reliable reference system between the clinics and pubic and private hospitals, together with 4-bed step-up corners (interim holding stations) in a general wards to ensure seamless and quick service Arrange appropriate management and administrative support for all the clinics in a state ICT driven telephonic health advice and MHU based out-reach programs to address acute minor illnesses, MCH, identify and refer patients with chronic diseases, and track patients in rural areas 22 February, 201215Vinod A. Iyengar

16 Enter into PPP with Government for easy flow of incentives (in bulk) for RCH services (especially Family Planning) to the clinics through designated agency Identify sites where clinics may be deployed Identify appropriate doctors/entrepreneurs for setting-up franchise clinics Facilitate soft-loans from banks Provide expertise in HR, finance, procurement, training, etc., to the clinics to ensure doctors are backed-up managerially and can concentrate on curative care Develop software for managing back office functions of the health system Integrate data flow with government HMIS for data and outcome sharing Enter into PPP with Government for easy flow of incentives (in bulk) for RCH services (especially Family Planning) to the clinics through designated agency Identify sites where clinics may be deployed Identify appropriate doctors/entrepreneurs for setting-up franchise clinics Facilitate soft-loans from banks Provide expertise in HR, finance, procurement, training, etc., to the clinics to ensure doctors are backed-up managerially and can concentrate on curative care Develop software for managing back office functions of the health system Integrate data flow with government HMIS for data and outcome sharing 22 February, 201216Vinod A. Iyengar

17 22 February, 201217 1. Telephonic Health Advice Centre a)The centre needs all capital/non-recurring expenditure to be funded by Government b)The centre will include: citizen triaging, healthcare worker support and telemedicine support c)It will be able to manage with a charge Rs. 12 per call (which can be suitably shared between the general public and the Government) 2. MHU Village Service a)Requires funding all through 5 years b)Doctors, sub-center ANMs, drugs and consumables will need to be provided by the Government separately 1. Telephonic Health Advice Centre a)The centre needs all capital/non-recurring expenditure to be funded by Government b)The centre will include: citizen triaging, healthcare worker support and telemedicine support c)It will be able to manage with a charge Rs. 12 per call (which can be suitably shared between the general public and the Government) 2. MHU Village Service a)Requires funding all through 5 years b)Doctors, sub-center ANMs, drugs and consumables will need to be provided by the Government separately Vinod A. Iyengar

18 22 February, 201218 4. Clinics Government support is required as follows: a)CAPEX: Rs. 9.25 lakhs (for 20 clinics) b)Doctor/entrepreneur support (for 20 clinics): 1 st year Rs. 100 lakhs; 2 nd year Rs. 65 lakhs 5. Management Overheads a)Management overheads include salaries and administration costs, and are to the tune of Rs. 60 lakhs per district in Year 1 and Rs. 17 lakhs per district in Year 5 6. Institutional Fee a)Process fee is required by designated agency of 5% of total recurring expenditure to finance process, software and monitoring costs 4. Clinics Government support is required as follows: a)CAPEX: Rs. 9.25 lakhs (for 20 clinics) b)Doctor/entrepreneur support (for 20 clinics): 1 st year Rs. 100 lakhs; 2 nd year Rs. 65 lakhs 5. Management Overheads a)Management overheads include salaries and administration costs, and are to the tune of Rs. 60 lakhs per district in Year 1 and Rs. 17 lakhs per district in Year 5 6. Institutional Fee a)Process fee is required by designated agency of 5% of total recurring expenditure to finance process, software and monitoring costs Vinod A. Iyengar

19 1.Telephonic Health Advice Centre a)Furnished operating space of 4,000 sq. ft. in each district to setup and operate the Health Help Center 2.MHU Village Service a)Provide necessary medicines and consumables to be dispensed through mobile health units on proper process and checks b)Provide parking spaces of 500 sq. ft. in nearby PHC/CHC for night halt and other back office activities 3.Franchisee Clinics a)Provide furnished space (including renovation if any) of 1,500 sq. ft. for each clinic in the designated areas either through defunct PHCs or other existing buildings b)Provide necessary medicines and consumables to each Clinic during the first 5 years of operation c)Where Government has functional PHCs that need to be strengthened through Telemedicine, all operating costs of such clinics can be managed within existing resources. NOTE: Additional resources needs (up to IT support) are already factored into the costs of clinics 1.Telephonic Health Advice Centre a)Furnished operating space of 4,000 sq. ft. in each district to setup and operate the Health Help Center 2.MHU Village Service a)Provide necessary medicines and consumables to be dispensed through mobile health units on proper process and checks b)Provide parking spaces of 500 sq. ft. in nearby PHC/CHC for night halt and other back office activities 3.Franchisee Clinics a)Provide furnished space (including renovation if any) of 1,500 sq. ft. for each clinic in the designated areas either through defunct PHCs or other existing buildings b)Provide necessary medicines and consumables to each Clinic during the first 5 years of operation c)Where Government has functional PHCs that need to be strengthened through Telemedicine, all operating costs of such clinics can be managed within existing resources. NOTE: Additional resources needs (up to IT support) are already factored into the costs of clinics 22 February, 201219Vinod A. Iyengar

20 1.Telephonic Health Advice Centre 1.Necessary approvals to release and activate 104 telephone number in BSNL in the district 2.Authorize 104 HHC to manage referral patients through the entire system for patient hand-holding and monitoring of at-risk patients 2.MHU Village Service 1.Authorize mobile health units to make and follow-up on referrals in catchment areas on designated medical conditions 2.Authorize MHUs to pickup and utilize Sub Center ANM and local MO or Ayush MO to travel with MMU on designated days 3.Form necessary teams to identify and resolve any missing gaps such as referral processes, maps, etc. 3.Franchisee Clinics 1.Accredit franchisee clinics to perform necessary Family Planning procedures and minor surgeries in the designated area 2.Reimburse franchise clinics as per existing guidelines for delivering Family Planning services 3.Allow clinical staff to undergo regular training on Family Planning procedures at Government facilities 1.Telephonic Health Advice Centre 1.Necessary approvals to release and activate 104 telephone number in BSNL in the district 2.Authorize 104 HHC to manage referral patients through the entire system for patient hand-holding and monitoring of at-risk patients 2.MHU Village Service 1.Authorize mobile health units to make and follow-up on referrals in catchment areas on designated medical conditions 2.Authorize MHUs to pickup and utilize Sub Center ANM and local MO or Ayush MO to travel with MMU on designated days 3.Form necessary teams to identify and resolve any missing gaps such as referral processes, maps, etc. 3.Franchisee Clinics 1.Accredit franchisee clinics to perform necessary Family Planning procedures and minor surgeries in the designated area 2.Reimburse franchise clinics as per existing guidelines for delivering Family Planning services 3.Allow clinical staff to undergo regular training on Family Planning procedures at Government facilities 22 February, 201220Vinod A. Iyengar

21 1.Escrow Account a)Escrow account (grant-in-aid, reimbursements, etc. for above) – all monies for 6 months operation to be deposited two months in advance) b)Three months working capital to be drawn in full for continuity of operations 2.Reimbursement Mechanism a)Utilization certificate will be submitted every quarter i.90% to be paid on presenting of UC ii.10% to be paid after District Head receives Performance Report through designated agency, provided the Performance Report is submitted to District Health Authority within 15 days of month end 1.Escrow Account a)Escrow account (grant-in-aid, reimbursements, etc. for above) – all monies for 6 months operation to be deposited two months in advance) b)Three months working capital to be drawn in full for continuity of operations 2.Reimbursement Mechanism a)Utilization certificate will be submitted every quarter i.90% to be paid on presenting of UC ii.10% to be paid after District Head receives Performance Report through designated agency, provided the Performance Report is submitted to District Health Authority within 15 days of month end 22 February, 201221Vinod A. Iyengar

22 Government support spread over 5 years: app. Rs. 17 crores/ district 22 February, 201222 Cost of operating & managing services in 1 district(Rs. 'lakhs) ServiceNo.CAPEXOPEX Year 1Year 2Year 3Year 4Year 5 Tel. Health Advice Centre1030120126132139146 MHU Village Service2050132139146153161 Franchisee Clinics20185184206234263287 Management overheads506063666972 Institutional fee002527293133 Total265521561607655699 Financial support required from Government (per district)(Rs. 'lakhs) ServiceNo.CAPEXOPEX Year 1Year 2Year 3Year 4Year 5 Tel. Health Advice Center1030120126996633 MHU Village Service2050132139146153161 Franchisee Clinics20910065000 Management overheads506063503317 Institutional fee002120151311 Total89433413310265222 Government share83%74%51%40%32% Vinod A. Iyengar

23 Telephone Health Advice Center Revenue generation from callers may be possible to the extent of Rs. 10 per call after negotiations with telephone/mobile service providers – but it is recommended that this option be explored in a phased manner once the service matures (2-3 years) MHU Village Service Most States already have MMUs, which can be co-opted - thus saving on Capex Patients visiting the vans could pay a small fee (say Rs. 30) – an option could be explored in a phased manner once the service matures, and people see value The sides of the vans, and the TV sets they carry, could be used to advertise commercial products for a fee – but the true potential can only be estimated after a detailed market survey, which is strongly recommended Continuum of care clinics Extra revenue could be generated through the sale of drugs (at a margin of say 10%) that are procured free-of-cost from the Public Health System – but the Government will need to authorise this Telephone Health Advice Center Revenue generation from callers may be possible to the extent of Rs. 10 per call after negotiations with telephone/mobile service providers – but it is recommended that this option be explored in a phased manner once the service matures (2-3 years) MHU Village Service Most States already have MMUs, which can be co-opted - thus saving on Capex Patients visiting the vans could pay a small fee (say Rs. 30) – an option could be explored in a phased manner once the service matures, and people see value The sides of the vans, and the TV sets they carry, could be used to advertise commercial products for a fee – but the true potential can only be estimated after a detailed market survey, which is strongly recommended Continuum of care clinics Extra revenue could be generated through the sale of drugs (at a margin of say 10%) that are procured free-of-cost from the Public Health System – but the Government will need to authorise this 22 February, 201223Vinod A. Iyengar

24 22 February, 201224Vinod A. Iyengar

25 ASSUMPTIONS: Clinic timings: OPD: 8-10 am & 4-8 pm Family planning procedures/minor surgeries6-8 am; 11 am - 1 pm and 1:30-3:30 pm Number of working days in a year 300 (assumed) OPD No. of OPD hours per day6 No. of OPD minutes per day360 App. time spent per patient (minutes)7 No. of OPD patients examined per day51 OPD patients examined per year 15,429 Family Planning Procedures/Minor Surgeries No. of FPP/MS hours per day6 App. time spent per procedure45 (minutes) No. of FPP/MS per day8 No. of FPP/MS per year2,400 Fees and other income OPD fee per patient per visitRs. 50per patient/visit Fee per FPP/MS (on average)Rs. 750average Pat-lab (@ consumables + 10%)Rs. 22,000per month Drugs (@ cost of drugs + 10%)Rs. 0per month 22 February, 201225Vinod A. Iyengar

26 CAPEX S. No.ItemCost(Rs.) ALOCATION SETUP COST 1Furniture1,50,000 2Washbasin3,000 3Electricals (fans, lights, inverter, etc.)60,000 4Communication (broadband, LAN, etc.)18,800 5Computers, scanner, printer, etc.82,500 6Path lab equipment1,27,500 7Miscellaneous clinic equipment3,02,750 Sub-Total (A)7,44,550 BOTHER COSTS 1 Share in detailed market survey6,600 2Travel & stay (60 days)90,000 3Contingency84,115 Sub-Total (B)1,80,715 GRAND TOTAL (A+B)9,25,265 22 February, 201226Vinod A. Iyengar

27 (At 100% capacity utilization) S. No.ItemPer Month (Rs.)Per Year (Rs.) 1Rent10,000 1,20,000 2Broadband Fee5,000 60,000 3Salary - Lab Technician8,000 96,000 4Salary - Pharmacist10,000 1,20,000 5Salary - Night Nurse10,000 1,20,000 6Salary - Day Nurse7,000 84,000 7Salary - Maid3,000 36,000 8Salary - Sweeper1,000 12,000 9Salary - Night Watchman4,000 48,000 10Water1,500 18,000 11Electricity2,500 30,000 12Stationery & postage1,000 12,000 13Consumables20,000 2,40,000 14Drugs0 - 15Communication Cost2,800 33,600 16Insurance 8,190 98,280 17Repairs & maintenance3,413 40,956 18Unforeseen expenses4,290 51,480 GRAND TOTAL1,01,69312,20,316 22 February, 201227Vinod A. Iyengar

28 CAPITAL S. No. SourceShareInterest paAmount (Rs.) 1Entrepreneur/doctor5%N. A. 46,263 2Designated agency5%N. A. 46,263 3Soft-loan from bank90%7.5% 8,32,739 TOTAL CAPEX 9,25,265 22 February, 201228 MEANS OF FINANCE (@ 100% Capacity)Months:1 OPEXShareInterest paAmount (Rs.) Entrepreneur/doctor67%N. A. 86,893 Working capital loan33%11.5% 42,600 TOTAL OPEX 1,29,493 Vinod A. Iyengar

29 TERM LOAN REPAYMENT & INTEREST Principal8,32,739 (bank loan) Interest rate7.5% per annum Pay-back7 years ItemYear 1Year 2Year 3Year 4Year 5Year 6Year 7 (Rs.) Opening balance8,32,7397,13,776 5,94,813 4,75,851 3,56,888 2,37,925 1,18,962 Repayment - 159,481 Balance: end 1 st half 7,73,258 6,54,295 5,35,332 4,16,369 2,97,407 1,78,444 59,481 Repayment – 259,481 Closing balance7,13,7765,94,813 4,75,851 3,56,888 2,37,925 1,18,962 --- Interest: 1 st half31,22826,767 22,305 17,844 13,383 8,922 4,461 2 nd half28,99724,536 20,075 15,614 11,153 6,692 2,231 Total Interest60,22551,303 42,380 33,458 24,536 15,614 6,692 Total re-payment1,18,963 22 February, 201229Vinod A. Iyengar

30 22 February, 201230 Margin Money for Working Capital(For 1 month at 100% capacity) ItemDaysBankTotalBankMargin (Share)(Rs.) Drugs 2575% - - - Consumables 2575% 2,800 2,100 700 Sub-total 2,800 2,100 700 Utilities 250% 4,000 - Wages & Salaries 300% 43,000 - Administration Overheads 300% 23,090 - Insurance 300% 8,190 - Repair & Maintenance 250% 3,413 - Accounts Receivable* 1590% 45,000 40,500 4,500 Sub-Total 1,26,693 40,500 86,193 Grand Total 1,29,493 42,600 86,893 * 15 day period assumed for funds transfer from Government for Family Planning Procedures Vinod A. Iyengar

31 PROJECTIONS OF PERFORMANCE, PROFITABILITY AND REPAYMENT ItemYear 1Year 2Year 3Year 4Year 5Year 6Year 7 Capacity utilization assumed40%50%70%90%100% No. of OPD patients expected per day2126364651 No. of FPP/MS* per day2467888 No. of OPD patients per year6,3007,80010,80013,80015,300 No. of FPP/MS expected per year9601,2001,6802,1602,400 Income(Rs.) From OPD 3,15,000 3,90,000 5,40,000 6,90,000 7,65,000 From FPP/MS 7,20,000 9,00,000 12,60,000 16,20,000 18,00,000 From 'path-lab' tests 1,05,600 1,32,000 1,84,800 2,37,600 2,64,000 From sale of drugs - - - - - - - Total Income 11,40,600 14,22,000 19,84,800 25,47,600 28,29,000 * Family Planning Procedures/Minor Surgeries 22 February, 201231Vinod A. Iyengar

32 ItemYear 1Year 2Year 3Year 4Year 5Year 6Year 7 Expenditure(Rs.) Fixed costs Interest on CAPEX soft-loan 60,225 51,303 42,380 33,458 24,536 15,614 6,692 Rent (incl. 10% escalation every year) 1,20,000 1,32,000 1,45,200 1,59,720 1,75,692 1,93,261 Salaries ( - do - ) 4,68,000 5,14,800 5,66,280 6,22,908 6,85,199 7,53,719 Broadband Fee ( - do - ) 60,000 66,000 72,600 79,860 87,846 96,631 Water ( - do - ) 18,000 19,800 21,780 23,958 26,354 28,989 Electricity ( - do - ) 30,000 33,000 36,300 39,930 43,923 48,315 Stationery & postage ( - do - ) 12,000 13,200 14,520 15,972 17,569 19,326 Communication Cost ( - do - ) 33,600 36,960 40,656 44,722 49,194 54,113 Sub-Total (Fixed Costs) 8,01,825 8,67,063 9,39,716 10,20,528 11,10,313 12,09,968 12,01,046 Variable costs Interest on working capital loan * 1,863 2,562 3,586 4,611 5,123 Consumables ( - do - ) 96,000 1,32,000 1,84,800 2,37,600 2,64,000 Drugs ( - do - ) - - - - - - - Unforeseen expenses ( - do - ) 20,592 28,314 39,640 50,965 56,628 Sub-Total (Variable Costs) 1,18,455 1,62,876 2,28,026 2,93,176 3,25,751 Total Expenditure 9,20,280 10,29,939 11,67,742 13,13,704 14,36,064 15,35,719 15,26,797 Earnings Before Depreciation & Taxes2,20,3203,92,0618,17,05812,33,89613,92,93612,93,28113,02,203 Depreciation (over 10 years) 81,901 Earnings Before Taxes1,38,4193,10,1607,35,15711,51,99513,11,03512,11,38012,20,302 * Includes 10% escalation per year 22 February, 201232Vinod A. Iyengar

33 CASH-FLOWS FROM OPERATIONSYear 1Year 2Year 3Year 4Year 5Year 6Year 7 In-flows(Rs.) Income 10,97,475 14,54,500 20,17,300 26,01,350 29,14,625 29,35,875 Out-flows OPEX 9,20,280 10,29,939 11,67,742 13,13,704 14,36,064 15,35,719 15,26,797 Nett Cash-flows from operations 1,77,1954,24,5618,49,55812,87,64614,78,56114,00,15614,09,078 22 February, 201233Vinod A. Iyengar

34 Item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Sources(Rs.) CAPEX Term Loan Margin46,263 Incremental Working Capital Margin34,7578,69017,37817,3798,68900 - do - Entrepreneur/doctor investment81,0208,69017,37817,3798,68900 - do - Working Capital loan17,0404,2608,520 4,26000 CAPEX soft term loan8,32,739 Cash-flows from operations1,77,1954,24,5618,49,55812,87,64614,78,56114,00,15614,09,078 Total (Sources)11,89,0144,46,2018,92,83413,30,92415,00,19914,00,15614,09,078 Application of Funds CAPEX9,25,265 CAPEX loan re-payment1,18,963 Receivables86,2501,07,5001,50,0001,92,5002,13,750 Total (Applications)11,30,4782,26,4632,68,9633,11,4633,32,713 Nett surplus/deficit58,5362,19,7396,23,87110,19,46111,67,48710,67,44310,76,365 Opening cash/bank balance58,5362,78,2759,02,14619,21,60730,89,09441,56,537 Closing cash/bank balance58,5362,78,2759,02,14619,21,60730,89,09441,56,53752,32,903 CAPEX soft-loan loan repayment1,18,963 Annual 'take-home' cash earnings1,01,3572,73,0996,98,09511,14,93312,73,97411,74,31811,83,240 Monthly 'take-home' cash earnings8,44622,75858,17592,9111,06,16497,86098,603 Monthly Government/NRHM support41,55427,24200000 Annual Government/NRHM support4,98,6433,26,90100000 NOTE: To make the scheme attractive, a top-up subsidy is required for two years to ensure the doctor/entrepreneur takes home at least Rs. 50,000 per month. The subsidy shall cease once monthly take-home earnings exceed this amount. 22 February, 201234Vinod A. Iyengar

35 22 February, 201235Vinod A. Iyengar


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