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Healthcare Goes Natural

Ayurvedic Healthcare is witnessing an exciting transition phase with organised healthcare players entering this market. Nancy Singh analyses the changing market dynamics of Ayurveda treatment

If your normal perception about Ayurveda is limited to spas and some herbal treatments from Kerala, then its time to rethink. The boardrooms of most corporate healthcare players are now reverberating with plans to set up huge medicities solely dedicated to Ayurveda. The pioneers of private healthcare - Apollo Group will also be a pioneer in this segment. This medicity is coming up near Pune that will offer ayurvedic treatment. It has signed an agreement with real estate firm, Hindustan Construction Co (HCC), to set up the medi-city inside the upcoming hill station, Lavasa in Maharashtra. "It's a joint venture between HCC and Apollo. The medicity is coming up over an area of 200 acres. We (HCC and Apollo) have pegged almost Rs 2 billion as the initial investment," says Ajit Gulabchand, Chairman and Managing Director HCC. "It would be a state-of-the-art health and wellness centre, including hospitals, research and development labs and long term care centres," says Raghav Rao, Vice President- Projects, Apollo Hospitals. Now, if a giant like Apollo is investing so much in Ayurveda treatment, it is indication enough about how bullish healthcare providers are about this segment. On the same lines of Apollo, another big player to tap this market is Hinduja Group who will foray into wellness by setting up the World Knowledge Centre (WKC). WKC will be built on the philosophy of multi-disciplinary approach to healthcare wherein traditional Indian system like Ayurveda, yoga and meditation would be integrated with modern medicine, so as to provide comprehensive healthcare to treat complete range of illnesses, whether they are chronic, stress oriented or lifestyle related. To authenticate its therapies, WKC would also be upgraded with a clinical R&D setup wherein the ayurvedic preparations would be clinically tested. The project would take 36 months to complete and the Group plans to spend almost $ 270 million that is approximately Rs 1200 crore, in this mega project. Says PC Sood, Project Head, WKC, "WKC will provide quaternary care health, have three hospital premises with a capacity of 900 beds, 200 suit, five to seven residential facilities for dependents with service apartments, modern plaza with lavish food courts, wellness centers and clubs, convention centre, R&D for advanced medical research, e-library and a helipad.” It would be equipped with state-of-art diagnostic centre and modern spas and wellness clinics. Initially, the Group will have only one such centre and subsequently more such models would be setup in each region in India. After the concept matures over a period of time, the Group plans to franchise it overseas.

Evolving Market

"We plan to set-up 40 hospital chains across India. We will position our services across the value spectrum, ranging from BoP patients to high-end patients" - Rajiv Vasudevan Founder and CEO AyurVaid

"The current market is estimated at $ 1 billion. The market is pushing the boundaries across the board with Ayurveda at its core" - Jitu Mehta President Kerala Ayurveda

It is estimated that the total market size of the Indian Ayurvedic market is Rs 500 crore and it is growing substantially between 8-10 percent, with the same growth rate targeted for the next five to 10 years. "The current market is estimated at US $ 1 billion. But the potential for growth is immense as we interact with consumers at the confluence of wellness and natural healing. The market is pushing the boundaries across the board with Ayurveda at its core," states Jitu Mehta, President, Katra Group- Kerala Ayurveda, a healthcare service chain which provides Ayurvedic products, therapies, resort experiences, and an academy learning mode. The Group has aggressive expansion plans locally as well as globally. It plans to roll out 50 clinics across India. Kerala Ayurveda currently has 30 clinics, predominantly in south India which are being revamped and modernised. In the US the company has three clinics and four academies that offer courses in Ayurveda. In the next two years, it intends to have a total of 10 units in US and would also look at entering Europe later. "We have infinite scope. Our touch points include 300 plus products and a national clinic network that is expanding rapidly. We opened clinics as far apart as Pondicherry and Delhi within six weeks, resorts, hospitals and centres across the US. Hundreds of students are trained in our academy in India and US," adds Mehta. Kerala Ayurveda's resort format, Ayurvedagram, will also be replicated in other locations within India initially. Mehta intends to make Kerala Ayurveda a global brand and introduce Ayurveda as a way of life. "I brought in a colored, carbonated drink into the country (Pepsi). If I can do that, I am much more comfortable propagating a healthy way of life. If I have brought in international brands into India, now I intend to make an Indian brand global," he states passionately.

The company has also tied up with Manipal Cure and Care (MCC) wellness centre at Pune to provide Ayurvedic services. "We are the only full spectrum, listed Ayurveda company in the world. We are integrated from herb farms to clinics in the US. We are a one stop wellness solution. MCC is a unique, very important route to reach urban, up market consumers," adds Mehta.

Madhavbaug Cardiac Rehabilitation Centre is a rehabilitation centre focusing only on cardiac diseases which is establishing itself all across Maharashtra and other states. "We have already covered almost whole of Maharashtra with centres in Mumbai, Nashik, Pune, Jalgaon, Sangli, Aurangabad, Kolhapur and many more to come in Maharashtra itself. Next states to be targeted will be Gujarat and Goa," informs Dr Rohit Sane, MD, Madhavbaug Cardiac Rehabilitation Centre, located in the outskirts of Mumbai. The list of groups looking for setting footprints across India does not end here. Kerala based AyurVaid Hospitals has a highly aggressive plan of setting up 40 ayurvedic hospitals across India from the current strength of two hospitals in Kochi. For its ambitious growth plans it has already attracted investment from the Private Equity firm Acumen which has announced an initial investment of Rs 4.5 crore. "We are one of the few chains that will focus on bottom of the pyramid with 70 per cent of its capacity focused on poor patients. There are two hospitals in Aluva and Cochin, Kerala that are functional and around 40 more will come up across India based on the hub and spoke model," beams Rajiv Vasudevan, Founder and CEO, AyurVaid. AyurVaid plans to leverage Acumen investments to expand its footprint and pioneer the development of a low-cost healthcare delivery system that focuses on preventive and curative care, as an alternative to the highly capital intensive and curative system presently used to treat chronic ailments. Acumen's initial equity investment will support AyurVaid's plan to open six more hospitals across the country in the next 12 months, including two 'AyurVaid Seva'(AV-Seva) hospitals that would exclusively focus on low income group (BoP) patients. AyurVaid has set itself the goal of 60 per cent of its bed capacity for patients from the middle and lower socio-economic classes. "AyurVaid's healthcare delivery model for chronic illnesses can be positioned across the value spectrum ranging from BoP patients to high-end patients from India and abroad, permitting a viable and profitable business model," believes Vasudevan.

Growth Drivers

Private Equity firm Acumen has invested Rs 4.5 crore in AyurVaid for its pan-India expansion plans

The reasons for so many groups flooding for ayurvedic healthcare are manifold. The growth drivers for this industry are not only the yawning gap of demand supply but the rising incidences of chronic diseases. The PWC Study for World Economic Forum's 'Working towards Wellness' programme highlights that deaths from chronic diseases will register a sharp increase from 3.78 million in 1990 to 7.63 million in 2020 accounting for 66.7 per cent of all deaths. Chronic diseases would be the number one killer in India. "The current growth rate of Ayurveda can be attributed towards lifestyle related disorders only, other disorders will obviously increase the count in the future," says Dr Sane, who solely focus on cardiac diseases.

The ayurvedic healthcare providers view this as a huge opportunity to grow as currently there is no cure available for such ailments as far as conventional medicine go. Agrees Vasudeven, "Modern healthcare delivery system has done a great job in diagnosis and cure of most illnesses. But chronic illness is one area where its advantages pale in comparison to traditional systems like Ayurveda. By infusing modern medical practices we are creating a reliable and replicable system akin to allopathy which will make Ayurveda the choice of millions with chronic illnesses over the next decade."

The second reason for alternative medicine to flourish is the paradigm shift of healthcare from curative care to preventive care. It is in this segment that systems like Ayurveda score well. The 'wellness trend 'is also gaining momentum in the healthcare, firstly because of the new aged well-informed consumer who is becoming health-conscious. Secondly due to inflation and ever-increasing cost of high-end medical care, people are ready to invest more time and energy in preventive healthcare products and practices. "This is causing a rapid increase in the demand for value added wellness products particularly the nutritional supplements (both in India and abroad). In India, lifestyle disease is already the prime killer mainly in cardiovascular disease and diabetes. Hence, healthcare is becoming expensive and Indians are taking to wellness and preventive healthcare practices in droves," agrees Ashutosh Garg, Chairman and Managing Director, Guardian Lifecare.

Business Models

Since the healthcare Ayurveda market is yet at nascent stage, the groups are experimenting with almost all kinds of models for expansion. Be it the hub and spoke model or joint ventures, tie-ups or franchisees—all the expansion routes are on the radar, depending on the target audience.

AyurVaid Hospitals will be establishing through the hub and spoke model, trying to reach maximum audience as possible. "We just opened a hospital in Bangalore and within a few months will be establishing a hospital in the city of Mumbai. The demand for such healthcare is huge with a population of 18 million people and not a single Ayurvedic hospital available. Hence, we are confident that we would survive well," informs Vasudevan. Since it is targeting the middle and lower-income groups by offering subsidised healthcare, the Group has tied up with leading insurance players to make the model economically sustainable by generating volumes. AyurVaid Hospitals is accredited by 12 of India's leading medical insurance service providers facilitating cashless Ayurveda medical management, subject to the terms of the underlying insurance policy. "In tying up with leading insurance players and standardising a low-cost and cross-subsidy model, it is a pioneering a way to bring affordable services to low income communities, increasing both the quality and the accessibility of treatment available" says Acumen Fund Country Director Varun Sahni.

Talking about tie-ups, leading Ayurveda healthcare services provider, Kerala Ayurveda is looking for expansion through a multi-pronged strategy. The tie-up with MCC is to target upmarket consumers. "Our current focus is large urban centres. The franchised clinic model has a potential for deeper penetration we have Dehradun and Vadodra on our map. The need for wellness is global. Wellness naturally has a very strong resonance. Our delivery skills at a local level are formidable. We will not be limited by geography - rather, we will be led by consumer pull. The description of our market is in integrated consumer reach. Wellness naturally can be within driving distance of 250 million consumers within five years. The products strategy will make us ubiquitous," reveals Mehta. As for Madhavbaug Group which has plans to open new centres all across Maharashtra and nearby states like Goa, it will expand on a stand-alone basis as well by the franchisee model. "Initial investment for opening a clinic is around five lakh (if the space is rental and not owned)," informs Dr Sane.

The companies also plan to increase their reach by complementing instead of competing with the allopathic doctors. It is the concept of integrated medicine that is catching up. "We heal patients referred to by hospitals, and it helps the hospitals to reduce their occupancy time," informs Dr Issac Mathai, Founder, Soukya, a holistic centre in Bangalore. They receive patients from Manipal Hospital, HOSMAT Hospital, MS Ramaiah Hospital and NIMHANS, Bangalore.

Re-Branding

Whilst the opportunity is immense so are the challenges. The number one challenge this traditional healthcare system is facing is its brand value. Most people still associate Ayurveda with rejuvenation and relaxation instead of a preferred module for hardcore 'treatment' option. "As Ayurveda is marketed as a preventive therapy by the wellness industry, people hardly know that it has got a great power to cure. The doctor themselves have hammered that it takes time to cure in case of Ayurveda. All these notions have been proven faulty at Madhavbaug, where a fatal disease like heart disease is treated in mere six days. We have been educating the masses how Ayurveda is helpful for the mankind in case of severe and chronic diseases," reacts Dr Sane. This feeling is unanimously echoed by all the Ayurvedic treatment providers who still feel that because of the way it has been marketed by tourism and hospitality industry, people still find it hard to believe that Ayurveda can be a first line treatment option. "It is the number one challenge the industry is facing. Because spas and wellness resorts are just a part of Ayurveda. It has to move beyond being a 'massage industry.' Also even in North India, the perception is limited to 'jadi-bootiwalas' and it is definitely beyond that. It is a matter of time that people would be aware of the curative powers of Ayurveda and who knows in the future that it may be a first line therapy treatment," believes Vasudevan. Too ambitious we may think, but fast forward a few years and maybe it would indeed be a preferred healthcare modality and no more it would be a case of Allopathy V/s Ayurveda but indeed Allopath vis-à-vis Ayurveda. It's ultimately the 'new' consumers who will decide the fate of the 'oldest' form of medicine.

nancy.singh@expressindia.com