Good Businesses 2013

Drink to good health

Healthpoint Services is addressing clean drinking water and healthcare needs in rural communities

The walls of Kashmir Singh’s two-room home are covered with religious images — calendar posters of Dera (sectarian) leaders brush shoulders with an image of Krishna that is cheek by jowl with a Guru Nanak print. But more than a shifting or wavering faith, perhaps the panoply speaks of Singh’s need for blessings from whichever deity is listening. The 26-year-old illiterate labourer shares his home with his parents, wife and two children, in village Mallan, Muktsar district, a stone’s throw from the lavish villas, glistening green fields and tractors that immediately come to mind when you think of Punjab’s farmers.

The most expensive item here is the stove and gas cylinder that Singh earned after months of toil at a zamindar’s land. He is the only earning member of the family and works 12 hours on farms or construction sites to make ₹200 as dyadi, the Punjabi word for wages paid for a day’s manual labour. Not surprisingly, falling ill isn’t an option. But it did happen some months ago. After a day of heavy unloading, Singh recalls, “my arms stopped working suddenly”. Travelling to the city is difficult on a nearly-empty pocket and government health services are erratic, at best. So he decided to give the telemedicine facility at his nearby E Healthpoint (EHP) a try. “I spoke to a doctor on the screen. He identified it as a nerve-related problem and prescribed medicines for two months.” Singh was back at work very soon, having paid ₹60 for the entire episode. While he was at EHP, he also signed up for 20 litres of purified water a day, for which he pays ₹80 a month. “It has helped reduce the pain in my hip.”

It’s not a placebo effect. The Green Revolution brought in widespread use of fertilisers, and farmers in Punjab, especially, took to indiscriminate application of urea to raise yields. The result: ground water across the state is dangerously high in contaminants. At Bathinda and Muktsar districts, it is as much as 3,000 total dissolved solids (TDS) against 150 TDS, the limit for drinking water. Private sewer lines — either because of the absence of municipal facilities or simply for convenience — add to the mess, since untreated sewerage mixes with the ground water. “High uric acid intake is causing joint problems in this belt,” says Kuldeep Garg, a retired government doctor who now works for Healthpoint Services from the Max Hospital in Bathinda city.

Garg is one of several doctors in Punjab and now Andhra Pradesh who offer their services for telemedicine consultations through Healthpoint Services. The social enterprise operates in 152 villages across eight districts in Punjab and 30 villages in two districts in Andhra Pradesh, providing telemedicine, pharmacy and basic diagnostics facilities as well as drinking water purified through reverse osmosis (RO) to poor rural communities at affordable prices. The startup is the brainchild of Amit Jain, whose decision to leave the mainstream corporate world to step into social entrepreneurship can be traced to a meeting in 2006 with the late K Anji Reddy, founder of Dr Reddy’s Laboratories.

“He spoke of his vision of delivering safe drinking water to all villages by 2020. A businessman of his stature thinking of a social goal compelled me to also do something in this direction,” recalls Jain, who went on to work at Reddy’s Naandi Foundation for three years, during which he met Allen Hammond. The self-confessed serial social entrepreneur, who is also one of the pioneers of the bottom of the pyramid concept, helped Jain give shape to his idea of combining healthcare and safe drinking water and raise finance; Hammond is now the executive chairman of Healthpoint Services, the company the two set up in November 2009.   

Angel investors put up the initial seed capital of $1 million and later, more investors came on board, raising over $3.5 million thus far. A key supplier, the Delhi-based Fontus Waters, which makes industrial RO equipment, invested $1.5 million and became an equity partner. “There is a need for providing safe drinking water to rural areas at affordable prices. Healthpoint Services has both, a sound business model and a team that understands the business,” says Sunil Ghorawat, MD, Fontus.   

Healthpoint Services kicked off its pilot programme in the Malwa region of Punjab, a socio-economically backward area with known groundwater problems. “It took us a full year to learn the situation there,” says Jain. The team proved to be quick learners, though. From eight in 2009, the number of EHPs and water points went up to 15 the next year, 95 by end-2011 and 129 in end-2012. Since its launch the company has provided more than 38,000 telemedical consultations, performed 23,000 diagnostic investigations, filled 40,500 prescriptions, given 3,500 Hepatitis B vaccinations and served safe drinking water to 510,000 users a day.  

More than local

With this track record in such a short span, it’s not surprising that the company’s business model has been the subject of much discussion and recognition. It’s been written about by Harvard Business School and won multiple awards, from Changemakers, the Genpact-Nasscom Social Innovation Honours 2012, Sankalp 2011, USAID Grand Challenge Award 2011 and the Tech Awards 2011, among others. While the focus is on combining healthcare and water, currently, Healthpoint has more exclusive water outlets. These 600-700 sq ft structures contain a storage tank, an RO machine and a pump for pulling up groundwater or municipality water where available. Each point has two or three employees who issue cans and cards to new customers and monitor usage. Land is leased from village panchayats or farmers for a nominal fee — ₹200-300 a month — but the investment in equipment means the cost of setting up a water point varies from ₹5 lakh to ₹8 lakh.  

Each customer gets a 20-litre can for ₹160 and pays ₹80 a month to fill the can once daily; home delivery costs extra. “Our overheads are very low. Even a capital investment of ₹6 lakh is reasonable. In a village of 12,000 people, for instance, it’s not more than ₹50 per head investment,” says Jain. The revenue model is simple: people pay for clean water, so the more people you get on board, the higher will be the revenue. So far, due to their sheer numbers and simpler operations, it is the water points that are bringing in the money. “Our water operations are supporting the health operations,” he confirms. 

But then, the health centres are more complicated. Each EHP is about three or four times the size of a water point, has a nurse/assistant who helps patients interact virtually with the doctor, a lab technician, pharmacist and a Village Health Woman (VHW, for providing door-to-door health services). There is also the investment in wireless network and equipment. 

Earlier this year, Healthpoint entered into a partnership with Max Healthcare through which two or three doctors from the group’s Bathinda hospital are available during the day on camera at eight EHPs; patients pay ₹25 per consultation. Each doctor can see 50-60 patients a day and follow-ups and physical examinations are conducted at monthly camps. Medicines for the pharmacies are sourced directly from drug companies and sold at upto 70% cheaper than the market price. Over 70 diagnostic tests are also offered at subsidised rates. Where required, referrals are also made to bigger hospitals. “The nurses are well-trained to handle patients. But if I have even 1% doubt, I refer them to hospitals or get tests done,” says Garg of Max Hospital, Bathinda.

At the Doda Healthpoint in Muktsar district, 66-year-old Harnej Singh has come in for consultation for the second time. The first time was for a drinking-related problem; this time, it’s earache. “The staff is very friendly and I don’t feel uncomfortable talking to the doctor over video,” he says. That’s because, Jain says, the doctors have been instructed to talk pleasantries for the first two minutes to help villagers relax. But it takes more than that to make such an enterprise work. 

Reality check

One of the hurdles Healthpoint faces is of changing mindsets. “Indians waste water and there is tremendous water contamination also,” Jain says. But, he also admits that in any village only 30-40% of the villagers buy water from a water point. How does he get around that? By educating them on the need for safe water and pointing to the cost advantage compared with bottled water (boiled water still contains TDS). “We are also addressing pack size issues by considering smaller volumes,” Jain says. 

It’s working to some extent. At a standalone water point in Goniana, a small town 15 km from Bathinda city, there’s a queue of people on bicycles and motorcycles waiting to fetch water in their cans. “My mother had frequent stomach problems when we used tap water. Now, she is much better,” says Jitender Pal, who switched to purified water some 18 months ago. Similarly, Baldev Raj Insa, a 55-year-old carpenter, says his knee pain has reduced considerably since he quit drinking tap water. And this is cheaper than buying water from private RO water suppliers, he adds.

At EHPs, the problems are more practical. Medicines are in short supply, broadband can be erratic, and if the backup gensets (needed because of the acute power shortage) stop running for whatever reason, services are affected (that’s a problem at the water point as well). There is also competition from local registered medical practitioners (RMPs) who may be licensed for alternative medicines such as ayurveda and homoeopathy but, in practice, also dispense allopathic medicine. Such RMPs are an integral part of most villages and offer credit as well. Their bills are also likely to be cheaper since they don’t usually ask for tests: at an EHP, the final bill could be as much as ₹200 (₹25 consultation, ₹100 medicines, ₹75 tests). Jain is working around that by offering more specialised tests such as for diabetes and hypertension, and vaccinations, setting up the EHPs as an alternative to visiting a big city doctor. At the Doda EHP, the VHWs are also reaching out to villagers above 30 years with free tests as a promotional activity. 

More can be done once the business breaks even. Healthpoint has been growing steadily since inception: FY13 revenue was ₹1.65 crore compared with ₹1.01 crore the previous year and ₹24.87 lakh in FY11. It may be another year and a half before the company is in the black but getting further funding may not be difficult and existing investors are in no hurry to cash out. In fact, Jain is in the US currently, seeking investors to pump in another $2-3 million to fund immediate expansion plans. In the near future, Jain wants to extend Healthpoint to Haryana, Himachal Pradesh, Uttar Pradesh and Karnataka. “We also want to offer new products such as feminine hygiene products, nutritional supplements and health insurance.”

To prove his social enterprise’s sustainability, Jain will have to convert thousands of villagers in the years to come. He doesn’t see why it shouldn’t happen. “Everybody spends at least ₹200 a month on recharging mobile phones. Why can’t we spend the same amount on health?” Meanwhile, a strapping young man is brought in on a tractor to the Mallan health centre. The nurse on duty examines his right leg, which has swollen to twice its size. As she administers basic first aid, the gathering crowd murmurs what’s wrong: he was bitten by a snake five days ago and he ignored it, seemingly for lack of money and access to medical aid. He is referred to a city hospital for further care. But he leaves behind an awful reality, that millions of poor in our villages lack access to basic medical care. Perhaps Jain’s firm will help fill a tiny portion of that gap.