Both Anoop and I were clear, while pursuing medicine, that we didn’t want to be one of those doctors who sit in clinic and see patients,” smiles Dr Anand Lakshman, founder and CEO, AddressHealth. Dr Anoop Radhakrishnan happens to be Lakshman’s junior from Mysore Medical College and now the co-founder at AddressHealth. Lakshman graduated from Mysore Medical College in 1999 and later pursued a post-graduate degree in public health from the Tata Institute of Social Sciences, Mumbai, graduating in 2001. The Bengaluru-based social enterprise, among other things, provides a host of paediatric healthcare services to 150 schools in Bengaluru and Hyderabad, covering 1.1 lakh school students, that includes annual health checkups, health education and infirmary services.
“There is a mandate around children’s healthcare in ICSE and CBSE schools and there is also a national programme — Rashtriya Baal Suraksha Programme dedicated to this,” informs Lakshman. CBSE recommends that its schools ensure good healthcare for students and ICSE mandates that its member schools must have healthcare facilities and check-ups for children.
Before AddressHealth, Lakshman worked with the World Health Organisation (WHO) as a consultant for a tuberculosis programme in West Bengal in early 2000. In FY09, when Lakshman started working for the project to scale up zinc treatment for diarrhea, he got a grant of Rs.92 crore from the Children Investment Fund and Melinda Gates Foundation to expand to Bihar, UP, and Gujarat. But while administrating that grant, Lakshman realised that for healthcare to create a wider impact, one had to come up with a market-based solution instead of depending on grants. “We cannot be dependent on grants or charity because each donor will have their own perspective and they would want things to be in line with their priorities.”
It was then that he started toying with the idea of providing preventive healthcare through a for-profit business model. Radhakrishnan also joined him around that time but he had already taken an entrepreneurial plunge much earlier. He had established companies called IndigoEdge (management consulting firm), HealthcareMagic (telemedicine) right after passing out from IIM-Lucknow in 2006 with his batch mates.
“Healthcare is stuck in the mainframe era of computing. When the general public thinks of healthcare, they think of large hospitals. The shift in mindset, that healthcare can be delivered at your doorstep, that it can be preventive or modular, has not yet happened,” points out Radhakrishnan. And AddressHealth is attempting to make that shift happen. “We wanted to move away from conventional model and proactively address healthcare”, he reasons. They chose paediatric primary care as their specialty. It was an easy choice to make since Lakshman had been working on child-health related programmes for five years and his wife was also a paediatrician. Lakshman, Radhakrishnan, and two others, Dr Jaykar Shetty and Dr Ashim DS, pooled in an initial investment of Rs.55 lakh. Lakshman and Radhakrishnan contributed Rs.2.5 lakh each, while the balance contribution came from Shetty and Ashim.
The company looked at the UK’s National Health Scheme (NHS) models for children and adopted them for the Indian demographic under a market-based model. School health under the NHS includes decentralised care, community-based mental health services with a community nurse and general practitioners. “India is a very young country and also a specialty crazy country. Paediatrics is unique in the sense that it is primary care, but at the same time a specialty,” says Lakshman. With children making up 27% of the country’s population, it was a good starting point for the company.
AddressHealth launched pilot programmes on chronic diseases advising parents on how to take care of children beyond the doctor’s prescription. “Initially our thought was that the doctor would write a drug prescription and then prescribe our programme. But doctors didn’t operate that way. So we learnt that we have to work directly with the community in some way,” recalls Lakshman.
A health education programme on asthma was launched in 2010. “We ran a programme in schools called ‘Asthma Absence.’ We went to schools and said since asthma is a leading cause of absenteeism, why don’t we make your school asthma-free?” recalls Radhakrishnan. The response from the school managements was positive. Bengaluru is known to be the Asthma Capital, thanks to its deadly combination of pollution and pollens with more than 50% children exhibiting asthmatic symptoms. AddressHealth ran a free programme in South Bengaluru where it screened 50,000 children, counseled 2,000 parents, and trained around 1,300 teachers and caregivers on how to manage an asthma-related emergency.
Post the programme’s success, schools were open to looking beyond asthma. So, AddressHealth devised a programme based on the WHO guidelines around the eight existing components (health services in school, health education, nutrition, mental health counseling, school environment, physical activity in schools, health promotion, and family and community involvement). In 2011, AddressHealth offered these services to 4,000 children across six schools. The school managements were not only willing to experiment with the offering. The findings from the programme gave AddressHealth a direction. “About 35% of the children had dental issues, 20% had vision problems, one in 7 needed mental health assessment, 40% children were underweight and 15% overweight,” recalls Lakshman. So, in 2012, it launched a full-fledged school health programme, covering 25,000 children across 26 schools in south Bengaluru.
The challenge for the founders was not only to win over school managements but also get them to actually spend on such programmes. “When you go and talk to a school management, the general outlook would be to avoid these costs, as there is no umbrella regulation. We are a disease-centric society. We think that taking sick children to the doctor is the right approach, but the concept of periodic checkups and prevention is still not rooted in India. When we pitch our idea, everybody says it is very good but do we really need to implement it?,” says Lakshman.
Pricing, however, played a huge role in converting many of the fence-sitters. The cost of all the programmes put together is Rs.500 per child per year. The annual health checkup alone is Rs.100 per child per year, it includes, head-to-toe examination, hearing and vision screening, mental health, nutritional assessment, and systemic examination. The results are then recorded electronically. “We have to pitch hard. Some schools tend to say parents will do this anyway. But what they don’t understand is that, for the parents to do all this, they will spend at least four to five hours visiting various clinics. In our programme, the child doesn’t spend more than one period, annually,” says Lakshman. Luckily the asthma pilot worked well for them. It gave the duo a chance to go to managements and talk. “From a total of 50 schools, six agreed to pay for our future programmes almost immediately,” recalls Radhakrishnan. That number has since grown to 150 schools covering 1.1 lakh children across two cities. By the end of FY18, AddressHealth plans to expand to 250 schools, covering 2 lakh children.
AddressHealth has also developed a health education programme with eight sessions (one class per month) based on the CBSE curriculum for classes I to VIII. The key objective of the class is not only to impart knowledge about body, mind, eating habits, diseases but also to inculcate healthy behaviour. Vijay Krishna Rajgopal, director and principal, Vidyaniketan School (Bengaluru), which has been running AddressHealth’s programmes for the past five years, says, “Earlier, the health records were provided on paper to each student but now they are being uploaded on cloud. It is easy for parents to access those records whenever they want. It is very important to have medical services in school so we have availed their infirmary service as well.” For its school health programme, the company provides a nurse who is supervised by a doctor and protocols are delivered through a video connection. It has also developed an entire programme around mental health. “We developed group-based workshops to tackle emotional issues where we screen children,” adds Radhakrishnan.
Initially AddressHealth started a comprehensive one-stop clinic for children in 2012. But after setting up three clinics, the founders realised it was challenging to sustain a brick-and-mortar business, which entails high real estate costs, doctor fees, and other overheads.
“On the other hand, our school health programme was thriving with 30,000 students. In 2014, we got our first institutional funding of Rs.1.5 crore from Unitus Seed Fund, and we decided to utilise the fund to enhance our offerings and engage better with parents,” says Lakshman.
Besides the seed funding and the initial funding of Rs.55 lakh, the company has raised Rs.1.97 crore from friends, family and angel investors, Meenakshi Garg and Rajiv Garg — an NRI couple. “When we invested in AddressHealth, what stood out for us was the entrepreneurs and team. They had extensive experience in child health and a strong desire to build products in a free market environment. We saw the ability to build a scalable healthcare business in the private sector and the opportunity is large in this space,” says Srikrishna Ramamoorthy, partner, Unitus Seed Fund. Last year, the enterprise got a big shot in the arm when Grey Matters Capital invested Rs.10 crore.
In November 2016, AddressHealth expanded to Hyderabad, and is now looking to expand to Pune and Chennai. The company also plans to move into tier-II cities with a population of over 20 lakh, such as Coimbatore and Vishakhapatnam. What started out as a three-member team in 2010, now is an 80-people enterprise.
As part of their expansion plan, AddressHealth is keen on improving nutrition for children and helping parents plan healthy meals for their children. “Our idea is not only to advise parents but also help them by developing an enterprise resource planning for school tiffins, to provide optimal solutions for mothers and children. We would like to help with meal planning, things like — you need to buy these things for this day, or 15 minutes recipes on their smartphone,”
In 2010, from a mere Rs.1.75 lakh, revenue has vaulted to around Rs.2.8 crore in FY17. The company expects to clock a revenue of Rs.5 crore in FY18. Besides the flagship product, the other sources of revenue are health education, community-based psychiatry services and school medical rooms. “We are well entrenched in Bengaluru and by 2020 we will be covering over 850 schools and 1 million (10 lakh) children across five cities. We will be catering to a mix of both middle income and low income schools,” says Lakshman. He expects the company to generate revenue of over Rs.20 crore by then. “Our products, on a standalone basis, are profitable but we would break-even on an overall basis when we cross a scale of Rs.10 crore.”
Ramamoorthy is confident that AddressHealth will manage to scale up the business as planned. “The founders understand the school health segment very well and have a good relationship within the school ecosystem. They now need to look at other areas within the same segment to offer new services,” says Ramamoorthy. After winning the first battle of establishing a market-based model around preventive healthcare, it seems like AddressHealth is well on course to meet its 2020 target.