'Future Perfect For Single-specialty Chains'

The popularity of single specialty healthcare centres is increasingly throwing up opportunities for emerging healthcare businesses, patients and investors alike, says Avnish Bajaj, co-founder and Managing Director at Matrix Partners India, to BW | Businessworld's Paramita Chatterjee. The VC firm portfolio includes Centre for Sight in the single specialty healthcare segment. This growth in this category is here to stay as the nature of the business is such that it turns out to be beneficial for all stakeholders.

The contours of healthcare has changed over the past few years throwing up opportunities for low capital and investment friendly business models in the single specialty/primary category? How do you think they will co-exist with multi-specialty hospitals?
Well, even as multi-specialty hospitals are here to stay, out-of-the-hospital single specialty chains will definitely witness a growth in the years to come. After all, they benefit all stakeholders alike, be it patients, entrepreneurs or for that matter even investors like us. As far as patients are concerned, for certain categories of healthcare procedures, it's always more comforting for them to walk into day care centres as they typically look less intimidating than tertiary multi-speciality hospitals. And of course, if patients flock these chains and doctor entrepreneurs tend to benefit and make profit, investors will naturally be interested. As I mentioned, the benefit of all stakeholders is key here!

So, what are the advantages of a single specialty and why should one opt for them instead of multi-specialty?
There are more reasons than one. One, in categories like eye care and dental care or woman and child care, people often opt for single specialty as a lot of healthcare procedures in these categories are not like massive ailments. Take for instance, a cataract surgery. It takes about 15 minutes for a standalone eye care chain to remove a cataract. Plus, the quality of doctors and attention that patients get in these chains are on par with multi-specialty hospitals. What's more, single specialty hospitals also offer end-to-end services to patients which are extremely convenient. In fact, several categories of single specialty chains have gained popularity with people. These include eyecare, dental care, woman and child care, among others. Today, the 'healthcare consumer' can no more be treated as a patient alone. With the rise of branded private hospitals across the country, there has been a major shift their attitude towards doctors and hospitals.

Centre for Sight, a single specialty chain where Matrix is the investor, has filed for an IPO. So, are you looking to exit the company?
I would not want to comment on it. It is for the company to decide when it wants to tap the IPO route and it depends on market conditions too.

What is the breakeven time for these single speciality chains when compared to multi-specialty hospital chains?
As far as the business side is concerned, single specialty healthcare works out to be less capital-intensive especially when compared with traditional multi-specialty healthcare where the cost of a single bed in the latter can go up to Rs 50-80 lakh. Also, the gestation period for single specialty for any project is low. Single specialty or day care centres are focused on niche areas where logistics and mechanics are completely different from multi-specialty hospitals. So all in all, yes, the breakeven is much faster. It can often be as low as 15 days to a month.