Dear Shareholders,
Welcome to a young India with amazing possibilities. I have always believed that we
will prove to the world that the wealth of the nation has nothing to do with the quality
of healthcare, its citizens will enjoy. contrary to what you may be thinking, it is not
going to take 50 or 100 years. I believe that within the next 7 to 10 years, India will
achieve universal health care through health insurance that is affordable.
For over 70 years, we have been promised that we can get free universal healthcare with
taxpayers' money. Sadly, this is wishful thinking. We recently analysed developed
countries that have successfully implemented free universal healthcare with taxpayers'
money. There are three things these countries have in common. Firstly, all of them are
very small countries with population of few lakhs to few million. No large country,
including the United States of America, can afford free healthcare with taxpayers' money.
Secondly, all these countries have a very high tax-to-GDP ratio between 25% to 45%,
whereas our tax-to- GDP ratio is about 11.2%. Thirdly, all these countries are already
spending between 10% to 18% of GDP on healthcare while our Government spends about 2.1% of
GDP on healthcare. But we have an exciting alternative. We are in an enviable position to
offer health insurance that is affordable to all citizens.
Status of health insurance in India
There are three important stakeholders in healthcare delivery: hospitals, health
insurance companies, and patients. Unfortunately, hospitals do not trust health insurance
companies, health insurance companies do not trust hospitals, patients do not trust both
entities, and both entities do not trust patients. In any business, if the most important
stakeholders do not trust each other, that business has no future. This has to change.
Health insurance companies, hospitals and patients can learn to trust each other if we
build a different system.
Why your company became a health insurance company?
Every day I see between 60 to 100 heart patients in my OPD. Most of them come from
working-class and poor families. When I tell the mother of a child with a hole in the
heart that the surgery costs 2 or 3 lakh rupees, which she does not have, she breaks down
crying. It is the most humiliating experience for any parent to learn the price of their
child's life, and I see this many times a day. After this, she touches my feet and begs me
to save her child's life, saying that she can somehow arrange 1 lakh rupees to save her
child. This young mother inspired me to come up with a health insurance in which that 1
lakh rupees can instead pay for many years of premium that can cover the cost of
surgeries, including liver, kidney and heart transplants, for her entire family. About 15%
of the heart surgeries done in India are done by our group. Every day we see more and more
young people coming to the hospital with preventable heart attack. When we become a health
insurance company, we will work very hard to prevent people from falling sick or
developing a heart attack, because keeping people out of the hospital is good for a health
insurance business. That is exactly what our customers want. Today, when I tell a patient
that they require heart surgery, the first thing that comes to their mind is whether it is
really required. But when we become a health insurance company and tell the patient to get
the heart surgery done, there is no conflict since we are going to pay for the surgery.
When the customers and the company's interests are aligned, magic will happen. This is why
we became a health insurance company. Our aim is to offer affordable health insurance for
everyone and work very hard to keep our customers fit and healthy and out of the hospital.
Why your Company built a hospital operating system?
According to the Lancet Commission on Global Surgery, India needs to perform about 70
million surgeries a year. Unfortunately, India only does about 30 million surgeries a
year. Most of them are non-complex procedures, such as emergency C-section, surgery for a
burst appendix, and surgery for an open fracture. About 30% of all diseases require
surgical treatment. We believe that affordable insurance will usher in large-scale
infrastructure for surgeries, which in turn will take care of the medical treatment for
common illnesses at an extremely low cost. To reach the target of 70 million surgeries a
year, existing hospitals must double or triple their throughput. A massive increase in
throughput cannot happen without a hospital operating system like Athma and Medha AI that
we have developed in-house. Our hospital operating system allows us to function fully
paperless, gives the doctors full information about their patients, allows nurses to order
medicines on their phone, and helps our patients access all the medical history.
Acute shortage of nurses
Thanks to our Government's active intervention in the last 7 years, undergraduate and
postgraduate medical seats have virtually doubled. Today, India boasts nearly 110,000
undergraduate seats at 706 medical colleges. Thanks to the National Board of Examination,
postgraduate seats have also doubled to train more medical specialists. However, there is
still a shortage of trained nurses who are the actual caregivers at the bedside. Patient
care is planned by doctors but executed by nurses, which makes them the most important
care givers. While the US has 4 to 5 nurses for each doctor, India has just 1.8 nurses for
each doctor. This is the root cause of all the quality problems in healthcare. The
shortage of nurses in India is due to the shortage of nursing colleges. While there are
nearly 110,000 undergraduate seats in medical colleges, there are only 263,000 seats
available to train nurses. India requires at least 10 lakh seats to train nurses for our
country and the rest of the world.
Not Brain Drain, but Brain Gain
According to World Health Organization, there is a worldwide shortage of over 80
million healthcare workers and no developed country has plans to enhance the number of
training seats. When they face a shortfall, all the rich countries will poach nurses from
India. Instead of complaining about brain drain, we should see it as an opportunity to
train huge numbers of doctors, nurses, paramedics and give millions of Indians the
opportunity to run hospitals around the world. We produce over 24 million babies a year.
Irrespective of our policies, there is no way we can create 24 million new jobs next year.
All of us want poor people to become rich and have stable jobs. For you to understand how
poor families can become rich in just four years, I will give you an example. There are
over 100 nurses, most of whom are trained by us, working in our hospital in the Cayman
Islands, which is very close to the USA. Each one of them is remitting home at least H1
lakh a month, and these nurses are only 23 or 25 years old! Our Government must allow any
busy hospital with over 100 beds to start a nursing college. A hospital-owned nursing
college will offer hands-on training and these nurses will be extremely skilled even
before their graduation. The shortage of nurses is going to be the biggest challenge
Indian healthcare will face unless we wake up quickly and take remedial measures. And I am
very optimistic that our Government will recognize this opportunity to create millions of
well-paying jobs for our youth.
Dear Shareholders, we have always been contrarians in our industry. We believe that the
current model of delivering healthcare must change and we want to be the change agents.
Everything that we have achieved so far would not have been possible without your support
and blessings.
Have a healthy, happy, and prosperous year ahead.
With warm regards,
Dr. Devi Prasad Shetty
Chairman