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Emerald Case Study: LifeSpring Hospitals: a social innovation in Indian healthcare Krishnadas Nanath

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LifeSpring Hospitals: a social innovation in Indian healthcare

Krishnadas Nanath

Krishnadas Nanath is a Doctoral Student at the Indian Institute of Management, Kozhikode, India.

1. Preface
One ne morning, Mr Anant Kumar chief executive of LifeSpring Hospitals Pvt. Ltd, was reecting upon his taxing days of giving shape to his dream social innovation project, LifeSpring. It was his passion towards execution of the dream that converted the ordeal into an odyssey. He was quite happy about his achievement so far, but one problem was hitting him constantly that morning. He wanted to see LifeSpring operating a large-scale with plethora of centers all over India. However, he was not sure if his existing business model would fetch him the required scalability and he wondered if LifeSpring could set an example in Indian healthcare sector. LifeSpring Hospitals Pvt. Ltd is an expanding chain of hospitals that provide high-quality health care to lower-income women and children across Andhra Pradesh. It is a 50-50 equity partnership between Hindustan Latex Ltd (HLL), a mini Ratna enterprise under Indias Ministry of Health and Family Welfare and the Acumen Fund, a US-based non-prot global venture philanthropy fund. About 100,000 Indian women die every year due to the lack of skilled care during pregnancy. Big players in the private sectors like Apollo Chains are highly expensive and out of reach. On the other hand, the level of free government hospitals is not up to the mark and often compromise on quality. Women are looking for better alternatives to give births, and hence an opportunity to serve the poor via an innovative business model was spawned. LifeSpring successfully identied the opportunity and took an oath to execute it to perfection. It started with small hospitals spread in Andhra Pradesh, each having a capacity of 20-30 beds designed to serve 10,000 low income patients. Recently, it has proudly set up eight hospitals (First Quarter, 2009) and delivered service to more than 40,000 low income people and has plans to launch 22 more such hospitals in next 20 months. LifeSpring has demonstrated exceptional management principles, some of them being the most innovative and attractive ones. The entire focus of LifeSpring is on one particular niche: maternal care. Some argue about its strategy of not adopting diversication, but LifeSpring has proved its point by actually turning out to be a protable business. The strategy of focusing on one niche has led to reduction in cost in terms of specialized doctors and the range of equipment needed to serve. Adding to the strategic strength of LifeSpring, its operations (management) is perfectly aligned with the organizations vision and quality is achieved via highly standardized procedures for maternal care service. The location of the hospitals is strategically chosen; being close to urban slums, they reduce the total cost incurred by the target customer to avail the service. An important dimension of the business model is the ability of LifeSpring to serve as a dual-purpose model for the bottom-line (bottom of the pyramid (BoP)). The service to poor is not only delivered in form of low-cost maternal services, but also by employing less qualied

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The author/s may have disguised names; nancial and other recognizable information to protect condentiality.

DOI 10.1108/20450621111123362

VOL. 1 NO. 1 2011, pp. 1-14, Q Emerald Group Publishing Limited, ISSN 2045-0621

EMERALD EMERGING MARKETS CASE STUDIES

PAGE 1

auxiliary nurse midwives, instead of graduate nurse midwives. Thus, providing an opportunity for the rural/poor women to earn income as a permanent employee is an added advantage to the low cost services. LifeSpring has demonstrated innovation in its nancial strategies that could provide some room to convert this noble cause to a protable business. Most of the LifeSpring Hospitals are taken on leases (generally long, 15-20 years) from players who could not run them. This saves highly on the land cost and it also raises its fund through donations from institutions like Google, Rockefeller Foundation, Bill & Melinda Gates Foundation, etc. Analysts have termed this model innovative, simple, and sustainable. However, will LifeSpring achieve its plans of rapid expansion and can this be a role model for replication in health care industry is the question to be answered. Anant Kumar chief executive of LifeSpring Hospitals Pvt. Ltd, reports certain challenges that the organization would face and the measures that could deal with the same.
At admission, LifeSpring provided us with a rate estimate and at discharge, we paid the same amount. We were really happy not to pay anything extra. From ayah to nurses, receptionist to doctor, everybody took a lot of care of my daughter and her baby[1] (Mother of LSH Moula Ali customer[2]). We are very happy with LifeSpring prices; it feels like we are paying the same prices that we used to pay 10 years back for health care services[1] (Mother of LSH Mallapur customer[2]) (Plate 1).

2. Maternal care in India: an alarming situation

Although India has made great strides since independence; fertility, mortality, and morbidity remains unacceptably high compared to other countries at similar income levels. Almost one third of Indian population lives in poverty. The effect of poverty on healthcare and vice versa is signicant (Radawan, 2005). Private sector has been lling the gaps of inadequate focus on maternal and child health. At independence, private sector accounted for just 8 percent of healthcare facilities. The gure has risen to 60 percent by the early 1990s. However, the cost of traditional private hospitals is out of reach of many Indians and there have been questions raised regarding the quality and legality of the health care as well as the exploitation of the poor. On the other hand, public hospitals free services often compromise quality, transparency, efciency, and attitude towards the customers. Women are increasingly choosing to give birth at a private hospital, but often have to take out loans or sell assets to nance their choice of receiving adequate care. This situation has given rise to three basic needs concerning the health care of the poor need for:
B B B

good quality of clinical care; affordable care; and focus on maternal and childcare [3].

According to a study conducted by World Bank on healthcare services, the burden of disease analysis indicates that all the states in India need to focus on Group 1 kind of diseases, the majority of which is comprised of maternal issues. Also, the highest incidence of lost disability-adjusted life years (DALYs) are in the 0 to four year category. For more information on the statistics involving maternal care issues refer Figure 1. The maternal mortality rate at 408 per 100,000[5] births is very high and normal delivery accounts for 23 percent of hospitalizations in India and obstetric care is the fth leading reason for Plate 1

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011

Figure 1 Maternal care statistics in India

The need to improve maternal and child health care DALY Lost per 1,000, Rurual Group 1 Group 2 Group 3 160.04 134.41 148.29 165.56 164.6 81.46 73.51 72.25 72.78 69.14 47.23 43.86 41.54 43.24 44.03 DALY Lost per 1,000, Urban Group 1 Group 2 Group 3 97.67 114.39 100.74 109.9 96.66 74.25 56.15 47.87 50.27 53.84 30.45 32.08 18.31 22.13 20.29

State Andhra Pradesh Punjab Maharashtra Karnataka West Bengal

Note: The DALYs lost per thousand, my major cause groups in rural and urban area Source: ASCI (2001) AP population of DALYs lost by age group 45-59 Group3 Group2 15-44 Group1

5-14

0-4 0 200 400 600 Source: Compiled from World Bank Report (2003) 800

outpatient visits. The United Nations estimates that at current levels of fertility and mortality, one out of every 55 women in India faces the risk of maternal death, compared with one in 80 in Pakistan and one in 610 in Sri Lanka[4]. As with other countries, most of the maternal deaths in India can be prevented. Many are due to a lack of appropriate care during pregnancy and childbirth added to the inadequate services for identifying and managing complications, according to the World Bank (Tinker et al., 2000). In the three years preceding Indias National Family Health Survey 1998-1999 (NFHS-2), 35 percent of pregnant women received no antenatal care: only marginally better than the 36 percent in the 1992-1993 NFHS[5]. The situation is worse in rural areas. A 2001 Population Council study in Uttar Pradesh, Indias most populous state, showed that fewer than half of pregnant women had sought any care (RamaRao et al., 2001). LifeSpring has taken on the challenge to provide innovative healthcare solutions for women and children at its newly designed facilities. Most importantly, LifeSpring provides high quality services at rates women can afford.

3. LifeSpring: background and organizational policies

LifeSpring Hospitals Private Ltd is an expanding chain of hospitals that provide high-quality health care to lower-income women and children across Andhra Pradesh, founded in 2005. LifeSprings small hospitals (20-25 beds) ll the void of high-quality maternal and child health care at affordable rates for Indias lower income population. In early 2008, LifeSpring transformed into a private company, driving its efforts to open ve new hospitals in that year and 30 across India by 2010[6]. The rst LifeSpring Hospital was birthed at Moula Ali, on the outskirts of Hyderabad (Capital of Andhra Pradesh, India) in December 2005. It was a small hospital but completely adhered

VOL. 1 NO. 1 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

to the quality standards. Anant Kumar, Chief Executive of what is now LifeSpring Hospitals Pvt. Ltd, wanted to expand the business and brand LifeSpring into a chain by replicating the model at Moula Ali. He went out in search of capital to back his idea, but all he could understand is that he kept running into a wall. Kumars idea was simple and novel. He wanted to give a new dimension to social innovation. He not only wanted to serve the BoP by reduced cost of delivery at high quality, but also wanted to employ midwives (generally low-income women) in LifeSpring instead of high-educated nurses. On top of all this, he assured prots as well. However, the rosy picture did not appeal the investors because the management practices did not appeal to them. They believed that the hospitals could turn protable only when there is enough diversication in services and economies of scale. However, diversication was not the strategy LifeSpring was aiming for. It had a clear focus on only maternal care and wanted to achieve economies of scale by replicating the model as chain of hospitals. According to the investors, successful hospitals dealing with similar service lines had high quality equipments and specialized doctors to ensure the best service to customers. However, LifeSpring wanted to provide high quality service to customers by using simple equipments and cutting down costs on specialized doctors (employing low-income midwives). Anant Kumar was condent about the LifeSpring business model and scalability of such hospitals and made numerous rounds at banks, nancial institutions and venture capital, or VC, rms. Much to LifeSprings disappointment, it found no buyers in this group of investors for its idea. The returns expectations of these investors were very high. The talks always boiled down to these numbers. They would say your business model is too good to be true. Show us that it can work, recalls Anant Kumar (Chaudhary, 2009). LifeSpring found investors, albeit not the typical VC funds. Social venture fund Acumen Fund Advisory Services India Pvt. Ltd, a non-prot venture fund, invested $1.9 million, or Rs. 9.5 crores, in LifeSpring, forming a 50:50 joint venture with HLL. The idea slowly became popular and established LifeSpring Hospital as a provider of cost-effective quality care, particularly in the area of reproductive health for the low-income population. Recently, LifeSpring is a name synonymous with hope for the underprivileged women of Hyderabad, who can now get medical help not only for themselves, but also for their children. From a modest beginning in 2005, LifeSpring has diversied into six hospitals. LifeSprings current locations include Moula Ali (Hyderabad), Mallapur (Hyderabad), Nellore, Vijayawada, Vanasthalipuram (Hyderabad) and Rajahmundry. Since inception, LifeSpring has delivered nearly 2,000 babies and registered more than 30,000 out-patient visits. Further demonstrating the customer demand, LifeSpring holds a 43 percent market share in its agship hospital on the outskirts of Hyderabad. It caters to families with household incomes between $2 and $5 USD per day, the bottom 60 percent of Indian population (Kachhap, 2009). Refer to Figure 2 for target customer identication. The web site of LifeSpring starts with a very impressive quote, Low-income women want affordable, dignied maternal care. LifeSpring is innovatively meeting the demand[7]. The mission of LifeSpring is to provide quality and affordable health care to women and children from lower-income households across India to enhance their overall well-being[8]. The mission has been derived from the existing maternal care problems in India as described in previous section. There is always a trade-off between cost and quality in private/public hospitals and hence women are looking for better alternatives (Datt, 2009). In this vein, pervading all that LifeSpring does is determination to provide customers with choices and care that recognize their dignity. Quality policy at LifeSpring is straightforward and simple. It says:
LifeSpring Hospitals exist to provide women and children with high quality health care at an affordable price. We commit to meet our customers needs and exceeding their expectations by making continuous improvements in all we do[8].

LifeSpring abstains from using the word patients in its mission/quality policy statements. The use of word customer reects its adherence to policies right from the scratch.

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011

Figure 2 Target customer information at LifeSpring

Urban India income pyramid (2004-05)

MHE': 16% >Rs 9,625 pm

Customers are from local slums, low-income housing colonies; most have daily wage job or run petty business. Typical household had five to six members Majority comes from 5 km catchment area (also focus on outreach staff); word-ofmouth has led to customers coming from 15-20 km distance as well. Proximity to hospital is one of the key criteria while evaluating alternatives. However, recommendation from the relatives/friends overrides the distance-LS staff Choice for delivery tends to be either at home or institutional. Consumer reach suggests LifeSpring customers are very satisfied with the service and price

MHE': Rs 4,575 Rs 9,625 pm MHE': Rs 2,500 Rs 4,575 pm

37%
LifeSpring B60 customers

33%

MHE': 14% <Rs 2,500

LifeSpring customers are B60 women who have household income of Rs 3k-7k/month Our customers Education level Source of income

22%

28%

33%

25% 7%

21% 29% 19% 16%

Little or no schooling Intermediate

10th class Graduate

Day labourer Petty business Private sector

Rickshaw driver Government

April 2008

Source: Collected from LifeSpring Corporate brochures and newsletters

The services at LifeSpring Hospitals include: antenatal care, postnatal care, deliveries (normal and caesarean), and family planning services. LifeSpring also provides pediatric care, including immunizations, diagnostic services, a pharmacy and health care education to the communities in which they are located (Reddy, 2009).

4. HLL Lifecare Ltd and Acumen Fund

LifeSpring Hospitals Private Limited is a 50-50 equity partnership between HLL Lifecare Limited (a government of India enterprise and formerly HLL) and the Acumen Fund, a US-based non-prot global venture philanthropy fund. Through the investment of HLL Lifecare Ltd and the Acumen Fund, LifeSpring formed into a private limited company in February 2008[9]. HLL Lifecare Ltd began in 1966, with its incorporation as a corporate entity under the Ministry of Health and Family Welfare of the Government of India. It was set up in the natural rubber rich state of Kerala, for the production of male contraceptive sheaths for the National Family Welfare Programme. While HLL is best known for its production of condoms (HLL has an annual production capacity of over 1 billion condoms), HLL today is a multi-product, multi-unit organization addressing various public health challenges facing India. They produce health care products, including condoms, blood bags, and contraceptive pills. It is the leading social

VOL. 1 NO. 1 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

marketing organization in India in the area of contraceptives, with a market share of over 65 percent in the rural and semi-urban markets. On the path of rapid growth, HLL has set its sights to be a Rs. 1,000 crores company by the year 2010 (Refer to Table I for more details on the balance sheet of HLL Lifecare Ltd). HLL has been declared a Mini Ratna company (A status assigned to reputed public sector companies in India) by the Government of India and also upgraded as a schedule B PSU[10]. HLL started the LifeSpring Hospital Chain as an initiative for creating access to good quality and affordable maternal and child care, for the low income population. The rst LifeSpring Hospital was launched at Hyderabad in December 2005 and also at Kanpur and at Agra in UP. The corporate prole of HLL says, Associate institutions like LifeSpring Hospitals have ensured that healthcare delivery reaches the underserved and vulnerable populace, at an affordable cost [11]. Acumen Fund is a US-based non-prot global venture philanthropy fund that invests in social businesses in the elds of healthcare, housing, water, and energy. Headquartered in New York, Acumen has country ofces in India, Pakistan, and Kenya. It provides patient capital to social enterprises who have demonstrated success at a local level[12]. As quoted in one of the issues of Outlook Magazine:
Acumen is more philanthropic than a regular venture capital fund. And it talks of providing patient capital than cheap capital. Its a non-prot global venture fund thats looking at issues of global poverty (Gupta, 2009).

Table I Balance sheet of HLL Lifecare Ltd as on 31 March 2009

Balance sheet as on 31 March 2009 Sources of funds Shareholders fund Share capital Reserves and surplus Loan funds Secured loan Deferred tax liability Total Application of funds Fixed assets Gross block Less: depreciation Net block Capital work-in-progress Investments Current assets, loans and advances Inventories Sundry debtors Cash and Bank balances Other current assets Loans and advances (A) Less: current liabilities and provisions (a) Current Liabilities (b) Provisions (B) Net current assets (A-B) Control A/C Total Source: www.lifecarehll.com (Rights to information act section) (Rs. in lakhs) 2008-2009 2007-2008

1,553.50 11,249.99 9,469.17 143.36 22,416.02

1,553.50 10,688.95 6,669.94 100.14 19,012.53

16,293.74 9,004.05 7,289.69 3,541.53 10,831.22 506.70 0.00 6,130.51 13,235.80 5,504.47 373.62 3,059.50 28,303.90 16,554.99 670.81 17,225.80 11,078.10 0.00 22,416.02

13,967.92 8,336.52 5,631.40 839.15 6,470.55 308.45

4,338.32 12,954.38 1,644.80 426.57 2,961.20 22,325.27 9,632.57 459.17 10,091.74 12,233.53 0.00 19,012.53

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011

This description essentially demonstrated the vision of Acumen Fund. In making investment decisions, the Acumen looks at both nancial return and social impact. It has a much focused investment strategy which primarily deals with innovative and market-oriented ventures in health, water, housing, energy, and agriculture[13]. Acumen Fund is going easy as of now on LifeSpring. In line with its goals, it is not in a hurry with LifeSpring. It is not looking at 30-40 percent returns and a quick exit. Acumens India Country Manager, the boyish-looking 35-year-old Varun Sahni, is categorical that he is rather happy to be a long-term player with a 6-8 percent return. We will wait for dividends from this chain of hospitals (Gupta, 2009), he says. However, the concern here is the management, survival and growth of Acumen with such low returns. It raises funds through donations from institutions such as Google, Rockefeller Foundation and others. Nearly, half of the $20 million that Acumen has invested in India has been in the healthcare sector alone, say Sahni. Thirty hospitals is LifeSprings immediate expansion plan. But what, asks Sahni, prevents it from looking at 200 in ve years? Yes, the model sounds good, as Acumen is not expecting immediate returns; but the Sahnis question raises concerns over long-term returns. Acumen Fund has set a goal of making $100 million in investments, touching 50 million lives.

5. LifeSpring: a social innovation

To most effectively and sustainably meet the customer demands, LifeSpring has developed a market-based strategy to meet their social mission. This pioneering model is simultaneously commercially viable (for prot) and is successfully opening opportunities and improving quality of life for its customers. The market-based strategy aims at capturing and aligning the ambition, reputation, opportunity, and capacity of an organization. The process behind the strategy is straight and simple. The users of LifeSpring are its customers, not patients. Everything that our team does revolves around treating women as customers. After all, pregnancy is no disease. So, why should we call them patients? (Gupta, 2009) says Anant Kumar, CEO-LifeSpring. It understands the need of quality and affordable service and aligns the entire process/operations to meet the goals of LifeSpring. Goals at LifeSpring, as stated in its corporate brochure are twofold. It aims at achieving twin goals of commercial viability and social impact in a number of innovative ways. However, a deep study on the innovation methods would reveal that the goals attained by LifeSpring are threefold. The third dimension is the rural employment. LifeSprings innovative model does not use specialized doctors and highly educated nurses, as its focus is only on maternal care. Therefore, it employs midwives who are not educated enough, but can be given simple training to perform their job roles. This increases the employment opportunities for such women, who otherwise would have struggled to earn their basic living. The concept of using more auxiliary nurse midwifery[14] nurses than graduate nurse midwifery was less expensive and less demanding as these nurses were only trained for birthing (Kachhap, 2009). This in turn leads to low attrition rates. There are different aspects of management (operations, nancials, human relations, IT) involved in the innovative model of LifeSpring to achieve its goals. All these aspects have a unique thinking and bold attempts in management practices that have resulted in what the world says, Social Innovation. One of the most important management aspect demonstrated by LifeSpring is quality innovation. They focus on a particular niche of maternal health and achieve high quality within that niche through highly process-oriented method, which has been recognized with ISO certication. As quoted by Modern Medicare:
Even though the hospital follows the low pricing policy, it does not compromise on service quality. It uses the latest equipment and techniques like the Siemens ultrasound, and handles difcult cases like high-risk pregnancy with ease.

To ensure its quality standards, it appeals to its customers and employees using video training mode. Mumbai (Mumbai, formerly Bombay, is the capital of the Indian state of Maharashtra) lm-making company Global Rickshaw created a short video to educate LifeSpring customers and future employees on its unique customer service policy.

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The quality standards alone will not sufce the goal of social innovation. It needs to be accessible to the customers intended. Hence, LifeSpring chooses the location of its hospitals with uttermost care. There are different aspects being considered for the location in terms of accessibility, catchment areas, etc. The hospital sites we secured are excellent locations in terms of accessibility of location, transport facilities, catchment areas, building infrastructure, and reaching our target customer segment, said V. Giridhar, the head of projects at LifeSpring who is spearheading the scale-up efforts. Once the access is ensured, the pricing model needs to be effective to contribute to the social cause. They follow cross-subsidy model of tiered pricing for in-patient care. Women can choose to give birth in a general ward (less than 30 to 50 percent of prevailing market rates), semi-private room, or private room (equivalent to market rates). It attains its economies of scale by reaching out large population resulting in signicant savings to patients due to the sub market pricing policy. LifeSpring Hospitals Charges 1/6 of the market prevailing prices for deliveries. For example, it charges only Rs. 1,499.00 ($35) for a normal delivery compared to a average prevailing market price of Rs. 5,450.00 ($120). A detailed comparison of the pricing model compared to other alternatives is given in Figure 3. The focus of LifeSpring on maternal care has resulted in several benets. This strategy cuts down on the need for many specialist doctors, and also on the range of equipment needed. We are very clear, says Kumar. We will refer the more difcult cases to other hospitals around us, even if it means turning away customers (Gupta, 2009). The approach used by LifeSpring to attain this high focus is a highly standardized, specialized, no frills offering that relies on high volume and low unit costs to reduce prices a model that has succeeded in other sectors, including telecommunications (Karamchandani et al., 2009). Specializing solely in inpatient gynecology and obstetrics, leads to easy standardization. LifeSpring has over 90 standard procedures including standardized surgery kits and clinical protocols. For more information on standardization procedures refer Figure 4.

6. LifeSprings innovation: carrying it forward

LifeSpring believes that the business aspects of the social innovation like nance, marketing, and operations should be strong enough to support the social innovation model. This ensures that the model is successfully implemented and the goals are met. It attributes innovation as one of the key drivers to frame the strategies of various business aspects. The no frills and no diversication policy helps the organization cuts costs by standardizing its procedures, trimming its expenses, increasing volume, reducing staff attrition rates, and using a cross-subsidy model for three types of wards. Additionally, it has dramatically increased the typical hospital use rates of key assets ranging from diagnostic machines to the obstetricians themselves. As quoted by a report on emerging markets:
LifeSpring Hospitals are strictly no-frills: No canteens, outsourced pharmacy and laboratory services, rented rather than purchased properties, old hospital buildings rather than new ones. Most beds are in general wards, with basic furnishing and no air-conditioning.

Figure 3 Delivery charge comparison

LifeSpring price comparison with possible alternatives (Rs.)
16,000 Normal deliviery 12,000 810 K 20,000 30,000 Caesarean section 2030 K

Rs.

8,000 4,000 1.5 K 0 Lifespring1 3001 K Govt. Hospitals Pvt. Clinic

Rs.
10,000

6K 1.52.5 K Lifespring1

Govt. Hospitals

Pvt. Clinic K = Rs. 1,000

Source: Collected from report on emerging markets, Karamchandani et al. (2009)

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 1 NO. 1 2011

Figure 4 Standardization protocols and quality

Specializing solely in inpatient gynecology and obstetrics, leads to easy standartization. LifeSpring has over 90 standard procedures including standartized surgery kits and clinical protoclos. Many are ISO9001-certified, guranteering the quality of hospital procedures. Some of the key protocols used in LifeSpring hospitals are (a) Access, Assessement and continuity of care (b) Patient Rights and Education (c) Care of Patient (d) Management of Medication (e) Hospital Infection Control (f) Facility Management and Safety (g) Human Resource Management (h) Hospital Operation System, and (j) Hospital Clinical System. LifeSpring uses a narrow range of drugs and equipment for large numbers of repeat procedures and thus bulk-purchases standard equipment and generic medicines. Standardization also enables it to use Auxiliary Nurse Midwifery nurses (ANMs) in a addition to more expensive General Nurse Midwifery nurses (GNMs) for matemityservices, the skill sets of both classifications of nurse are the same 39. But because ANMs have a lower level of qualification, they are less costly to employ than GNMs, whose degrees are more advanced and expensive to attain. Source: Karamchandani (2009)

The nancial alignment to the innovation model is also demonstrated by the salaries of doctors at LifeSpring. They earn xed salaries rather than the variable consulting fees of their private clinic peers. Doctors nevertheless have strong non-monetary incentives for example, less administrative duties, more clinical practice to stay. Regarding the spending on infrastructure, Kumar says Most LifeSpring Hospitals are taken on long leases (15-20 years), from players who could not run them. The lease model saves hugely on land costs. Refer Figure 5 for gaining insights on nancial strategy of LifeSpring demonstrated via asset utilization in LifeSpring compared to other clinics. LifeSpring gives considerable importance to marketing approach that could carry forward the social innovation. LifeSprings marketing approach is multi-faceted, consisting of its outreach teams, voucher programs, health camps, and word of mouth. To generate high patient volume, it targets key decision-makers in maternity matters husbands and mothers-in-law and has a dedicated (and persuasive) community outreach team that customizes its message depending on whether the woman has had an institutional delivery before, and if so, where. It also focuses heavily on customer retention and referrals even operating a pull program that gives every inpatient a voucher, good for one out-patient visit, to distribute to friends and family. The low-cost outpatient department plays a vital role in attracting mothers by providing a showcase for services, including womens health and pediatrics. A visit costs Rs. 50 ($1) in contrast to a private clinics Rs. 100-300. Moreover, there is a price list displayed outside the hospital, creating consumer awareness, Figure 5 Asset utilization at LifeSpring
LifeSpring asset utilization is more than five times that of comparable private clinics Average number of deliveries/month Cost of doctor/patient 1.21.8 120 1.8 100110 100 80 Number 60 40 20 0 1520 US$ 1.5 1.2 0.9 0.6 0.3 0.30.5

0.0 LifeSpring Private clinic LifeSpring Private clinic Note: Private clinic refers to small 20-30 bed nursing homes, often run by a family Sources: Lifespring Hospital, monitor analysis; collected from report on emerging markets

VOL. 1 NO. 1 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9

and condence of transactional transparency. Targeted marketing via multiple channels and its dedicated staff has contributed to high throughput in the hospital. Thus, the delivery model is based on setting up a chain of LifeSpring Hospitals across India primarily focused on poor population in urban slums. The model consists of:
B B B B B

setting up small-sized mid-market hospitals; affordable pricing; quality innovation; focus on maternal care: niche; and leveraging upon internet technologies and IT.

Though the social responsibility is embedded in the vision of LifeSpring, it does not shy away in carrying out extra social roles. It works upon corporate social responsibilities (CSR) to build its brand image and align these activities to the mission of LifeSpring. These initiatives include celebrating special occasions like mothers day, where mothers are invited to get an awareness of health education and also to know about LifeSpring. This demonstrates how the CSR is aligned to their vision of LifeSpring (For information on CSR responsibilities, refer Figure 6-CSR).

7. Key operational partnerships

LifeSpring attempts to make tie ups with national and international vendors for supply of medical equipment. These tie-ups at national and international level helps them in negotiating a better price for their hospitals, leveraging the economies of scale. It is also pertinent to note that in the next ten years the requirement for doctors, nurses, and other para-medical staff in the country is expected to record tremendous increase. According to an estimate, about 350,000 additional nurses would be required in the country by 2015. Keeping this in mind, LifeSpring is developing strategic tie-up with nursing colleges across India to source nurses for their hospitals. They are also developing tie ups with various state and central government health schemes. LifeSpring hospitals would also be used for routing government schemes to patients who are below poverty line. A number of centrally sponsored schemes currently operational like Janani Suraksha Yojna (mother protection scheme) would be linked with the LifeSpring network. Innovative schemes implemented by the state government like voucher scheme would also be linked to the network (Kumar, 2007). To improve the reach of the hospital services, LifeSpring hospitals are also networking with sponsored mobile health clinics and emergency transportation system.

8. Harnessing the power of social media

LifeSpring has innovatively developed models that have attracted the attention of analysts on the use of internet and social media networks to mobilize funds to meet its objective. It utilizes the internet/social media platforms of both HLL Lifecare and Acumen to spread Figure 6 CSR at LifeSpring
LifeSpring Celebrates Mother's Day Families have fun while learning about women's health LifeSpring's first-ever Mother's Day Health Fair was a great success. More than 100 families received free health education and learned about LifeSpring. As a maternity and child hospital, LifeSpring wanted to recognize local mothers on this important holiday. The May 11 event was timed with the weekly free child vaccinations and publicized through outreach workers and the local newspapers to ensure a good crowd. Families showed great excitement at the opportunity to get a free family portrait taken. LifeSpring hopes the colorful photographs remind families for years to come that they are valued customers. Nurses measured people's weight, pulse and blood pressure and answered health-related questions. And families entered a contest to win free diapers from MedPlus Pharmach. Source: Snapshot from LifeSpring Newsletter

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awareness and raise funds. Acumens blog space has been utilized to demonstrate the life at LifeSpring to the entire web community (Desai, 2009). It also uploads videos in YouTube (www.youtube.com/watch?vsKltomSjfvA.) and the relevant blog spaces to inform about the mission of LifeSpring and to spread awareness of the social issues. It recently started its community on Orkut (A free-access social networking service owned and operated by Google) for getting the likeminded people/well-wishers on one platform. The most exciting part of harnessing the internet space by LifeSpring is the use of a very special section named sponsor births in its web site. LifeSprings sponsoring births initiative aims to reach the most underserved individuals in society. The web site quotes: For the cost of a tank of gas, a pair of jeans, or a dinner out for two, you could collaborate with us in a direct and meaningful way: $40 USD pays for a woman to give birth at LifeSpring who otherwise would be unable to access our care[15].The scheme is not limited to sponsoring alone; it extends to motivating people to throw sponsor birth parties and conduct mothers day celebration using the materials available in its web site[7]. For more information on materials available, refer Figure 7.

9. LifeSpring: sustainability and scaling up

LifeSprings business model is one-of-its-kind; it aims to serve as a model for providing high-quality maternal and child health services to the poor in India as well as worldwide. It has wisely chosen an un-serviced customer group and high prevalence need pregnancy to base its business on. Its focus on a particular niche of maternal health with high-quality standards through its process-oriented methods has been its important differentiator, and has contributed immensely to its success. M Neelam Kachhap, a health care journalist quoted the business model of LifeSpring as Simple, Sustainable and Innovative model (Kachhap, 2009). The organization achieves this by respecting its customers, high standardization and no compromise on quality. The business model is perfect to achieve its goals in the form of social impact, rural employment and commercial viability as well. Through these innovative methods, LifeSprings model allows rapid scale up. Its fast growth trajectory since 2005 has demonstrated its ability to scale up (refer Figure 8 for progress Figure 7 Harnessing the power of internet/social media
Sponsoring Births Party Come celebrate what we can do!
LifeSpring Hospitals is putting health care choice in the hands of low-income mothers and welcoming their babies into the world with dignity and quality care.

Media
Why throw a LifeSpring party?
We get excited every time a donation to sponsor a birth makes its way halfway around the world and lands in our office. The impact that can be made by sponsorships from a crowd of inspired LifeSpring friends is huge, though. Hosting a party is also a great way to spread the word about LifeSpring's work and keep expanding the community of people across the world motivated to make LifeSpring's model a global reality for women and their children.

You're invited to a LifeSpring Sponsoring Briths Party, where we'll learn about the pioneering way LifeSpring is addressing the maternal care crisis in India and make a difference from many miles away! Party details Date and time Host Address Phone Email !

How do I throw a LifeSpring party?

You can tailor a LifeSpring party in any way that inspires you! If you want a little prompting, here are some things to think about: Who to invite: Friends, family, colleagues, neighbors, fellow members of book clubs, play groups, PTAs, sports teams, community organizations, you name it! All are great invitees. Party themes: Having a straightforward LifeSpring fundraising party is fantastic. If you want to jazz things up a little, here are a few theme ideas. Mother's Day Party (Just for moms, or a mother-daughter party) Baby Shower (what better blessing could you give a friend than by celebrating her pregnancy through sponsoring LifeSpring births?)

Please reply via phone or email by

Brunch for Babies (host a family-friendly brunch to support LifeSpring babies) Indian Food Feast (Join LifeSpring in the work we do and the food we eat! Local restaurants will probably cater at a discount if you explain the cause) Logistics: We'll send you apackage of electronic materials, but not minute by-minute details, because want you to have flexibility to support LifeSpring in whatever way suits your style, preferences, and budget. If you have questions, though, don't hesitate to contact Aliza at alizakreisman@gmail.com.

VOL. 1 NO. 1 2011 EMERALD EMERGING MARKETS CASE STUDIES PAGE 11

Figure 8 Rapid growth at LifeSpring

Rapid growth Total IP & OP cases April 2006 April 2007 April 2008 0 Births April 2006 April 2007 April 2008 0 Bed occupancy rate April 2007 April 2008 28% 65% 80% 100% 27.5 53.0 82.5 20 37 102 110.0 500 1,000 456 969 1,656 1,500 2,000

0% 20% 40% 60% Source: Collected from LifeSpring Newsletter-4

reports). Rigorous attention to metrics and adherence to quality protocol system ensure that LifeSprings expansion and high quality are achieved simultaneously. As costs decrease with scale, high-care volume, and a well-organized system, LifeSpring is proving to be a long-lasting model with long-term social returns. The scale up of LifeSpring hospitals would take place in two stages Stage-1: 30 hospitals (2007-2010), Stage-2: 140 hospitals (2010-2012). The rst 30 hospitals would be set up in three states namely Andhra Pradesh, Maharashtra, and Karnataka [8]. Throughout these years, the LifeSpring staff will grow to approximately 4,500, and over 100,000 women will benet from LifeSprings services in Andhra Pradesh, Maharashtra, and Karnataka, says Anant Kumar. The LifeSpring team will number 200 at the end of 2008, and 1,200 by the time 30 hospitals are running in 2010. For each new hospital, roughly 25 employees are hired for positions, including administrators, doctors, nurses, medical director, and security.

10. Future and challenges ahead

LifeSpring aims at increasing the number of hospital-supervised deliveries and reduce maternal and child mortality. The hospital network has already served more than 25,000 low-income patients, mostly from families working in the informal sector. It is also working towards serving the poorest of the poor. People who earn less than Rs. 100 a day may nd spending 1,500 for a delivery very difcult. Therefore, the hospital is evaluating how it can extend its services to those who cannot afford even its modest charges. Anant Kumar discusses the following challenges concerning the growth and future of LifeSpring hospitals. The rst challenge is sharing and nurturing the LifeSpring value system across our growing organization, he said. To address this issue, the excellent HR team at LifeSpring is selecting new employees who espouse their values and training the new entrants. It is the personal responsibility of each one of them to ensure that the value system is based on respect and accountability penetrates in every layer of all their hospitals. The second challenge is about maintaining customer service excellence across all LifeSpring Hospitals. To meet this challenge, the marketing and CRM team has developed excellent customer service modules, including videos to train the new staff on organization protocols. They also designed a system to collect customer feedback digitally and are

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developing a customer service benchmarking study to compare the hospital services at LifeSpring against those of other hospitals and hospitality companies in India and the USA. The nal challenge was about maintaining high quality care at LifeSpring hospitals. The challenge is to replicate the existing quality standards at the new hospitals. The quality assurance team creates training videos to demonstrate all 93 quality protocols in English and the local language. Our dedicated staff is working overtime to keep the LifeSpring engine running full steam. We are leveraging efciencies on all fronts and confronting the challenges with creativity, passion, and commitment, said Anant Kumar.

Notes
1. LifeSpring Hospitals: customer testimonials, www.lifespringhospitals.com/testimonials.html 2. To protect the privacy of our customers, names have been masked. Each quotation has been taken word-for-word from the customer or customers attendant, based on customer feedback and interviews. 3. Report on corporate social responsibility (CSR): LifeSpring Hospitals, http://lifespring.in/pdf/ LifeSpring%20CSR%20Report.pdf 4. World Health Organization (WHO), United Nations Childrens Fund (UNICEF), and United Nations Population Fund (UNFPA), Maternal Mortality Database (1995). 5. International Institute for Population Sciences (IIPS) and ORC Macro, National Family Health Survey (NFHS-2) 1998-1999 (Mumbai, India: IIPS, 2000). 6. LifeSpring Hospital Background Information, Downloadable material section, www. lifespringhospitals.com/ 7. LifeSpring Hospital Home page, www.lifespringhospitals.com/ 8. LifeSpring corporate brochure, www.lifespring.in/pdf/LifeSpring%20Corporate%20Brochure_final.pdf 9. Information on investors of LifeSpring, www.lifespringhospitals.com/current-investors.html 10. Schedule B The federal income tax form for listing gross dividends and/or gross taxable interest income payments that total more than $400 during the tax year. (Financial Dictionary http:// nancial-dictionary.thefreedictionary.com). 11. HLL Lifecare Limited, innovating for healthy generations a brief prole, www.lifecarehll.com 12. Partners: investing in innovation, www.acumenfund.org/community/partners.html. 13. 26 thriving enterprises helping over 36 million people, www.acumenfund.org/investments.html

Keywords: Health services, Hospitals, India

14. ANMs undertake an 18-month diploma program, the GNM course is three and a half years, and requires a higher-level secondary-school education. 15. LifeSpring: get involved, www.lifespringhospitals.com/sponsor-births.html

References
Chaudhary, D. (2009), Striking a balance between prot and philanthropy, Wall Street Journal, available at: www.Livemint.com) (accessed 20 April). Datt, A. (2009), LifeSpring Hospitals blog, available at: www.taashee.com/lms/ (accessed 3 March 2010). Desai, P. (2009), Meet the people of LifeSpring Hospitals, available at: http://blog.acumenfund.org/ 2009/01/19/meet-the-people-of-lifespring-hospitals/ (accessed 5 January 2011). Gupta, A. (2009), LifeSprings bloom this hospital provides maternal care at one-fth of market rates. And it makes prots too, Outlook Magazine, 5 June. Kachhap, M.N. (2009), LifeSpring Hospitals, Modern Medicare, available at: www.modernmedicare.in (accessed 5 June 2009).

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Karamchandani, A., Kubzansky, M. and Frandano, P. (2009), Emerging markets, emerging models: market-based solutions to the challenges of global poverty, available at: www.mim.monitor.com Kumar, A. (2007), LifeSpring Hospitals: a chain of community level hospitals providing affordable quality healthcare to working poor in India, ChangeMakers, July. Radawan, I. (2005), India: private health services by the poor a policy note, available at: http:// siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698 140167/RadwanIndiaPrivateHealthFinal.pdf/ (accessed January 1 2011). RamaRao, S., Caleb, L., Khan, M.E. and Townsend, J.W. (2001), Safer maternity in rural Uttar Pradesh: do primary health services contribute?, Health Policy and Planning, Vol. 16 No. 3, pp. 256-63. Reddy, V.T. (2009), LifeSpring springs up in Boduppal, Press Release, 1 July. Tinker, A., Finn, K. and Epp, J. (2000), Improving womens health in India, available at: http:// siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/. . ./Tinker-ImprovingWomenswhole.pdf (accessed 28 December 2010).

Further reading
Pratt, D.J. and Shilling, D. (2003), World development report 2003, available at: http://siteresources. worldbank.org/DEC/Resources/mountains.pdf (accessed 2 January 2011).

Corresponding author
Krishnadas Nanath can be contacted at: username.krishna@gmail.com

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