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Emerging Markets Case Studies CollectionEmerald Case Study: LifeSpring Hospitals: a social innovation in Indian healthcareKrishnadas Nanath
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LifeSpring Hospitals: a social innovationin Indian healthcare
Krishnadas Nanath
1. Preface
One fine morning, Mr Anant Kumar – chief executive of LifeSpring Hospitals Pvt. Ltd, was
reflecting 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 India’s
Ministry of Health and Family Welfare and the Acumen Fund, a US-based non-profit 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 identified 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 diversification, but LifeSpring
has proved its point by actually turning out to be a profitable 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 organization’s 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 qualified
DOI 10.1108/20450621111123362 VOL. 1 NO. 1 2011, pp. 1-14, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
Krishnadas Nanath is a
Doctoral Student at the
Indian Institute of
Management, Kozhikode,
India.
Disclaimer. This case is writtensolely for educational purposesand is not intended to representsuccessful or unsuccessfulmanagerial decision making.The author/s may havedisguised names; financial andother recognizable informationto protect confidentiality.
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 financial strategies that
could provide some room to convert this noble cause to a profitable 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 significant (Radawan, 2005). Private sector has been filling the gaps of
inadequate focus on maternal and child health. At independence, private sector accounted
for just 8 percent of healthcare facilities. The figure 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,
efficiency, 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 finance 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 good quality of clinical care;
B affordable care; and
B 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 fifth leading reason for
Plate 1
PAGE 2 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011
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 India’s 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, India’s 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.
LifeSpring’s small hospitals (20-25 beds) fill the void of high-quality maternal and child health
care at affordable rates for India’s lower income population. In early 2008, LifeSpring
transformed into a private company, driving its efforts to open five new hospitals in that year
and 30 across India by 2010[6].
The first 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
Figure 1 Maternal care statistics in India
45-59
15-44
5-14
0-4
0 200
Source: Compiled from World Bank Report (2003)
400 600 800
AP population of DALYs lost by age group
Group3
Group2
Group1
Note: The DALYs lost per thousand, my major cause groups in rural and urban areaSource: ASCI (2001)
State Group 1 Group 2 Group 3 Group 1 Group 2 Group 3
Andhra Pradesh 160.04 81.46 47.23 97.67 74.25 30.45Punjab 134.41 73.51 43.86 114.39 56.15 32.08Maharashtra 148.29 72.25 41.54 100.74 47.87 18.31Karnataka 165.56 72.78 43.24 109.9 50.27 22.13West Bengal 164.6 69.14 44.03 96.66 53.84 20.29
DALY Lost per 1,000, Rurual DALY Lost per 1,000, Urban
The need to improve maternal and child health care
VOL. 1 NO. 1 2011 jEMERALD EMERGING MARKETS CASE STUDIESj 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.
Kumar’s 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 profits 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 profitable only when there is enough
diversification in services and economies of scale. However, diversification 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 confident about the LifeSpring business model and scalability of such
hospitals and made numerous rounds at banks, financial institutions and venture capital, or
VC, firms. Much to LifeSpring’s 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-profit 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 diversified into six hospitals. LifeSpring’s
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
flagship 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 identification.
The web site of LifeSpring starts with a very impressive quote, ‘‘Low-income women want
affordable, dignified 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’ reflects its adherence to policies right from the scratch.
PAGE 4 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011
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-profit 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
Figure 2 Target customer information at LifeSpring
Urban India income pyramid (2004-05)
16%MHE':>Rs 9,625 pm
MHE':Rs 4,575–
Rs 9,625 pmLifeSpring
B60customers
MHE':Rs 2,500–
Rs 4,575 pm
MHE':<Rs 2,500
37%
33%
14%
Education level
Source: Collected from LifeSpring Corporate brochures and newsletters
Little or no schoolingIntermediate
10th class Day labourer Rickshaw driverGovernment
April 2008
Petty business
Private sectorGraduate
Our customers
Source of income
• Customers are from local slums, low-incomehousing colonies; most have daily wage jobor run petty business.
• Typical household had five to six members• Majority comes from 5 km catchment area
(also focus on outreach staff); word-of-mouth has led to customers coming from15-20 km distance as well. “Proximity tohospital is one of the key criteria whileevaluating alternatives. However,recommendation from the relatives/friendsoverrides the distance”-LS staff
• Choice for delivery tends to be either athome or institutional.
• Consumer reach suggests LifeSpringcustomers are very satisfied with the serviceand price
28% 25%
7%
16%19%
33%
29%21%
22%
LifeSpring customers are B60 women who have household income of Rs 3k-7k/month
VOL. 1 NO. 1 2011 jEMERALD EMERGING MARKETS CASE STUDIESj 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 first LifeSpring
Hospital was launched at Hyderabad in December 2005 and also at Kanpur and at Agra
in UP. The corporate profile 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-profit global venture philanthropy fund that invests in
social businesses in the fields of healthcare, housing, water, and energy. Headquartered in
New York, Acumen has country offices 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. It’s a non-profit global venture fund that’s looking at issues of global
poverty (Gupta, 2009).
Table I Balance sheet of HLL Lifecare Ltd as on 31 March 2009
(Rs. in lakhs)Balance sheet as on 31 March 2009 2008-2009 2007-2008
Sources of fundsShareholder’s fund
Share capital 1,553.50 1,553.50Reserves and surplus 11,249.99 10,688.95
Loan fundsSecured loan 9,469.17 6,669.94Deferred tax liability 143.36 100.14Total 22,416.02 19,012.53
Application of fundsFixed assets
Gross block 16,293.74 13,967.92Less: depreciation 9,004.05 8,336.52Net block 7,289.69 5,631.40Capital work-in-progress 3,541.53 839.15
10,831.22 6,470.55Investments 506.70 308.45
0.00Current assets, loans and advances
Inventories 6,130.51 4,338.32Sundry debtors 13,235.80 12,954.38Cash and Bank balances 5,504.47 1,644.80Other current assets 373.62 426.57Loans and advances 3,059.50 2,961.20
(A) 28,303.90 22,325.27Less: current liabilities and provisions
(a) Current Liabilities 16,554.99 9,632.57(b) Provisions 670.81 459.17
(B) 17,225.80 10,091.74Net current assets (A-B) 11,078.10 12,233.53
Control A/C 0.00 0.00Total 22,416.02 19,012.53
Source: www.lifecarehll.com (Rights to information act section)
PAGE 6 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011
This description essentially demonstrated the vision of Acumen Fund. In making investment
decisions, the Acumen looks at both financial 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. Acumen’s 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 LifeSpring’s immediate expansion plan. But what, asks Sahni, prevents it from
looking at 200 in five years? Yes, the model sounds good, as Acumen is not expecting
immediate returns; but the Sahni’s 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 profit) 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. LifeSpring’s 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,
financials, 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 certification. 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 difficult
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)
film-making company Global Rickshaw created a short video to educate LifeSpring
customers and future employees on its unique customer service policy.
VOL. 1 NO. 1 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 7
The quality standards alone will not suffice 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 significant 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 benefits. 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 difficult 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. LifeSpring’s innovation: carrying it forward
LifeSpring believes that the business aspects of the social innovation like finance, 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 diversification
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
16,000
12,000
Normal deliviery
1.5 K6 K
1.5–2.5 K
20–30 K
Lifespring1 Govt. Hospitals Pvt. Clinic Lifespring1 Govt. Hospitals Pvt. ClinicK = Rs. 1,000
300–1 K
8–10 K8,000R
s.
Rs.
4,000
0
30,000
LifeSpring price comparison with possible alternatives (Rs.)
Source: Collected from report on emerging markets, Karamchandani et al. (2009)
20,000
10,000
0
Caesarean section
PAGE 8 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011
The financial alignment to the innovation model is also demonstrated by the salaries of
doctors at LifeSpring. They earn fixed 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 no’t run them. The lease model saves hugely on land
costs.’’ Refer Figure 5 for gaining insights on financial 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. LifeSpring’s 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 women’s health and
pediatrics. A visit costs Rs. 50 ($1) in contrast to a private clinic’s Rs. 100-300. Moreover,
there is a price list displayed outside the hospital, creating consumer awareness,
Figure 5 Asset utilization at LifeSpring
120100–110
15–20 0.3–0.5
1.2–1.8
100
Average number of deliveries/month
LifeSpring asset utilization is more than five times that of comparable private clinics
Cost of doctor/patient
80
Num
ber
60
40
20
0LifeSpring
Note: Private clinic refers to small 20-30 bed nursing homes, often run by a familySources: Lifespring Hospital, monitor analysis; collected from report on emerging markets
Private clinic LifeSpring Private clinic
1.8
1.5
1.2
US$ 0.9
0.6
0.3
0.0
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 clinicalprotoclos. Many are ISO9001-certified, guranteering the quality of hospital procedures. Some ofthe 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) HospitalInfection 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 proceduresand thus bulk-purchases standard equipment and generic medicines. Standardization also enablesit to use Auxiliary Nurse Midwifery nurses (ANMs) in a addition to more expensive GeneralNurse Midwifery nurses (GNMs) – for matemityservices, the skill sets of both classificationsof nurse are the same 39. But because ANMs have a lower level of qualification, they are lesscostly to employ than GNMs, whose degrees are more advanced and expensive to attain.
Source: Karamchandani (2009)
VOL. 1 NO. 1 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 9
and confidence 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 setting up small-sized mid-market hospitals;
B affordable pricing;
B quality innovation;
B focus on maternal care: niche; and
B 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 mother’s day, where mothers are invited toget anawarenessof
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's first-ever Mother's Day Health Fair was a great success. More than 100 familiesreceived 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 wastimed with the weekly free child vaccinations and publicized through outreach workers and thelocal newspapers to ensure a good crowd. Families showed great excitement at the opportunity toget a free family portrait taken. LifeSpring hopes the colorful photographs remind families foryears to come that they are valued customers. Nurses measured people's weight, pulse and bloodpressure and answered health-related questions. And families entered a contest to win freediapers from MedPlus Pharmach.
Source: Snapshot from LifeSpring Newsletter
LifeSpring Celebrates Mother's Day
Families have fun while learning about women's health
PAGE 10 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011
awareness and raise funds. Acumen’s 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?v¼sKltomSjfvA.) 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. LifeSpring’s sponsoring births initiative aims to
reach the most underserved individuals in society. The web site quotes: For the cost of a tank of
gas,apairof jeans,oradinnerout for two,youcouldcollaboratewithus inadirectandmeaningful
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 mother’s 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
LifeSpring’s 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, LifeSpring’s 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
MediaWhy throw a LifeSpring party?
Sponsoring Births PartyCome celebrate what we can do!
Party detailsDate and time
Host
Address
Phone
Please reply via phone or email by
!
You're invited to a LifeSpring Sponsoring Briths Party,where we'll learn about the pioneering way LifeSpring isaddressing the maternal care crisis in India and make adifference from many miles away!
LifeSpring Hospitals is putting health care choice inthe hands of low-income mothers and welcoming theirbabies into the world with dignity and quality care.
How do I throw a LifeSpring party?
Logistics: We'll send you apackage of electronic materials, but not minute by-minute de-tails, because want you to have flexibility to support LifeSpring in whatever way suits yourstyle, preferences, and budget. If you have questions, though, don't hesitate to contact Alizaat alizakreisman@gmail.com.
Who to invite: Friends, family, colleagues, neighbors, fellow members of book clubs, playgroups, 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 celebratingher pregnancy through sponsoring LifeSpring births?)
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! Localrestaurants will probably cater at a discount if you explain thecause)
You can tailor a LifeSpring party in any way that inspires you! If you want a littleprompting, here are some things to think about:
We get excited every time a donation to sponsor a birth makes its way halfway around theworld and lands in our office. The impact that can be made by sponsorships from a crowdof inspired LifeSpring friends is huge, though. Hosting a party is also a great way to spreadthe word about LifeSpring's work and keep expanding the community of people across theworld motivated to make LifeSpring's model a global reality for women and their children.
VOL. 1 NO. 1 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 11
reports). Rigorous attention to metrics and adherence to quality protocol system ensure that
LifeSpring’s 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 first 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 benefit from LifeSpring’s 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 find
spending 1,500 for a delivery very difficult. 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 first 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
Figure 8 Rapid growth at LifeSpring
Total IP & OP cases
Rapid growth
April 2006
April 2007
April 2008
0 500 1,000 1,500 2,000
456
969
1,656
Births
April 2006
April 2007
April 2008
0 27.5 53.0 82.5 110.0
20
37
April 2007 28%
102
April 2008
Source: Collected from LifeSpring Newsletter-4
65%
0% 20% 40% 60% 80% 100%
Bed occupancy rate
PAGE 12 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011
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 final 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 efficiencies 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 customer’s 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 Children’s 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_f-
inal.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://
financial-dictionary.thefreedictionary.com).
11. ‘‘HLL Lifecare Limited, innovating for healthy generations – a brief profile’’, 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
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
Keywords:
Health services,
Hospitals,
India
References
Chaudhary, D. (2009), ‘‘Striking a balance between profit and philanthropy’’, Wall Street Journal,
available at: www.Livemint.com) (accessed 20 April).
Datt, A. (2009), ‘‘LifeSpring Hospital’s 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), ‘‘LifeSpring’s bloom – this hospital provides maternal care at one-fifth of market rates.
And it makes profits too’’, Outlook Magazine, 5 June.
Kachhap, M.N. (2009), ‘‘LifeSpring Hospitals’’, Modern Medicare, available at: www.modernmedicare.in
(accessed 5 June 2009).
VOL. 1 NO. 1 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 13
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 women’s health in India’’, available at: http://
siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/. . ./Tinker-ImprovingWomens-
whole.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
PAGE 14 jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 1 2011