LifeSpring Hospitals

Emerging Markets Case Studies CollectionEmerald Case Study: LifeSpring Hospitals: a social innovation in Indian healthcareKrishnadas Nanath

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To cite this document: Krishnadas Nanath, "LifeSpring Hospitals: a social innovation in Indian healthcare", Emerald Emerging Markets Case Studies, 2011

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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.


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


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)


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.


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


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)


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


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

Email

!

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 [email protected].

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.


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


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).


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: [email protected]


LifeSpring Hospitals

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