4 suresh soni-nova-business-model-and-proposition_ncas_2011


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4 suresh soni-nova-business-model-and-proposition_ncas_2011

  1. 1. Ambulatory Surgery Centers, IndiaNova Business Model & Value Proposition Mr. Suresh Soni, Chairman & CEO, Nova Medical Centers 2nd September 2011©2011. Nova Medical Centers. Strictly private and confidential
  2. 2. Ambulatory Surgery Centers | 2 Indian Healthcare growing exponentially … to $280Bn by 2020 Indian Healthcare In $Bn $280Bn Indias healthcare However, the spend spend ($40Bn) is represents a meager CAGR Growth of growing at 16%, well 4.1% of GDP as 22% ahead of 8% GDP compared to global 180 growth average of 9.7%©2011. Nova Medical Centers. Strictly private and confidential 25% $ 40Bn By 2020, Private 17% Significant healthcare spend in 100 investment India is estimated to opportunity 20 20 be ~$180Bn 2010 2020 PRIVATE PUBLIC
  3. 3. Ambulatory Surgery Centers | 3 Very Active Investment Interest in Healthcare … from PE / VC’s Private Healthcare Delivery Source of Funds 2011 Stand Alone Surgery Centers / Tertiary FDI / Venture Capital / Private & Hospitals / Medicities / Other Equity / Private Funds beyond Innovative Models Corporate Chain Private Funds / 2000 Multi Specialty Hospitals Foreign Direct Investment (FDI)©2011. Nova Medical Centers. Strictly private and confidential 1990’s Standalone Multi Specialty Hospitals Private Funds / Debt Group / Single Specialty Practice / 1st Corporate Hospital Established Family / Private Funds (Apollo) 1980’s Single Practice / Nursing Home Self Funded
  4. 4. Ambulatory Surgery Centers | 4 The Last Decade has seen large number of Investments in the Healthcare Segment 1 2 382 M&A deals worth $19.4Bn 275 deals in Venture Capital & Including Increasing buyouts by Private Equity worth $2.9Bn large corporate hospitals for • AIG & JP Morgan invested ~$100Mn immediate scale in Narayana Hrudayalaya Example: Fortis’ acquisitions of • Warburg Pincus’ investments in Max Wockhardt, Malar, Hiranandani of $33Mn Hospitals • Recently, Sequoia invested $20Mn in Vasan Eye Care©2011. Nova Medical Centers. Strictly private and confidential 3 Foreign Direct Investments • Singapore-based Parkway Group Healthcare JV with Apollo Group • Columbia Asia Group, US started operations in India • Max collaboration with Singapore General Hospital
  5. 5. Ambulatory Surgery Centers | 5 Healthcare Providers command significant valuation premiums But Wealth Creation is solely benefitting Promoters and Investors Enterprise Value Multiple (EV) Revenue EBITDA EV / EBITDA RECENT DEALS 3,000 350 ~110 27x 27x 560 200 20 28x 28x©2011. Nova Medical Centers. Strictly private and confidential 475 ~330 ~32 15x 15x PUBLIC COMPANIES 6,142 2,027 324 18x 18x 7,330 1,467 498 14x 14x
  6. 6. Ambulatory Surgery Centers | 6 Nova’s Ambulatory Surgery Centers seek to provide better economics to all stakeholders FINANCIAL BENEFITS to… DOCTORS Doctors VALUE Patients©2011. Nova Medical Centers. Strictly private and confidential created by MANAGEMENT TEAMS Insurance Companies ADMINISTRATIVE STAFF Investors
  7. 7. Ambulatory Surgery Centers | 7 Nova has introduced a unique Ambulatory Surgery model in India Compact 10,000 – 12,000 sq ft leased center Clinically Proven Procedures undertaken by experienced surgeons©2011. Nova Medical Centers. Strictly private and confidential Use of Advanced Equipment, Patients are pre screened technology and surgical techniques to avoid complications reduce recovery time Each center has Recovery & discharge occurs − 5 Operating Theatres from 2 – 72 hours after surgery − 15-20 Pre and Post Op Rooms is performed. 90% of patients are − 8–10 OPD Consultation Suites − Pathology Lab, Radiology & Pharmacy discharged the same day. − Preventive Health check Nova Patients Save 15-20% as compared to corporate Hospitals
  8. 8. 8 Each Nova Center Offers a Comprehensive Range of Services Operating Theaters Five state of the art operating theaters IVF Fully Equipped Pre and Post Operating Lab, Ovum pick up Recovery and Embryo Typical Nova center has 16-20 beds with transfer. ICU facilities and 2-3 rooms for short stay Radiology Services©2011. Nova Medical Centers. Strictly private and confidential X-ray, Ultrasound, Echo, ECG, Pathological Labs and TMT, C-Arm (Routine, Biochemistry, Hematology, Special, DSA). Micro-Biology, Cytology & Histopathology, Serology including tumor markers Pharmacy Doctor’s Outpatient Clinics Health Checkups
  9. 9. Ambulatory Surgery Centers | 9 Major Specialties covered at Nova Ambulatory Centers©2011. Nova Medical Centers. Strictly private and confidential Paediatric surgery
  10. 10. Ambulatory Surgery Centers | 10 ASCs are Eco Friendy & provides better value … to all stakeholders Conventional ASC’s 100 Bedded Hospital Eg: Nova Land Acquired Leased Space required 60 – 70,000 sq ft 10 – 12,000 sq ft # of OT’s 5 5 Staff At least 300 staff 35 & Support Staff©2011. Nova Medical Centers. Strictly private and confidential Insurance Mandatory 24 hour Stay Stay not Mandatory Initial Set up costs ` 120 – 130 crores ` 10 - 12 crores Monthly Optg Costs ` 2 - 3 crores ` 35 – 40 lakhs Break Even Time 5-7 years 8 – 10 months
  11. 11. Ambulatory Surgery Centers | 11 Nova has introduced a Unique Ambulatory Surgical care model in India Each center is a 70:30 partnership between Nova Holding Company & 40 experienced surgeons Each Surgeons can invest up to Rs ` 10 lakhs Each center costs `10 – `12 crores to build Nova Medical centres have low Operating Costs of Rs 30 lacs per month 40 Surgeons performing 2.5 surgeries a month will achieve break even©2011. Nova Medical Centers. Strictly private and confidential Typically Cash flow positive in One year from inception Owner doctors receive: • Higher professional fees • Profit Sharing • Very Significant equity appreciation
  12. 12. Ambulatory Surgery Centers | 12 Only Novas Unique Business Model allows Equity Ownership and Wealth Creation for Professional Doctors • Non-owner doctors receive 30-40 % professional fees in less than stellar facilities, no Significant Equity national branding, no profit Appreciation sharing or equity (8 – 10x consideration of initial investment) Marginal to Nil Terminal Value for Practice©2011. Nova Medical Centers. Strictly private and confidential Performance Profit Share from No Equity or Profit Linked Incentive large Investment by sharing for Doctors (PLI) Nursing Home Owner 10 – 20% of surgical Package paid as 30 – 34% Professional Fees Professional fees Professional Fees (less affiliate charges) Nova Ambulatory Nursing Homes Corporate care Model Hospitals
  13. 13. Ambulatory Surgery Centers | 13 Nova Business Model has achieved been accepted by all stakeholders Clinical Proven Undertaken over 6,000+ Surgeries with Superior Outcomes . Doctor Acceptance Over 300 doctors under Nova fold across 5 cities©2011. Nova Medical Centers. Strictly private and confidential Insurance Empanelment All major insurance companies/ TPA’s have empanelled Nova to undertake ~ 800 surgical procedures without 24 hour mandatory hospitalization Patient Acceptance Over 97% patient satisfaction
  14. 14. Ambulatory Surgery Centers | 14 Nova business model creates value for all stakeholders in the Healthcare Industry MULTI-FOLD ADVANTAGES FOR PATIENTS, SURGEONS, HEALTHCARE PROVIDERS AND INSURERS & TPAS Patients • 15-20% cheaper package rates compared to Corporate Hospitals • Better Outcomes • Faster Discharge & Recovery at home reduces chances of HAIS Surgeons • Higher Professional Fees, Profit Sharing and Ownership interest leads to©2011. Nova Medical Centers. Strictly private and confidential significantly improved economics for Surgeons • Pride of Ownership without large Investment • Flexible work schedule and improved lifestyle Insurance & Corporate Employers • Significant cost Savings • Increased Productivity for work force as operated employees return faster to work • Pan India footprint and strong brand offers consistent expectations and easy to manage relationships