Siemens healthcare maps rural conquest

Written by Soma Das | New Delhi | Updated: May 23 2012, 10:32am hrs
The walls of Siemens healthcare division CEO D Ragavans office are plastered with maps of India, marked with colourful dots. They are not part of geography lessons but represent the companys plans to reach the countrys interiors. The dots denote districts where Siemens has already hoisted its flag and mark territories for entry.

The process started about two years back, when internal research popped up startling national statistics. Around 67% of Indias 598 districts do not have cathlabs. Close to 60% of districts do not have MRI facilities and 50% do not have CT scanners. We also stumbled on the extremely skewed concentration of these technologies. Disturbingly, while the road facing AIIMS in Delhi has around 15 MRI centres, the entire state of Bihar with a population of 100 million has less than 15 MRI centres, said Ragavan, who claims a 90% accuracy of his companys statistics considering it maintains a record of all vendor installations across the country.

A Technopak estimate seconds such assertions, claiming that while people from tier-III towns and cities have to travel 73 km on an average, people from tier-II cities have to travel 66 km to avail of healthcare service.

These figures led Siemens to prepare a list of such districts, which didnt have the healthcare technologies the company has expertise in. The company calls these the zero installation base or the ZIB districts. For each core technology that Siemens specialises in, it generates a ZIB database. Then, the company superimposes a few other economic parameters of these ZIB districts GDP of the administrative unit, population and consumer spending to zero down on destinations with critical mass but no technology. Every year, the company demarcates 25-50 such ZIB districts as targets for expansion.

We then find local players at these locations, either an entrepreneur or a hospital eager to set up the technology and give him support for the first six months, Ragavan said.

The company is open to helping local players with financial and non-financial hand-holding to help them break even in the first six months. While many local players invest their own money, some are aided by Siemens Financial Services (SFS), a non-banking financial corporation floated last year.

While SFS could help with commercial lending, a host of non-financial activities such as clinical marketing among the doctor fraternity, awareness programme and, image quality audit are offered by Siemens in and around the area. SFS offers loans, leasing and other financial products in the country to all sorts and sizes of organisation, and provides essential support for Siemens and other B2B vendor financing requirement. One of the key stated goals of the units financing operations is to better align with Siemens sectors which include energy, infrastructure and healthcare.

While SFS conducts its independent risk rating analysis, projects which have been vetted by us have an upper hand. That is because we have already carried out an economic viability study in ZIB cases, Ragavan said.

Till date, Siemens has cracked 67 districts and claims a success rate of 90% on the litmus test of helping local players break even in first six months. We intensify our activities around the selected city or town. My experience has been that our local partners value our non-financial endeavours much more. Seamless after-sales service is also where we focus for uninterrupted service in smaller places, Ragavan said.

Some of the districts which were part of the ZIB strategy are CT scanners in Jorhat, Assam and Bhandara in Maharashtra; MRI systems in Mahasena, Gujarat and Bellary in Karnataka, ultrasound in Shimla, Himachal Pradesh and Karimnagar in Andhra Pradesh; cathlab in Andamans and x-ray product in Begusarai, Bihar.

Globally, Siemens Healthcare has $15.9 billion revenues and the companys worldwide healthcare sector CEO Hermann Requardt while stating its 2013 agenda earlier this year had counted increasing footprint in India as one of its objectives.