Screen Shot 2014-12-18 at 2.24.17 PM“My motivation was to make a difference in an ethical and transparent manner and bridge the health care access gap,” says Dr Ashwin Naik, co-founder and CEO of Vaatsalya Healthcare, an award-winning social enterprise that aims at providing affordable health care to India’s rural and semi-urban population. The first Vaatsalya hospital began operations in 2005 in Naik’s home town of Hubli, in North Karnataka, where his parents still live. “Today, we treat close to 4 lakh customers per year on an outpatient basis and about 30,000 patients on
inpatient basis every year,” he says.

“As a kid, I always wanted to be a scientist,” Naik says. “After high school, I qualified for both engineering and medical schools, but I enrolled myself in an engineering college. Next thing I know, my entire family descended on me and convinced me that I should take up medicine as there was no doctor in the family. But, the great thing was that I joined a government medical college, Karnataka Medical College [KMC], in Hubli, which was a great experience and opened my eyes to opportunities. One of the fascinating aspects of medical education is that you don’t just work or interact with your classmates, you get to interact with senior students, residents, practising doctors and patients. It widens one’s perspective much more than a classroom-based curriculum. Moreover, KMC had a vibrant student community with lots of extracurricular activities and I jumped headlong into them. In my last year, I went back and started reading about medical discoveries. Around that time, the human genome project was getting started. I made up my mind to be part of it, so instead of post graduation, took up GRE and joined University of Houston to work on my Masters in biochemistry with specialisation in genomics.”

Naik then went on to realise his childhood dream of becoming a scientist with his first job at Celera Genomics, in Maryland. “Celera was trying to sequence the human genome in competition with public universities, and the company had an audacious goal of sequencing the genome in four years, whereas the public consortium had budgeted 15 years,” Naik explains. After Celera, he went on to work at other research-oriented companies such as Molecular Connections and Triesta Sciences, and still holds three patents to his name with the United States Patent Office.

However, he always wanted to return to India and start something in the health care space. Naik joined hands with his room-mate from medical school, Veerendra Hiremath, and the duo began their mission of providing “affordable, ethical and accessible care in small towns”.”We were the first private company to venture into this model,” says Naik. “And, we learnt from our mistakes.”

So, how does the Vaatsalya business model work? Though its work involves serving India’s underserved rural and semi-rural areas, it is very much a for-profit company, funded largely by a variety of venture capitalists. It focusses on either taking over small hospitals with an annual turnover of Rs 1.5-2 cr, or renting empty buildings and converting them into staffed hospitals. “We set up and manage mid-sized hospitals, about 70-100 beds, in tier-II and III towns where there is a lack of critical care and basic services,” says Naik.

Vaatsalya’s success has not only reflected in its growth but also in a number of awards it has received over the years. It was listed as one of the five hot start-ups to watch for by Forbes magazine in 2011, and as one of India’s ten most innovative companies by Fast Company magazine last year. Vaatsalya started off by focussing on preventive medicine with an emphasis on five key areas — maternity, paediatrics, general surgery and medicine, and nephrology, which constitute the major hospitalisation needs in smaller towns and cities.

It took Naik and Hiremath almost four years to zero in on the existing business model. “One of the most important things we learnt was that no two towns are alike. We want to build on our first-mover advantage, add more services in our existing hospitals and expand the network into new towns. Our goal is to expand the network to serve a million customers per year through the Vaatsalya network in the next three years,” he says.