A Case Study on
LifeSpring Hospitals

For the course
Social Entrepreneurship
Trimester 2, MBA (UT) Batch-A

Submitted by
Team 8 – LSD
Arun Venkatesh (13UTA05)
Ashwin Shankar (13UTA06)
Bharath V.S.(13UTA08)
Prabhu Dev (13UTA26)
Saravanan L (13UTA30) Date: 08.12.2013 Shariq Amanulla Khan (13UTA32)
Key facts:
Name of the social enterprise: LifeSpring Hospitals Pvt. Ltd.
Industry: Healthcare (Maternity)
Number of employees: 24 full-time & 24 on-call doctors, 250 nurses
Turnover in Rupees (last financial year): Not available
Profits in Rupees (last financial year):Not available
Geographical locations: Alwal, Amberpet, Bod Uppal, Bowen Pally, Champarpet, Chilkalguda, Kukatkally, Mallapur,Moula Ali, Purana Pul, Toli Chowki, Vanasthalipuram (All in Hyderabad).
Regd. Office: HLL Bhavan, Mahilamandiram Road, Poojappura, Thiruvananthapuram, Kerala,India
Main promoters behind the enterprise: HLL Lifecare Ltd. (50%) & Acumen Fund (50%)
Impact achieved so far: Reduction in Maternal Mortality Ratio in South India.3,00,000 patients treated and 18500 healthy babies delivered.
Key People : Dr. M.Ayyappan, Chairman & MD ; Sushmit Mitra, COO
Executive summary:
LifeSpring Hospitals is a chain of maternity care hospitals for women from low-income group. It operates 12 Hospitals in Hyderabad offering obstetric, gynecologic and pediatric services at lower prices. Each of its hospital is a small sized one, often 25 bedded. 70% of the hospital is allocated to the general ward whose prices are about 30-50% of the market price. The rest are semi private and private rooms. The hospital offers high quality service and has an infant mortality/morbidity rate of 1%, which is less than the international standard of 5%.
Origins:
LifeSpring Hospitals was formed in 2005 as pilot project to provide low cost healthcare by Hindustan Latex Limited, a PSU manufacturing healthcare products, in Hyderabad. In 2008, LifeSpring became a private company with a 50% funding of 2 million USD from Acumen Fund, a U.S. based non-profit venture capitalist while Hindustan Latex Ltd., which became HLL Ltd, held the remaining 50%.
Vision, Mission and Strategy:
MISSION: To be the leading health care provider delivering high quality, affordable core maternal health care to low-income mothers across India.
VISION: To provide high quality maternal care to the poor throughout India.
STRATEGY: The organization plans to go pan India through the establishment of 100 hospitals in the next 5 years.

Key social/environmental need that the enterprise addresses:
India has a Maternal Mortality Rate (Maternal death for every 1,00,000 live births) of 200 and ranks 52nd in the world. But it contributes 19% of the world’s maternal deaths (56,000 every year). Most of these are due to lack of proper pre and post-natal care (43% of births in India are attended by a skilled health worker). Public hospitals are over-crowded and offer poor level of service whereas private hospitals charge high price, which makes it inaccessible for the bottom 60%.
LifeSpring offers service to the market that exists between the aforementioned two, providing a low cost, high quality maternity care.
Clients:
The patients include women whose household income is Rs.3,500 – Rs.8,500 per month most of whose husbands are working in unorganized sectors.22% of the Indian population is below poverty line.60% earns under Rs.10000 per month. Most patients of LifeSpring belong to the 38% in the middle (lower middle class).
Services Offered:
The following services are offered for both in and out patients by LifeSpring Hospitals: * Pre and Post-natal services * Obstetric services * Family Planning services * Gynecological services * Pregnancy termination services * Pediatric care (including Immunization)
Marketing:
The enterprise has adopted targeted marketing through different channels. Dedicated outreach staffs gather information regarding the family and medical history of expectant women. Awareness camps are conducted every month educating community on nutrition and health related issues. For every inpatient, vouchers providing free treatment to 1 outpatient or discount to an inpatient are given away.
Revenue model:
LifeSpring offers its services at a price that is about 1/6th the price of other private clinics. Normal delivery in general ward costs Rs.2,000 that is inclusive of delivery, two-day stay, medicines and a baby kit. Deliveries in private rooms cost Rs.7000. The cross-subsidization helps in offering subsidized services to the 70% of its patients. The cost structure is given below.

In Rs. | GENERAL WARD | SEMI PRIVATE ROOM | PRIVATE ROOM | NORMAL DELIVERY | 2000 | 4000 | 7000 | CAESARIAN | 8000 | 11,500 | 16000 |

Operations:
LifeSpirng’s operations are low-cost and high quality in nature. It is achieved through the implementation of 4 strategies: * High Throughput Rate
LifeSpring Hospitals are designed in such a way that they are sustainable economically when they operate at a high throughput rate. The hospitals are situated in areas of high population density and low income (esp. Urban slums) in Hyderabad. The above-mentioned marketing campaigns and word of mouth attract patients. LifeSpring performs 6,000 deliveries a year. * High Asset Utilization
Every hospital is employed with 2 full-time and 2 on-call doctors. Every doctor at LifeSpring performs 4-5 deliveries a week whereas others perform 1-2 deliveries a week. Also, a doctor is relieved from any administrative operations of the hospital, which enables them to spend more time towards deliveries and surgeries. An administrative official takes care of the hospital’s paperwork. For every doctor, there are 12 nurses to support and help improve productivity. The nurses’ composition is 9 ANM (Auxiliary Nurse Midwife) and 3 GNM (General Nurse Midwife). An ANM diploma requires a pass in class 10 and the programme lasts about 18 months long whereas a GNM requires a class 12 completion and the programme runs for about 42 months. Considering the lesser qualification and lack of demand for ANMs, their pay scale is lesser than a GNM, thus reducing one of LifeSpring’s variable costs. * Process Standardization
Since LifeSpring focuses only on maternal care, cost reduction in process is possible. 93 protocols have been standardized such as the surgical kit used, clinical procedures, etc. These protocols have been approved by the ISO (9001:2000). This helps in improving service rate, which in turn reduces costs taking advantage of economies of scale. * No frills Set-up and Service:
Only 2-3% of the deliveries performed at LifeSpring require intensive care. Hence, LifeSpring has partnered with other hospitals for such services rather than building their own. It not only eliminates the fixed cost associated with it but also exclusive staffs for that purpose with better qualification than an ANM. Laboratory and pharmacy services are also outsourced, thus reducing capital and operating as a strict no-frills organization.
Before establishing a new hospital, LifeSpring researches the needs of the market (in & around that locality) and analyzes the feasibility of replicating its protocols in the new establishment. Once the location is finalized, a newly constructed or existing facility is leased. Employees are hired. Through the marketing team, a relationship is established with the community. Standardized procedures are adopted in service. The process is monitored continually.

Financials:
LifeSpring had revenue of Rs.27 lakhs in 2006 and Rs.60 lakhs in 2007.To achieve financial sustainability, a 20-bed hospital should perform on average three deliveries per day. A new establishment achieves breakeven within 18 – 20 months of inception.
Social impact created:
LifeSpring has significantly increased hospital-supervised deliveries and reduced maternal and child mortality and morbidity rates. The enterprise has grown from one hospital at the time of Acumen’s investment to twelve hospitals. LifeSpring is now the largest chain of maternity hospitals in South India. More than 300,000 patients have been treated and 18,500 healthy babies delivered. By reducing the burden of maternal healthcare on low-income families, LifeSpring is helping to ensure that more babies are born with qualified physicians rather than at home in high-risk situations. Thereby this model contributes to the reduction of child and maternal mortality rates by increasing institutional deliveries. In addition, communities are invited to attend monthly health camps held at the hospitals to educate women and their families about proper maternal care. Pregnant women are given free medical consultations and vitamins and children receive free pediatric consultations and vaccinations.
Comments:
Low capital investment, cross-subsidization model of revenue and commitment of the employees have helped LifeSpring’s efficient functioning. The organization remains almost a virtual one for it does not own any substantial assets, which reinforces the organization’s core value of service rather than profit. LifeSpring bridges the gap between quality of service and price. It effectively caters to the needs of those who want a better service than a govt. hospital and cannot afford a private hospital.
References:
1.http://www.lifespring.in/pdf/BCtA,LifeSpring,%20Case%20Study.%2009.10.2010,%20FOR%20WEB.pdf
2.http://knowledge.wharton.upenn.edu/article/lifespring-hospitals-providing-affordable-quality-maternity-care-to-indias-middle-class/
3.http://acumen.org/investment/lifespring/
4.http://books.google.co.in/books?id=vwinOOOiYA0C&pg=PT667&lpg=PT667&dq=EMPLOYEES+in+lifespring&source=bl&ots=PpsToyv5MY&sig=EtbLbczTAsZzsuBuksh87vewY_k&hl=en&sa=X&ei=40mjUr6bMIf5rQeWqIH4BA&ved=0CGAQ6AEwBw#v=onepage&q=EMPLOYEES%20in%20lifespring&f=false