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Uber is a taxi service that has no cars! This and several others, such as AirBnb, Zomato, and Swiggy, have grown in their respective sectors on the back of asset-light business models. These models connect users with high-quality providers while bringing in an important layer of trust and experience.
Asset-light strategies and business models are now recognized as an essential tool for fuelling growth and strengthening an ecosystem of partnerships. An asset-light strategy or business model entails transferring capabilities, such as people, processes, and technology, to “better owners” in order to enable companies to transition from a fixed cost structure to a variable cost structure, improve agility, and facilitate a resource shift that allows a focus on core capabilities.
Today, asset-light strategies are being used by businesses of all sizes to deal with massive market disruption and drive continued growth. And the healthcare sector isn’t an outlier.
Just as an asset-light model enabled by technology has changed sectors like commerce, education, and mobility, the same is expected to happen in healthcare in the upcoming years.
Specifically looking at the healthcare sector, the asset-light model could potentially solve one of India’s most potent healthcare problems—that of access. Currently, public healthcare in the country is overloaded, and the known private brands are expensive for the average user. As a result, most patients look for a brand that they can trust—a gap that needs to be filled.
Setting up a hospital from scratch and running it has always been difficult, which is why there are only a few national or large regional hospital chains in the country. As a result, one of the largest consumer markets in the country (north of $100 billion) remains very fragmented. The large chains account for less than 5 per cent of total bed capacity.
That said, in urban areas, there are a lot of high-quality hospitals that have been set up by highly experienced doctors. But this potential has not yet been fully tapped into. One reason for that is the lack of brand presence that elicits trust from patients. The other is the inability of a smaller center to adopt technology that can improve the patient experience. As per a report published by the FICCI in 2019, almost 50 per cent of patients report not being happy with their experience at the hospital. After all, healthcare is one of the few sectors in India that has remained largely untouched by the tech- and internet-based improvements that we have seen in other sectors.
This is why there has been a concerted effort by new-age healthcare platforms like us to bring together the clinical expertise of doctors while standardizing healthcare protocols to create a brand that people can trust across the country. We believe that trust will be driven by three pillars.
Consistently good clinical outcomes, transparency in pricing, and a best-in-class experience.
The asset-light business model allows a hospital network to grow faster and denser without compromising on clinical quality or patient experience. It also provides the flexibility of having smaller centers that might be more suited to certain geographies. The lack of these among the existing branded chains has been an issue, as efficiencies of scale demand a hospital to be of a certain size in such models.
That said, there is a need to balance the scalability of an asset-light model with an unwavering commitment to the quality of the network, an absence of which can erode patient trust. Developing clear protocols and audit processes helps ensure only the best hospitals are part of the network. This includes the quality of clinical staff, infection control, the quality of infrastructure, and other similar factors that together drive clinical outcomes.
While asset-light models have grown fast and demonstrated new ways to scalably improve delivery of services, we should see a stronger element of curation with a focus on quality being added, with the market demanding higher quality, and that becoming the key differentiator for new age platforms. Especially for healthcare, being asset-light has become an integrator model of delivery and will remain a part of future models.
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