QuoteUnquote with KK and Sanjay Nekkanti is the CEO and founder of Dhruva Space Private Limited, the company behind sending the private satellite into space from India 2023
We have all dreamt about going into space. Listen to India’s space entrepreneur who dreamt it and launched India’s first private satellite into space. In this podcast, we discuss the India’s private space and satellite program, space research, innovation and start up ecosystem, growth opportunities for Indian space entrepreneurs, future space race and economy how can India win the race.
2023 India Healthcare and Lifesciences Investment Outlook
Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. Covid-19 pandemic killed over 23 million people globally. 2022 has brought new headwinds, some we haven’t seen in over 40 years. Healthcare spending will fall in 2023 in real terms, given high inflation and slow economic growth, forcing difficult decisions on how to provide care. Digitalisation of the healthcare system will continue, but the use of health data will come under stricter regulation. A New world order under the current geo politics fragmentation and multilateral world is bringing India to the forefront. It’s vaccine diplomacy, effective and cost-effective therapeutic solutions is a game changer for India.
2023: A Year of Newer Normal
Since the Great Chinese famine of 1959, for the first-time life expectancy as per UN, Covid-19 had been cut by 1.7 years off global life expectancy, reducing it to 71.1 years. While a recovery probably began in 2022, the UN calculates that 2023 will be the year when life expectancy first exceeds 2019 levels. The investment thesis with most of the investment managers in the current scenario is more of a long view on healthcare infra which are less tied to economic cycles and an imminent slow down globally. Some of the investment risks the healthcare and lifesciences sector faces include rising real interest rates, increasing price inflation for healthcare products and services in the face of weakening in consumer spending, reshoring the supply chains and the wars, both trade and terriotorial. Digital businesses are equally going to be impacted. ESG and impact funding is waiting for deployment.
2023 India Healthcare and Lifesciences Investment Outlook
Let’s relook at the board trends for 2023 in terms investment activity and trends.
Healthcare Financing
2021 was an all time-high for healthcare financing sector due to emergency and non-discretionary spend on healthcare. Health Tourism related funding is only going to take off in Q3 after the current wave tides down. Consolidation activity to slow down.
2023 Outlook: Moderate
What’s going wrong: right bite for the consumers, reach and penetration, higher debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend and health tourism, new wave restrictions, shortage of digital workforce
What’s going right: India stack digitisation, agetech, consumer borrowing to spend on electives
Medical Education
Skilled manpower shortages is the key driver for growth. All the students who have returned back from Ukraine need to be accommodate in our current system Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Churn in ownership of assets due to consolidation activity will continues at a faster pace.
2023 Outlook: Moderate
What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden
What’s going right: skill demand, digitisation, manpower-led business models creating their own content or tying up with larger established players, cross-border students coming to India, export of clinical manpower to the West
Med Tech Innovation and Life Sciences Discovery and Clinical Development
India has proven to be the vaccine supplier to the world in 2022 with over forty percent of the world’s pre-qualified vaccine products are made in India. Capacity creation and new product development need to be accelerated particularly in infectious diseases and some niche segments. Reshoring and government policies for that need to be accelerated. Global investment and partnerships is on the rise in 2023. Patent expiry of some of the blockbusters in the US are a huge opportunity.
2023 Outlook: Moderate
What’s going wrong: Innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, global collaboration and partnerships
What’s going right: Human capital, cost advantage, reshoring the supply chain, Make in India
Pharma and Therapeutic Solutions
Several players are going to go for the IPOs in 2023. Reshoring the supply chain is moving slowly. The Government production linked incentive is not moving as intended in the medtech, intermediates, APIs. The capital expenditure in creating world-class green infra is still to take off.
2023 Outlook: Hot
What’s going wrong: price controls, policy log jam, innovation and scale up, cost competitiveness, exit of PLI incentives, scale of capex, Margins pressure, IPO valuation
What’s going right: cost advantage, distribution infrastructure, Government incentive programs, blockbuster going off patent in the US, ESG funding entry
Healthcare Providers
2022 was a negative year for almost all the listed stocks. With higher interest rates, funding costs for have increased. Inputs such as steel, cement, etc, have also shot up increasing the capex per bed. Newer sources of funding green healthcare infra as a long-term bet which are less tied to economic cycles is emerging. Digitalisation will slow down even further as consumers go back to the old ways. Costs and profitability pressure will increase to maintain the investor interest. PE valuations will continue to get right adjusted to market valuation.
2023 Outlook: Moderate
What’s going wrong: margin pressures, price controls, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
The IPOs in 2021 in the sector have created uncertainty in valuation and investor sentiment. The sector will continue to grow as it did in 2022. New products and customer segmentation is going to be the growth drivers
2023 Outlook: Hot
What’s going wrong: product fit to consumer needs, product approvals, loss ratios, operating cash runway, human capital reduction, consumer offtake and demand, IPOs pricing and valuation
What’s going right: Consumer demand, digitisation, new products
Health Retail
Spends on healthcare are slowing down and so is the discretionary spend. Falling service levels and consumer trusts is at an all-time high. Costs and margin pressures is going to be more acute. Only one major IPO expected in 2023. Many of the late stage start-up are going to scale down or not raise the capital at the expected valuations.
What’s going right: Consolidation, newer cross-vertical innovative business models, profitability focus and valuation being right adjusted
Wellness
Growth which tapered down in 2022 is still going to be sluggish in 2023 as consumers cut back their spends. Digital business model innovation is still lagging behind. Medical wellness tourism will be recover in Q3 of 2023. Corporate Wellness spends which also scale down even further. PE funding is going to slow down even further as valuations squeeze even downwards with margin pressure. Expect one major IPO here.
2023 Outlook: Hot
What’s going wrong: regulation, maturity to scale, down round valuations, slowing of wellness spends, manpower and cost pressures
What’s going right: newer cross-vertical innovative business models,
Alternative Therapies
Growth and new customer acquisition is the new mantra in 2023 as consumer spending decelerates further. New products and therapies that have accessed funding in 2021are going to find it difficult to raise at the expected valuation. Large MNCs are also entering in this space to fight for the consumer’s mindshare. Funding crunch is going affect growth. Expect an IPO. Some of the players may scale down or shut down due to funding. Consolidation activity will increase.
2023 Outlook: Hot
What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, growth, funding crunch,
Let’s wish that we focus on building trust in healthcare for the consumers in 2023 and there is peace across for the world to come out of recessionary trend that would boost the investor confidence across.
Don’t Live with your Ex, Live in the Present for the Future!
I have been observing that many folks on Linkedin has been using their past organisations’ names in their heading as Ex-This and Ex-That. What’s more I am now seeing resumes of some senior executives who are exploring with me also using hashtags # and stating Ex-Designation, Ex-Organisation in their summary. I wonder why these folks are still living in the past and their past organisations, past positions halo? Are they unhappy with their present position and organisations? If living in the past, how will these individuals live up to their future positions and organisations that they aspire? Makes me wonder. Are these co-horts of individuals really have the experience and skills or they are the living legends of their past designations and past companies where they were employed and nothing substantive demonstrate in their present circumstances?
Why this increasing trend of Ex’s as your Headline Defining You?
I spoke with a couple of experts and also conducted my podcast in the past on topics such as the Employee Josh, The Great Resignation, Workplace Happiness. Here are my views why this trend:
During the Covid lockdowns, may lost their jobs due to unforeseen circumstances and had to struggle to find jobs or work multiple part-time jobs as a makeshift
There was the Great Resignation also led to individuals rethinking and making some career shifts and reworking their career aspirations
The Gig Economy Workers and the Controversial Moonlighters who did not have something specific to write about themselves as headlines that defines them
Returning to work individuals who were just to lazy to update their headlines
The present is not better than the past syndrome sufferers
In any case, this is not a very healthy and happy trend. I have pre ordered the book Blindspot by Gallup CEO Jon Clifton which I have yet to receive and read and I will be inviting Jon on my podcast show QuoteUnquote with KK QuoteUnQuote With KK | Kapil Khandelwal KK for his comment on this issue of living in the Ex’s. From the current trend and talking to many individuals I believe that many of these people living with their Ex’s are afraid and uncertain about shaping their future and hence this trend.
Getting out of the Ex’s Syndrome: My Way or High Way!
I had a vision that by age of 40, it would start off on my own. The Lehman Crisis, like the Covid Crisis led my employers to go in a defensive mode and hence I believed it was going to be now or never if I have to shape myself and my future in the future. After I quit Cisco as Managing Director of Healthcare, I used to be ticked off when the media would quote me as Ex-Cisco, Ex-Wipro, Ex-this, Ex-that. I quit my jobs either because it was not challenging or the next job added more dimensions to my experience that I lacked. I kept objecting to the media folks for titling me in such a way and wondered, don’t I have a personal identity? Where was this going? Here are a few tips I used to get out of this Ex’s syndrome.
Take a Break and Think
I took a 15-day detox break to reflect back and think about who am I and why am I what am I? This break not only detoxed my body but made me think in isolation
What defines you and the World in the Future
Assuming that I retired at the age of 70 years, what is the impact I would deliver to the world shaping myself into it. Given my sector experience, I envisioned that Food, Health, Education are the sectors that will continue to grow whether there is Lehman or any other Global crisis till the end of this world and hence focused on these sectors. Next was the issues that these sectors would face and the solutions that I would like to work on. Lo and behold, I had parts of my headline
Promoting Myself and not My-Ex’s
Armed with what I want to shape myself to be. I worked on rebranding myself as me and not on the identity of what I was and what I did with my past employers. I started writing my own columns in the newspaper, mentoring start ups and doing my research on focused industry issues in the focused sectors that I had zeroed in. Very soon, my Ex’s faded out of my profile and I had my own standing and my own position in the industry.
Accepting YoYo
Unlike my Ex-employers who provided the ecosystem and support to grow, I realized that I have this lone battle and I am the last samurai in my own fight to redefine myself. I quickly accepted that You are on Your own (YoYo) and started creating my own organization, associates, partners, collaborators, mentors who would become my backbone of the ecosystem and support to grow which large corporates offered their employees. I accepted YoYo and worked YoYo.
Be the First
The work I did from then on were the firsts in the relevant industry, reshaping and redefining not only your identity in the industry, but leading the industry into it. Mind you it is not easy facing a bullet train in an head-on collision. You need balls. But by then, my experience and courage was enough to face these head on situations with the industry. First Day-Care Surgery, First Offshore Hedge Fund, First Healthcare REIT, First Non-Equity Dilutive Healthcare Growth Fund, First Multi-Platform Podcast, First Holistic Healing Resort in the World are some of the Firsts.
Fail Fast
There is no harm in failure, but you need to fail fast to conserve your resources and personal energy. Also when I did quit, I made it a point to document in my mind the lessons learnt so that I do not repeat in the future.
Where Am I today?
Who the f**k cares I was Ex-This or E-That. I am Kapil Khandelwal KK!
Over the lockdown, I was only doing my regular walks and diet control. This helped me reduce my weight and kept me fit physically and mentally. The result was that I reduced over 15 kilos in weight. However, I needed a full body workout and had to pick up a sport. I am not a gym person and needed to add some workouts for my upper body and endurance. Hence some racket sport would be a great addition. In the past, I had played table tennis in school and college at competitive level. Later, in college I played tennis till I gave up in 2011.
After 10 years, I wanted to take up a racket sport that is easy on my age and is all weather. The choice zeroed down to squash.
Research from Sports and Medicine Favouring Squash
According to Forbes Magazine, squash was rated as the healthiest sports in the World. Forbes consulted with personal trainers, coaches and exercise physiologists, 10 sports were listed as being the ‘healthiest’ in terms of cardiorespiratory endurance, muscular strength, muscular endurance, flexibility, calories burned in 30 minutes, injury risk. Squash took first place!
According to Forbes, 30 minutes spent on the squash court gives you ‘an impressive cardio respiratory workout.’ Constant running and rallies build endurance and muscular strength in your lower body, and squash can even improve flexibility in your core and back, thanks to the twists, lunges and turns necessary to keep the ball on the go.
If you’re wondering what makes squash so healthy, here are the results from the Forbes survey:
Forbes Survey
Here is more, Recently the British Journal of Sports Medicine underwent a study which examined information on more than 80,000 adults across England and Scotland who took part in national health surveys between 1994 and 2008. The study found that risk of death from any cause was 47% lower among those who played racket sports. The study suggested that regularly playing squash could help stave off death the longest.
Scientists have narrowed down the sports and types of exercise that are linked to significantly lower odds of dying before those who do not do those activities. The research concluded that racket sports, swimming, aerobics and cycling seem to be the best for prolonging life, in that order.
Meanwhile, those who partake in racket sports such as squash, also have a lower risk of dying from cardiovascular diseases such as strokes. After taking into account influential factors, the authors of the paper identified which sport or exercise seemed to be the most beneficial.
Compared with the participants who said they had not done a given sport, they found that risk of death from any cause was 47% lower among those who played racket sports; 28% lower among swimmers; 27% lower among those who took part in aerobics classes; and 15% lower among cyclists. No such associations were seen for runners or joggers and those who played football or rugby. When the researchers looked at the risk of death from heart disease and stroke, they found that playing racket sports was associated with a 56% lower risk, swimmers had a 41% lower risk and aerobics participants had a 36% lower risk compared with those who did not participate in these sports.
The researchers did find a 43% reduced risk of death from all causes and a 45% reduced risk of cardiovascular disease among runners and joggers when compared with those who did not run or jog, but this advantage was not deemed significant when influential factors were taken into account. They cautioned that the impact of running and jogging might have been underestimated.
The study suggests that squash is ultimately the best sport to play to ensure a long life.
About Squash
Squash is played in a four-walled court with a small, hollow rubber ball. It is played between two i.e, singles and four i.e, doubles players. The game was first played in 1930 at Harrow School in London, England. The game is an excellent cardiovascular exercise and mostly played in the gyms. It’s not an Olympic sport yet but it features in Commonwealth games and Asian games since 1998.
Gregory Gaultier, Mohamed El Shorbagy, Ali Farag, Nour El Sherbini, Raneem El Weleily are leading the point table at the moment. Joshna Chinappa, Dipika Pallikal Karthik, Saurav Ghoshal and Ritwik Bhattacharya have made India proud in the sport.
Getting Started
Getting started on squash costs as low as ₹5,000. Please use the basic gear available on Decathlon, India website or visit their store. Search | Squash (decathlon.in)
What’s in my squash bag?
#
Gear
Make
Remarks
1
Squash Racket
Prince Thunder Sub Zero 200 – 175 grams
Poor packing, bent while shipment and play, do not buy
2
Squash Racket
Perfly SR 135
Latest product. Pro range. Loved it.
3
Squash Ball
Prince Rebel
High quality Pro
4
Shoes
Plaeto Unisex Squash Sneakers
Loved it. Made in India and endorsed by Rahul Dravid
5
Short and T-Shirt
Sweat Free from Reliance Trends and Decathlon
Good fit
6
Bag
Aurion Squash Zipper Kit Bag
Great price and value
My Squash Starter Kit
I made the mistake of ordering Prince rackets on Amazon. The product is bad as the grip needs to be replaced. Also the Amazon packing and handling is poor. The rackets arrived damaged.
Other Benefits of taking up Squash:
Even at this age
Squash as a game is age-friendly. At 50+, I was able to pick up the game in the first session. The rest is YouTube videos to brush up the 101 and techniques.
Easy to pick up
As I played tennis, squash was really easy to pick up and lean. I can play solo and brush up on my strokes and on court movement alone with a coach to guide me.
Improved cardiovascular fitness
As per my watch, my peak cardiovascular activity at the end of 45 minutes of constant play was 175 bpm. This was 30-35 bpm higher than my usual walk after 45 minutes.
Improved hand-eye coordination
One of the concerns that I had was, Will I be able to see the squash ball which is coming to me at high speed? Need less to say, I was able to affirm that I had not lost my hand-eye co-ordination even after taking up a racket sport after 12 years. I was able to hit the ball from the first shot.
I can play solo
I am able to play the game solo and do not need a team to be accumulated to play the game unlike in racket sport, you need a duo. Just start hitting the ball against the wall!
Increase strength
After a couple of days of playing squash, I see my upper body strength improving
Improved posture
Sitting in front of your laptop, leads to a couching posture. After a few days of playing squash, I could feel my shoulders and back straightening up to a better posture
Learn to run and move backwards
If you can run backwards, your brain is still sharp and focussed. Squash gets you moving forward and backward on court to hit the ball hard enough. So its like a brain tonic for me!
Can play it even during rains of Mumbai
Most of the outdoor sports become seasonal in nature and cannot be played all round the year. Not in the case of squash. All you need is a wall to hit the ball against!
Health benefits
While here are some of the other health benefits of playing squash. Stress reduction, strengthening muscles and joints, with proper elbow and knee guards it is not injury prone, improves mental strength, determination and routine
Harvey, err Hurray! I finally completed watching all the nine seasons, 134 episode series of suits, last weekend. This was one of my wish list for 2021. In the past, I had watched some of the episodes but could not watch the full series. Over 2021 and first quarter of 2022, as I watched through all the episodes of Suits, I realized and learnt a lot about myself not that I am interested in legal stuff, but as a person, how I could relate to Harvey Spectre, the key character in the series. Here are some of my learnings from Suits.
Deal Your Deals Face to Face
Sometimes our deal closures get delayed as the lawyers go behind the veil of emails exchanging different rainbow-coloured lined versions. Harvey and the team closed the issues and deals confronting the counter party face to face. Saves time and money.
Workplace is Your Second Family
Workplace colleagues become you second family if you accept them as your own when you spend a big part of your day with them.
Don’t Poker Odds, Play the Opponent
If you need to have a winning streak and attitude, then you cannot play the odds. It about playing hard on the person’s mind against you on the table. Most deals of cards or corporate deals are won playing on the opponent.
Suit Up to Power Up
The immaculate dress sense gives you presence and swag. This leaves an ever lasting impression and your power on the other people. Therefore the best dress is the first step to success.
Fake it Till You Make It
It does not matter what your pedigree is. You got to own your work and fake it with confidence and act cool. Mike and Harvey could pull this off verry easily. It does not come easily to all and needs to be mentally astute to pull this off.
Josh, Junoon and Jigar
Like Harvey who picked up a rookie who did not even have a graduate degree, I have picked up rookies from coffee shops. All I looked at in the person was if he had the Josh, Junoon and Jigar. For even senior level executives, the acid test for them to make it in is these traits.
If you Don’t Learn to Swim at the Deep End of the Pool, You Never Will
When I was a rookie, I ventured forward to accept assignments to be worked directly under my mentor and consulting partners at Coopers and Lybrand. Like Mike, taking on full charge of the assignment with no experience helped me develop my problem solving capabilities and grow.
Work Hard Till Your Name Speaks for You
Harvey’s reputation as the best in New York did not come easily. It was enough hard work put in to create a reputation for himself. These days many people believe that just personal branding and PR will get them the name. Let’s remember that it can only take you there, but it will not keep you there. So buckle up and work hard to achieve whatever your name stands for.
Don’t Externalise the Blame for Your Failure – Take Responsibility
Ask not what your organization can do for you, ask what you can do for your organization. I have interviewed many senior executives who have been exploring a position with us. Many of them have been a rolling stone and delivered no tangible results. Moreover, they blamed their bosses, their organizations or situations for not been able to deliver results. In other words, externalizing the blame for their shortcomings. Mike and Harvey took the responsibility for the failure and made the attempts to fix the situation right.
Cover the Backs of Your Own People
To Err is Human. However if you have your bosses who are covering up for you, you will be fearless in coming out with innovative solutions to the problem even though you may make mistakes as these were never done before and bound to have gaps and not be perfectly foolproof. Harvey covered up for Mike and he in the end would win it with some innovative legal solution even though it backfired initially.
Superiority and Oneupmanship Cannot be Proven Viable, Collaboration Will Be
Louis’ cravings of proving he is better than Harvey always proved fatal. However, he was proven successful when he collaborated with the team. Therefore jealously-directed behavior is always going to be counter productive.
Be a Finisher
Our HR experts have divided people into different profiles using the MBTI framework. However to for every team to be successful, you need a finisher to see through the process till the end.
Positions Cannot be Demanded but Accepted
Harvey and Louis both demanded to be a junior partner role but Louis won it hands down inspite Harvey being the better of the two. However, Louis’ acceptance rating was lower than Harvey’s. Sometime you may not be ready to be elevated to the position as you may not be ready. Accept the feedback and work on it rather than try to demand and jump.
Between Black and White are the Shades of Grey
There is always some grey matter between what is put in writing in black and white. That’s why you have courts and lawyers to go to. Playing into the grey is not breaking the law. Its redefining and reinterpreting the law to your advantage.
RRR is the Way
Research, Reinvestigate, Repose is the best way to win a dire hard situation and come out with a winning solution when you back is against the wall.
Music is a Therapy
Harvey had a vinyl record collection, may be because his father was a musician. But whenever required he played music to calm down. Music is therapeutic.
Karma will Always Haunt You
Bad karma will always come to haunt you. So always deal right and be on the right side.
Those who Preach Ethics can also be Unethical
Even a Harvard Professor of Ethics can fall for being unethical. So don’t fall for the façade and image of a person.
Degrees Don’t Do Development
Education is never complete. We have to educate continually and grow constantly by being an avid learner. There is not ego in being a learner for life.
Sometimes Smoking Weed Also Gives Success
Weed was the simulant that Harvey and Mike smoked to reimagine a situation to win their case. Also All the Partners of Suits smoked weed the night when their firm was finished to come out with a solution for their firm to survive.
Never Burn Bridges
When you sever the relationship with anyone, don’t ever leave the other party insulted. Hardman was so bruised with insult when he was let gone of his own firm twice, that he always came back viciously to destroy his own firm.
Be Just and Fair and There will be White Knights To Protect You
White Knight are developed by just and fair relationships. These White Knights will come up to get you out of a sticky situation.
Love-Work Relationships
Be honest in your love-work relationships. Everything else is an affair!
Operation Ganga was an evacuation operation by the Government of India to evacuate the Indian citizens amidst the 2022 Russian invasion of Ukraine, who had crossed over to neighboring countries. This involved transport assistance from the neighboring countries of Romania, Hungary, Poland, Moldova, Slovakia to reach India. Over 20,000 medical students were evacuated in Operation Ganga. I have been writing and talking about it over the last 10 years. Let me outline the magnitude of the situation at hand. India constitutes ~18% of world’s population. From here things become a bit trickier. We have world’s 21% disease burden. ie. One-sixth higher proportion of people falling sick. On the clinical manpower shortages, we just have around 8% of the total global labour force of doctors, nurses and healthcare workers to address the 20% of the global disease burden we carry with our people. We are short by 5 lakh doctors, 20 lakh nurses and 30 lakh short of other health workers. Fortunately, we are a net exporter of nurses to the world so we have to also back fill the gaps of nurses leaving out of India for those remaining in India. Coming to the capital to address these gaps, we require close to Rs 30 lakh crores or $430 billion to come to the global average of hospital beds. Another Rs 2 lakh crores or $29 billion is required to build capacity for healthcare manpower. Therefore the total investment is approx $460 billion. To give you the magnitude, 165 countries in the world had a GDP of less than $460 billion in 2018. Given the shortage of merit quota seats in Indian medical colleges, students have to migrate abroad for pursuing their medical education. We need an upstream Operations Himalaya in earnest.
Vision for Operations Himalaya
There is a saying “9 men cannot make a baby in 1 month”. Similarly, students enrolled into medicine today will add incrementally to the workforce in next 4 years. The silver lining is that this capacity building spend would lead to $1.45 trillion of additional incremental to the GDP after 5 years as 1 incremental bed capacity creates 28 jobs over its lifetime. In other words healthcare economy in India as a standalone would itself be #16 nation in terms of GDP. The table outlines the future of Medical Education.
What is the Future of Medical Education? As per the Milbanks Report on the Future of Academic Medicine 2025, there are 3 key trends that are impacting medical education
Digitalization of Healthcare new science and technology, particularly genetics and IT speed of internet and digitalization unimportance of distances 24/7 society lack of agreement on where healthcare begins and ends
Personalization of Healthcare rich and poor gap seeking “wellness” and rise of self-care & sophistication increasing anxiety about security and ethical issues emergent diseases
Globalization of Healthcare gap between what can be done and what can be afforded increasing accountability of all institutions loss of respect for experts (more so after the pandemic) economic and political rise of India and China
Future of Medical Education
There needs to be a top-down vision for expanding the supply of clinical manpower in India which needs to be tied to the healthcare outcomes our healthcare system needs to achieve. The following framework which I presented earlier outlines the process for setting up the vision.
Our Health Markers – Linking Medical Education and Health
In the past I have defined these as the 3 A’s.
Affordability: The Cost and Benefits of Developing Careers in Healthcare in India
Accessibility: Providing trained staff in different parts of India
Assurance: Training to medical professionals meets global standards to perform in any healthcare system
Key Issues: Healthcare Manpower Economics:
It costs approximately Rs 2 crores per seat to set up a medical college for 100 seats in India. While this may be economical, investments in medical colleges and doctor training is a lengthy process; therefore, changes implemented to alter supply do not have immediate effects on the supply of trained healthcare professionals. A recent estimate reveals that as many as 40% of rural posting by trained medical graduates and post graduates in different states in India are not fulfilled. There is a huge shortage of gynaecologists, cardiologists and child specialists in rural hospitals in the government sectors. Hence the government announcement to increase the supply of medical graduates may still not address the accessibility issue. We may end up importing clinical manpower from lower cost destinations if we are not able to produce these cost effectively in India.
Medical education is supposed to be overseen by the different Councils of India, which is responsible for ensuring the quality of both the infrastructure and the professors at India’s medical institutes and also provide assurance that they meet the global standards. Since demand is high, it is difficult for schools to retain faculty over the long term, which creates a lack of continuity in both the school’s practices and its policy. The plethora of new and underequipped medical schools will create more doctors and healthcare professionals on paper, but will lower the quality of the doctors produced, further exacerbating the preexisting shortage. So, while attempting to alleviate a shortage of doctors, India has managed to create a completely new crisis on top of the preexisting one – the shortage of teaching professionals in these medical collages. Various estimates put this somewhere between 75,000 to 100,000 trained teachers and professions currently.
Finally,
Mere policy announcement for opening up more medical colleges in India is not the panacea for solving the shortages in the supply of healthcare professionals and the people to train healthcare professionals. It is time we look at the issues holistically and plan for the future by going upstream towards the Himalaya from the current emergency evacuation of Operation Ganga!
Also Read Article published in my Column – A Dose of IT published in Deccan Chronicle and Asian Age – 14 February 2011
Rs 1 Crore crores Human Capital Impact – A Generation Lost
My presentation at the 21st World Quality Congress a fortnight ago just highlighted the human capital impact due to healthcare and education in India. A whopping Rs 92,28,230 crores to the Indian economy at net present value! This is like creating over 1500 TCS or Infosys or Wipro in today’s size overnight in our economy.
Let us understand, although India has 18% of world’s student population that is the largest in the world, its policy and direction on higher education, including medical and health sciences sector is not clearly articulated towards inclusive development. Regulation, size of funding to this sector, both public and private is one of the key determinants of India’s ability to generate wealth (GDP). Moreover sectorial priorities and directions in sectors such as health sciences, infrastructure if not clearly addressed could create future crisis in the economy and further impede economic growth.
On the demand side, we already know that India contributes to 18% of world’s population, however its share of world’s disease burden is 20%. Hence to treat the increased disease burden, India requires incremental human capital of doctors, nurses and other health workers. But the issues get very grave for India. We have around 8% of world’s doctors, nurses and health workers. Hence we may have to create more human capital in healthcare to treat India’s disease burden. What’s more, of the Rs 490,000 crores we currently require for skills repair to make the current human capital coming out of our colleges and universities, approximately 25% of this is to the medical and nursing schools make the graduate doctors, nurses and health workers job ready.
On the supply side, there are competing careers options and sectors that await the aspirants that are entering the colleges and universities to take up courses. Using the Lev and Schwartz model for human capital valuation, we evaluated the value of different careers in health sciences versus other sectors. What is interesting is that a nurse who decides to work in India human capital value would be Rs 19 lakhs while a surgeons with a master’s degree is around Rs 1 crore. Other non medical sectors are equally attractive in terms of their human capital value. Hence the issue for India is how do we make this attractive for aspirants to take up medicine as a career. While shortage in supply of doctors, nurses and health workers in the economy will obviously push up their human capital value, knowing the disease burden of India. However, we will lose a whole generation of boomers!
But all is not lost for India. Our enrolment ratio in higher education is 12% and is half of China’s at 24% of all students passing out of secondary schools. Hence even to match China’s enrollment, we would create a total human capital of Rs 1 Crore crores using the same valuation model at higher education level. To meet this potential, we need to be opening over 25 colleges everyday for the next 3 years in the brick and mortar world!
We will again fail to create such huge capacity in the real brick and mortar world as we have under supplied the infrastructure sector due to the boom in other sector in the last decade. Hence the only option left behind for the present generation to graduate through higher education is through ICT (online) world. Over the last 5 years there have been many ventures that have come forward looking at the wider opportunity in the ICT space for medical education. However the key barriers have been the regulatory and accreditation agencies that have slowed down the mass adoption.
It is time that we wake up to the huge human capital potential awaiting India. If we fail to deliver, we not only diminish this human capital over Rs 1 Crore crores, but the increased disease burden that I wrote about in my earlier column would cost us over Rs 25,00,000 crores of diminished human capital potential!
It’s all about the quality of human capital we produce and how we produce it that will matter for this generation that is passing us in India. This is the biggest scam that none of our future generations in India will forgive us as Indians.
On 1 February 2022, our Hon. Finance Minister presented her fourth budget in the Parliament and introduced the “Amrit Kaal” in Point 4 of her speech, “we are marking Azadi ka Amrit Mahotsav, and have entered into Amrit Kaal, the 25-year-long leadup to India@100. Hon’ble Prime Minister in his Independence Day address had set-out the vision for India@100.”
Point 5 of the Budget Speech outlined the vision for Amrit Kaal, “By achieving certain goals during the Amrit Kaal, the government aims to attain the vision. They are:
Complementing the macro-economic level growth focus with a micro-economic level all-inclusive welfare focus,
Promoting digital economy & fintech, technology enabled development, energy transition, and climate action, and
Relying on virtuous cycle starting from private investment with public capital investment helping to crowd-in private investment.
The Finance Minister has envisioned to develop ‘sunrise opportunities’ such as artificial intelligence, genomics, and pharmaceuticals to assist sustainable development and modernise the country. However, this is more on the supply side industrial development. But the core issue of healthcare infrastructure is not addressed. Envisioning the Indian population which we would like to be a healthy one by 2047 when we enter India@100. I believe that Budget 2022 missed out a huge opportunity in envisioning Healthcare 2047! Here are my reasons.
Current Undergoing Transformation in Healthcare
The country has undergone a tough time during the pandemic. The Government has played its enabling role in ensuring the supply chain disruptions with China does not lead into a health crisis of sorts. On the other hand, the funding of Covid-Vaccine and immunization has ensured that the country emerges quickly into an endemic phase of Covid pandemic. While this was going on, there was strengthening and upgrade of the digital health infrastructure. The pandemic has also taught lessons to the private healthcare delivery ecosystem to restructure their business models and ensure that there is a push toward lower costs healthcare delivery models. These transformations have demonstrated India’s resilience in its healthcare systems to face emergency situations like the current pandemic.
India’s Amrit Kaal’s Population Demographics
As the chart below demonstrates that India’s population by 2047 will be shifting towards middle age bulge. Over 300 million (~19% of the total population) will be senior citizens by 2047. Our dependency ratio will be around 40%. These 40% will be in the tax paying bracket which will provide the then Finance Minister in 2047 the revenues to spend for different welfare programs including healthcare.
India’s Population Pyramid Shifts to 2047
Lessons from Elsewhere in the World
In early 2000, I was involved in restructuring the healthcare systems of Saudi Aramco. Being the largest oil producer in the world, the company had been underfunding the pension and healthcare benefits of their employees who were going to be retiring in the future. The financing of these healthcare benefits created a financial crisis of sorts which have to be funded.
USA has also being facing such challenges when its baby boomers have now become unproductive senior citizens and their total healthcare bill is currently 18% of their GDP.
Vision for India’s Amrit Kaal Healthcare Delivery to Avoid Maha Kaal
As per current estimates, our country requires USD 400 billion of investments in healthcare infrastructure on our current demography to meet the global norms. There are no allocation in the current National Infrastructure Pipeline (NIP) funding for healthcare. Therefore much of the investment will be private sector driven in the future for healthcare infrastructure.
Such experiences elsewhere in the world remind me that our Amrit Kaal in 2047 does not end up as Maha Kaal of our Amrit Kaal where we would have to look up to Indian Gods who were invoked to end the situation. There have been several demands in the last few budget to accord infrastructure status to the healthcare industry. The current budgetary allocations to healthcare all though increasing has not been sufficient to build capital formation for healthcare infrastructure in the country. From the current 2.5% of GDP, there needs to broaden the spend on healthcare. We need the real picture of the input and outputs in healthcare. With the current GST regime of zero tax on healthcare services, we are not able to gather the real value of healthcare in the country and healthcare should be under minimum GST slab so that there is pass through benefits of the inputs that are set off. This will lead to a lot of transparency and provide real hard estimates of healthcare spend of the country.
Assuming by 2047 our dependency ratio will be lower than today. Which means that the total taxpaying population in 2047 may be same as today or even lower. There needs to be a plan to ensure that current taxes from the current population who will become senior citizens by 2047 will be underfunded like in the examples that I have mentioned below, leading into a budgetary crisis.
In all earnest, given the current constraints the current budget 2022 could do so much for healthcare. But now that the Amrit Kaal is out of the bag, there needs adequate focus to healthcare to avoid healthcare Maha Kaal in 2047 when we enter India@100.
2022: Healthcare and Life Sciences Investment Outlook
Since 2013 our algos have been accurately predicting the investment heatmap in the healthcare and life sciences in India which were predicting with 95% accuracy on the sectoral investment cycle in India till the end of 2019. Since the Covid Pandemic in 2020 we lowered levels of prediction accuracy like we started back in 2013. While we worked on the Heat Map for 2022, we realized that every new wave of Covid is like a black swan event and raises the uncertainty and reduces the accuracy of the predictions with a reset. For 2021, we released two sets of heat maps, one for the healthcare and life sciences sub sectors and another for the States. Since the Central Government took the mantle of immunization, the need for updating state-wise heat map for 2022 is not relevant and not much data is being updated except for the electioneering noise and promises by political parties and immunization achieved.
2022: A Year of Consolidation and Tempering Expectations
2021 was the record year since 2013 when we started tracking the healthcare and lifesciences investments. The investments across the board was the highest, with the maximum number of IPOs and M&A activity, with over USD 2.2 Bn in funding across all the sectors in 2021. Some of the investment activity we predicted for 2022 preponed to 2021 due to positive investor and market sentiments and uncertainty of the future waves of Covid. Therefore, 2022 is a year of consolidation and tempering the tempo of investments.
2022 India Healthcare and Life Sciences Investment Heat Map
Let’s relook at the board trends for 2022 in terms investment activity and trends.
Healthcare Financing
2021 was an all time-high for healthcare financing sector. However, recent clamp down of Chinese funded consumer financing fintechs is going to temper down the healthcare financing sector. Health Tourism related funding is only going to take off in Q3. Consolidation activity to slow down.
2022 Outlook: Hot
What’s going wrong: regulation clamp down, right bite for the consumers, reach and penetration, higher debt financing costs, slower non-discretionary and elective healthcare spend, delaying of healthcare spend and health tourism, new wave restrictions, shortage of digital workforce
What’s going right: India stack digitisation, consumer borrowing to spend on non-electives, immediate gratification, reduced household savings supplemented by borrowings
Medical Education
Key shortages of healthcare frontline workers was very apparent during 2021 Covid Crisis. The need for regulatory regime to upskills is still being reworked. Healthcare could be the key job creator. Regulatory reforms are urgently required to push digitization and newer business models for upskilling existing workforce. Churn in ownership of assets due to consolidation activity will continue albeit at a slower pace.
2022 Outlook: Hot
What’s going wrong: regulation, corruption, no vision, skill shortages, alignment to new age care, increasing debt burden, new age skills certification, funding dry up
What’s going right: skill demand, digitisation
Med Tech Innovation and Life Sciences Discovery and Clinical Development
India has proven to be the vaccine supplier to the world in 2022. Capacity creation and new product development will continue. Dependence on Chinese supply chain will reduce further as alternatives are developed indigenously. Expect a few IPOs this year in this sector. Government grant funding will temper down.
2022 Outlook: Hot
What’s going wrong: innovation pipeline, IP regulation, regulatory bottlenecks on clinical development, newer skill sets for research and acceleration, Government grants and funding slow down
What’s going right: Human capital, cost advantage, emerging social innovation models, lower dependence on Chinese supply chain
Pharma and Therapeutic Solutions
M&A and consolidation activity was at a record high since 2016. Shortage of digital workers will slow down the digital transformation activity. As China substitution and supply chain threats mitigate, the Government will temper down their PLI support as well
2022 Outlook: Hot
What’s going wrong: price controls, policy log jam, wrong product portfolio, innovation and scale up, global or China-level cost competitiveness, exit of PLI incentives, shortage of skilled digital workforce
What’s going right: cost advantage, distribution infrastructure, digital business models, Government incentive programs
Healthcare Providers
Funding costs will zoom up and will make access to long-term capital dearer. Huge churn in asset ownership and consolidation activity will continue. Digital transformation activity will slow down due to skill shortages
2022 Outlook: Moderate
What’s going wrong: margin pressures, price controls, GST slabs rationalization on inputs, execution of programs on the ground, PPP in healthcare, supply and demand mismatch in micromarkets, debt financing costs, gun powder churn, operating cash runway, liquidity and working capital crunch
What’s going right: Digital business models augmentation, asset-lite models
Healthcare Insurance
The IPOs in 2021 in the sector have created uncertainty in valuation and investor sentiment. The sector will continue to grow as it did in 2021. Digital push and intermediation will be the key to growth.
2022 Outlook: Hot
What’s going wrong: product fit to consumer needs, product approvals, loss ratios, operating cash runway, human capital reduction, consumer offtake and demand, IPOs pricing and valuation
What’s going right: Consumer demand, digitisation
Health Retail
The major consolidation of the health retail after hectic M&A activity of 2021 will slow down the decibel levels of consumer discounts and offers to focus on generating healthy bottom lines. Only one major IPO expected in 2022.
2022 Outlook: Moderate
What’s going wrong: regulation, consolidation, slower consumer spending, excess funding for GMV and operating cash runway
2021 was the highest growth year in the last 10 years on the back of discretionary consumer spending on wellness. Digital business model innovation is still lagging behind. Medical wellness tourism will be recover in Q3 of 2022. M&A activity and consolidation to continue in 2022 but at a slower pace. Corporate Wellness spends to continue to fuel growth in 2022
2022 Outlook: Very hot
What’s going wrong: regulation, maturity to scale, new mass market business models
Newer products and therapies that have accessed funding in 2021 will continue to fuel growth and investments. Adoption of alternative therapies into mainstream allopathic as complementary treatment is going to accelerate. Newer product development and business models is the key to sustained growth and success in 2022
2022 Outlook: Hot
What’s going wrong: maturity to scale, consumer education and confidence, clinical research, new product development, inflated valuation, over capitalization and cash burn to gain market share
Who is Twitter to Adjudicate Life Sciences Opinion?
Preamble
I had written in my blog Ban Twitter | Kapil Khandelwal (KK) last year as Twitter refused to follow Indian regulations and also muzzle certain sections of religious and political voices and opinion from India by banning or suspending their twitter handle. Under the leadership of the New CEO, Twitter seems to be adjudicating opinion on Life Sciences and that too experts. The latest controversial account suspension is of Dr. Robert Malone.
Malone is the father of mRNA vaccines. mRNA is the same technology used in COVID vaccines by Pfizer, J&J, etc in the US. He has served as an adjunct associate professor of biotechnology at Kennesaw State University, and he co-founded Atheric Pharmaceutical, a company that was contracted by the U.S. Army Medical Research Institute of Infectious Diseases in 2016. Malone has long been an outspoken critic of the global COVID vaccine rollout, warning of the risks of a rushed release and saying normal procedures have not been followed throughout the process. He has been crusading to stop vaccines from being mandated for children, and to stop corruption in the government and the medical-industrial complex and pharmaceutical industries.
He had over half a million followers on his Twitter account. On 27 December 2021, his account was permanently suspended for not adhering to Twitter’s Covid 19 misinformation policy.
He can still be followed via his substack page.
Muzzling Divergent Scientific Opinion on Social Media
As this pandemic is playing out, the so called official expert spokesperson of the US Government have been proven time and again how wrong they have been in guiding the public. In fact on of the experts and advisor to the US President, had gone on to rubbish the work of our scientist at IIT Delhi who published that they discovered four insertions in the spike glycoprotein of the Covid-19 virus which they say are not present in other coronaviruses. These experts have been using social media to guide or misguide the masses. As a result, the public opinion on the official experts is now suspect and individuals now want to assess both sides of the scientific views before excessing their personal judgement.
Twitter does not possess scientific material peer reviewers to state whether a certain scientific opinion is valid or not. It can at most highlight as not peer reviewed by a wider scientific community. This sort of baning scientific expert opinion is a dangerous trend. In future, the big-pharma can short change the scientific community’s opinion by muzzling their voices and views on social media. For the individuals who are interested in knowing the scientific voices will have to now put pressure for a much open, unbiased social media to allow for alternative scientific views to emerge.
On December 20, 2021, Oracle Corporation and Cerner Corporation jointly announced an agreement for Oracle to acquire Cerner through an all-cash tender offer for $95.00 per share, or approximately $28.3 billion in equity value. Cerner is a leading provider of digital information systems used within hospitals and health systems to enable medical professionals to deliver better healthcare to individual patients and communities.
My Tryst with Cerner and Oracle Along with My Journey
Cerner has been a leader in the health information systems since it was founded as PGI & Associates (after its three founders Patterson, Gorup and Illig) who quit their jobs from Accenture (then Arthur Andersen) in 1980s. I had the chance to work closely with Neil Patterson when Cerner expanded outside of US in Gulf region with the implementation at Saudi Aramco (now Saudi Aramco-John Hopkins) in early 2000s.
During the same time, I had worked with Oracle leadership in the Gulf region on several roll outs in the Government sector.
In early 2000s, Saudi Aramco, world’s largest producer of crude oil was migrating from mainframe environment and had embarked on world’s largest big bang implementation of SAP and corporate performance improvement program in the world. To migrate and manage its in-house healthcare delivery to its employees, contractors and their dependents in Kingdom of Saudi Arabia (KSA) and overseas, the choice was between SAP Healthcare and Cerner. Neil Patterson, the co-founder of Cerner made multiple visits to Dharan, the headquarters of Saudi Aramco to pitch and win the first major implementation overseas. That’s was the beginning of my personal friendship with Neil. As Neil would visit Dharan on quarterly steering body meetings, we would share a quiet dinner and discuss his vision about Cerner and his international growth initiatives before he boarded his private jet to Kansas City. Over the years, Cerner witnessed major growth outside of the US, including some inorganic growth acquisitions like Siemens HMIS and starting their offshore development centers in Bangalore, the largest base after Kansas City. Unfortunately, Neil succumbed to cancer in 2017. I lost a fantastic friend and mentor forever who had guided me in my career at different points in time.
While at KPMG Consulting in the Gulf, I made several bids with Oracle to the various governments in the Gulf. Oracle was great with their database and their product architecture; their major issue was that they lack clinical prowess to manage healthcare either in hospitals or with state healthcare. It was around this time that I was associated with Sam Rao who was Head of Business Development and Large Deals at Oracle. Although, he understood healthcare, but the product deficiencies of Oracle was just not a great fit for running eHealthcare initiatives for the population of GCC countries. Later Sam and I collaborated to start out XY Clinics (an innovative nutri-genomics and diagnostics venture) in GCC and India and had a great run and exit
Flash forward: Many of Cerner and Oracle leadership in the US and Rest of the world either worked with me or had been a partner with me on some of the healthcare initiatives. One of them being Dr John Glassier who I also invited on my podcast QuoteUnQuote With KK.
How Cerner Acquisition Helps Oracle and Vice-versa
Oracle has always had a weak presence in the clinical healthcare information management system. Although it has a great rooster of clients not only in the us but around the world. A mega-29 billion dollar deal will signal that Larry Ellison, Oracle’s founder is serious about getting a big leap into the healthcare sector once again. Its earlier acquisitions in healthcare were small and somewhere did not change Oracle in its ways of doing business with healthcare clients. Therefore Oracle Returns. In the post-pandemic era, as healthcare providers and Government healthcare systems, step up to spend more on their digital and clinical transformation, Oracle-Cerner would definitely be a very strong option. I am informed from my ex-colleagues and industry insiders that Cerner will be kept as a dedicated business unit within Oracle. This would be a very positive development both for Cerner and Oracle as independence of Cerner in the larger Oracle would be a critical success factor for this acquisition. As for Cerner, Neil vision and dream of taking Cerner globally as a leading healthcare information systems player will come true posthumously.
Wishing Oracle and Cerner All the Very Best in their combined journey!
