Mooring Around the Future of Chips in AI-dominated India

Mooring Around the Future of Chips in AI-dominated India

Podcast

QuoteUnquote with KK and Nitin Dahad, Tech Evangelist, Editor embedded.com, Writer

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Raghu Panicker, CEO of Kaynes Semicon, gives us some background to the origins of the current semiconductor industry in India from the 1980s by two key figures: M.J Zarabi and Wally Rhines.

Hitesh Garg, India country manager for NXP Semiconductors, talks about key markets for NXP globally and in India, particularly automotive and industrial. 

Satya Gupta, a veteran of the Indian electronics industry in India. He has several influential roles in the industry and in policymaking

Bhanupriya Krishna, founder and managing director of Perceptives Solutions, talks about the lack of talent for addressing the semiconductor manufacturing industry in India

Pradeep Vajram challenges the current thinking in India to develop chips and IP for India only, highlighting that scale is key for investors in Indian semiconductor startups

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Where Are We Going Wrong with Unified Health Interface (UHI) – the UPI for Healthcare?

Where Are We Going Wrong with Universal Health Initiative (UHI)?

Introduction

In 2020, I wrote a blog titled From Telegraph Road to US$50 Billion Digital Health Silk Road Digital Health Silk Road Archives | Kapil Khandelwal KK celebrating the announcement of the National Digital Health Mission (NDHM) under the National Health Authority (NHA). We had worked out the direct and indirect impaction to the Indian economy that such an initiative will result. Over the next few years, the turn of events have led the country to not move forward on such a huge initiative for the healthcare of people of India. Let’s look at the turn of events leading up to the recent development and the way forward from here.

Key Developments in the Journey of Developing our Universal Health Initiative (UHI)

‘National Health Stack – Strategy and Approach’

In 2018, NITI Aayog released a document setting out the building blocks of the National Health Stack as ‘common public goods’ which are essential for an implementation of digital health initiatives in India. The key components described in the National Health Stack were national health electronic registries, claims platform, federated personal health records framework, national health analytics platform, and other horizontal components.

National Digital Health Blueprint (NDHB).

In 2019, Ministry of Health and Family Welfare (MoHFW) released the National Digital Health Blueprint (NDHB). The need for creating a framework for the evolution of a ‘National Digital Health Ecosystem’ (NDHE) – an ecosystem and not a system, was recognized in the NDHB. The NDHB lists out principles, building blocks, applications and digital services, standards, institutional frameworks etc, to create such an ecosystem.

National Telemedicine Guidelines

During Covid, the Medical Council of India (MCI) quickly released the National Telemedicine Guildlines to enable tele consultations so that limited capacity of the physicians is utilised for remote consultations during the pandemic and lockdowns.

Consultation Paper on Unified Health Interface (UHI)

In March 2021, MoHFW released a consultation paper on Unified Health Interface (UHI) to replicate its digital-payment success in healthcare. Taking cues from the Unified Payments Interface (UPI), it set out to establish a similar system for healthcare inclusion and universal health for the people on a ‘Bharat Stack’ for Healthcare. I am sure many of the tech industry bodies such as Nasscom, iSpirit and CII and FICCI would also have been consulted in framing the Consultation Paper.

Current Status

iSpirit, Indian tech industry body was appointed by National Health Authority (NHA) to lead the development of UHI. There have been delays in operationalizing the UHI and recent media reports state that key disagreement between the NHA and iSpirt on the nature of the UHI network-and iSpirit walking away from the project.

Why Did UHI not take Off?

iSpirit and Media View Points

There is a long format article from Ken that has been doing rounds and my talks with some of the Healthtech and other VC investors interested in this initiative have been summarized here:

  • Limited use of iSpirit partners for building components
  • Rationale of iSpirit partners that were short-listed for pilot and those left out for the wider roll out in the next stage
  • Conflict of interest between the iSpirit partners shortlisted that would push their product/components into the UHI pilot making it not a fully open system
  • Lack of openness between the iSpirit and NHA on the development and roadmap for wider participation of healthcare industry players
  • Slippage of deadlines for the teleconsultation solution multiple times drawing the ire of NHA
  • Self-doubts within iSpirit on the future success of the pilot and the eventual scale of UHI
  • iSpirits experience with other non-healthcare solutions roll-outs on the way forward in the roll out of UHI to the nation which is not true for healthcare as compared to fintech, social commerce and other digital solutions

My Views on Current UHI’s State

Let me tackle the lack of understanding of the reality of the Indian healthcare system and how it is evolving in the future for the UHI to succeed. These are some of the points that I have made in the past in various industry forum presentations, my articles and blogs. Then I will address the way forward from here for UHI to succeed

India’s Scale in UHI will be an Aggregation of its Diversity of People – The Markers for Healthcare Delivery

Based on my experience of rolling out the 104 and 108 helplines in late 2000s, for any solution to be successful, especially the teleconsultation that iSpirit and NHA were developing, it has to build for the different languages and dialects prevalent not only in a region of a state, but across states due to floating population. As recently as covid pandemic, when we were rolling out CovidBots for triage on the 104 for a few states, we have realized that nothing has changed in the last 20 years in India. The figure below provides the language diversity for which we will need to implement not a one product fits all under UHI.

India Diversity in Numbers – Genetio-Lingustic Segmentation
India Diversity in Numbers – Genetio-Lingustic Segmentation

With the best of the cloud services, India has a limitation of 23 languages being provided with voice translation capabilities.

What Scale are we talking of?

Based on our population genetic, epidemiological, chronic disease burden, I had released this state-wise risk map of India in 2010. This show that we have around 50 million households which have high-risk burden. This is twice as big as the population of USA. This is expected to touch over USD 150 bn of spend not just on curative but preventive care.

What is the scale?
What is the scale?

So what is the scale we are talking of? Is this not sizeable according to iSpirit? How does this compare with the subscribers are using UPI? As of July 2021, there were around 130 million monthly active subscribers on UPI after 5 years of its launch. As per industry estimates if I recall, the digital health services teleconsultations peaked during Covid lockdown and were around 100 million monthly active subscribers/teleconsultations consultations. This is even before the launch of teleconsultations module of UHI. Can you imagine the multiplier effect once it goes mainstream?

Why Not Partner with Nasscom’s Tech Services Companies?

On the issue of openness between iSpirit and NHA on the development and roadmap for wider participation of healthcare industry players, my take is that iSpirit’s objective is to promote product players from India. But, I must remind that large IT services players like Wipro, Infosys, Cognizant, TCS, IBM, Tech Mahindra, etc who have been building point-solutions for some of the leading healthcare players and governments globally for over twenty years. Not inviting and leveraging these partners from Nasscom is also one of the reasons for failure of UHI

Learning from Past Mega Global Healthtech Product Failures

I have written in the past on why global players with deep pockets like Google, Microsoft, IBM, etc have failed on their healthcare initiatives. National Digital Health Archives | Kapil Khandelwal KK Haven’t we any learnings from such mega failures?

Why Did Google Health Fail
Why Did Google Health Fail

Digital Health Penetration Across States is Not Uniform Nor is State-wise Regulations

In our 2021, State Healthcare Heat Map 2021 States Heat Map | Kapil Khandelwal KK, the first of its kind report for which are the hottest states to invest in healthcare, we have covered factors like Penetration of Digital Health. It is very clear that UHI to be successful, it is not going piecemeal staggered solutions go-live, but a big-bang all UHI solutions go-live in the states with highest digital health penetration. Moreover, have we not learnt lessons on how each of the states managed the delivery of Covid Care Sustainability Of Digital Health | Kapil Khandelwal KK as healthcare is a state subject. Have we not forgotten that West Bengal is not there for running the Ayushman Bharat. Nor does it run the National Health Emergency Ambulance number 108. Assuming, even if UHI would have gone live, there would be another layer of customisation that UHI would have to roll out for each of the states where the healthcare is delivered. Different states are at different maturity of implementation of various medical criminal code and consumer protection. Such state regulations and code cannot be circumvented by one EULA of the UHI and the modules. We are not transferring money like UPI, we are managing health of the people where there are risks of lives.

2021 States Investment Heat Map
2021 States Investment Heat Map

Start with the Building Blocks

Post Covid, a lot has changed. Since UHI wanted to start with teleconsultations, can we even get the ICD-11 codes live in India so that we are up to international standards? Since outpatient consultations/teleconsultations are predominantly out of pocket spend, there is least incentive for the care giver on the street to fill up the forms and ICD codes. With ICD coding in the UHI, AI tools at the back end would be able to assist not only the care givers but also the consumers, the other ancillary benefits of coding would follow.

In Conclusion

Setting aside the differences, it is clear that UHI’s scale and opportunity is even bigger than UPI’s and its impact on the people of India once it is fully implemented and evangalised by each of the states of India. Comparing success of UPI to UHI will be a totally wrong starting point. UHI is like the GST (GST has its own set of issues) with each state having its say in the GST Counsil. Let us reenergize the UHI with bringing in the States and Nasscom players into the solution to make it more viable and successful.    

Budget 2022: When is Healthcare’s Amrit Kaal Coming?

Budget 2022

Preamble

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
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.

The Oracle Returns

oracle-and-cerner

Background

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.  

https://open.spotify.com/episode/5np4XQN473NTia8xeHcvyF?si=WpSetp-xT-6OQ6abID-LZg

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!

That’s Lazer Sharp Vision, Literally!

That’s Lazer Sharp Vision, Literally!

Background

Perfect human sight is the greatest gift that a man can get. Years ago, I remember on one of my Rotary Eye Camps in a village near Bangalore, an old lady came to the Eye Camp with the help of her assistant holding her and guiding her to take the steps due to poor vision. The doctors checked her eyes and gave her a pair of spectacles. On wearing the spectacles the lady was overjoyed and filled with tears. She could see perfectly which she had not for years. Her dependency on others and quality of life improved immediately. This incident bought emotional tears to all the people around her. Like the old lady, there are millions of Indians who have poor quality of life due to lack of proper sight as they cannot afford proper spectacles to correct their sight. I seem to be amongst the more fortunate ones who can afford the luxury of sight correction.

My Issues with Hypermetropia, Myopia and Presbyopia

As far as I am concerned, I have always tried to maintain my eyes inspite of long-distance sight (hypermetropia) correction from my teenage years. As I aged (presbyopia), the complexity of near-distance (myopia) reading and long-distance sight have emerged. My lenses that Essilor fitted to combine both of these into one lens in a spectacle resulted in near catastrophe while driving on the highway. As a result I preferred to maintain two sets of spectacle for hypermetropia and myopia. With presbyopia, I have to fit new lenses as the vision for hypermetropia and myopia keep changing. This means a new set of spectacles every year or so to maintain proper vision.

My Experience This Time Getting Vision Correction on Digital

Every year, I visit the optometrist around the festive season to get my vision tested and procure new set of spectacles and lenses as per the advise of the optometrist. Given the lock down situation, I thought of procuring the spectacles through the digital online platforms like Myntra, LensKart, Titan Eye and Amazon, etc rather than shopping for at the physical optician stores. I wanted to try out Lenskart as my daughter had bought two pairs of spectacle recently and was a very loyal customer of them. While all the catalogues of Myntra, Titan Eye and Amazon offered just the spectacles, Lenskart offer the spectacles and a zero-powered bluecut and anti-glare computer lenses fitted along with it. Similar spectacle designs on platforms other than Lenskart turned out to be cheaper as Lenskart was loading the price to the lenses additional. I needed powered lenses to be fitted at an additional cost and throw away the lenses already fitted with Lenskart spectacles.  

My WhatsApp Interaction and Talk with Amit Chaudhary of Lenskart

Pissed off with the experience, I WhatsApp Amit Chaudhary, Founder of Lenskart. That’s when I realized the business model of Lenskart versus other digital and brick and mortar opticians out there. Here are some of the excerpts of my telephonic conversation with him

  • Lenskart is the largest AR eyewear venture in the world
  • Over USD 150 mil of eyewear is sold by them through their platform and lenses are manufactured and fitted through their fully-automated robotic facility
  • AR technology and fully-integrated robotic manufacturing facility makes them the cheapest provider of eye wear in the world due to the scale
  • They are targeting a total addressable market of around 1.5 billion eyes in India
  • They are therefore integrated to provide the full solution of spectacles and lenses as operationally there are challenges of product warranty when customers buy spectacles from them and fit the lenses outside at a local opticians.

There is a stand out quotes that while talking with Amit that summarized their business model

“We are the Maruti of the eye wear business. Customers like you form the top 10% who are the Ferrari’s who would like spectacles not only for functional, but for esteem value”

I like the lazer sharp vision of Amit. As entrepreneurs like him who raise lot of VC and PE capital at some time want to dominate and move away from their core business model and value proposition in the pressure for growth, profitability and valuations.

Although Amit offered to service me as an exception, but that is not core to their way of working. Consumers sometimes miss out on this and crib and bad mouth the start ups on social media, missing out how these start ups are making the world better by offering sight to millions by being cheaper, better and faster. Remined me of the old lady in tears who could see properly and so did I on Amit’s perspective.

Kudos to such start ups which are bringing in technology and production techniques to reach scale!