PPP model in Diagnostics Industry...short ๐งต
Private diagnostic players minted great sums of money during covid-19
Was recently looking at a company that follows PPP model in Diagnostics space
What is PPP model and how does it work?
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Private diagnostic players minted great sums of money during covid-19
Was recently looking at a company that follows PPP model in Diagnostics space
What is PPP model and how does it work?
(1/n)
The diagnostic market in India is around Rs 75,000 crore divided into two parts โ private and government
PPPs are fast becoming a preferred mode of delivery across various geographies of the country with main focus on under-penetrated rural, remote and semi urban areas
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PPPs are fast becoming a preferred mode of delivery across various geographies of the country with main focus on under-penetrated rural, remote and semi urban areas
(2/n)
PPP (Public Private Partnership) Model in Indian Diagnostics Industry?
- In PPP, Central & State Govts. invite private, established & qualified diagnostic players to perform diagnostic services (pathology & radiology) under tender based long-term contract of 5-10 Years
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- In PPP, Central & State Govts. invite private, established & qualified diagnostic players to perform diagnostic services (pathology & radiology) under tender based long-term contract of 5-10 Years
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- Govt. contributions vary from providing land/space, upfront capital infusion, basic facilities and giving financial concessions on the capital infused by the private players
What are the objectives (refer attached image)
(4/n)
What are the objectives (refer attached image)
(4/n)
Finer points of PPP model:
- Center/State governments float the tenders for providing affordable diagnostic services in rural and remote areas
- Private players submit the bids for lower testing rates which are generally 50-60% lower than standard private facilities
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- Center/State governments float the tenders for providing affordable diagnostic services in rural and remote areas
- Private players submit the bids for lower testing rates which are generally 50-60% lower than standard private facilities
(5/n)
- Private player performs free diagnostic services for those who are covered under Central or state govt health insurance scheme, having BPL Card, etc. Diagnostic charges are reimbursed by the Central Govt, State govt or National Health Mission scheme
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- For others, govt approved rates are applicable and collected on cash or digital basis
- The land or the space for setting up the diagnostic services are generally provided free of cost by the govt.
(7/n)
- The land or the space for setting up the diagnostic services are generally provided free of cost by the govt.
(7/n)
How are private players able to offer such low testing rates?
- Large addressable customer base from Day 1 of operations
- Zero doctor referrals fees for patient acquisition and limited marketing expenses
- Zero rentals to government hospitals for providing the space
(end)
- Large addressable customer base from Day 1 of operations
- Zero doctor referrals fees for patient acquisition and limited marketing expenses
- Zero rentals to government hospitals for providing the space
(end)
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