Pristyn Care’s model for success

It’s been a cruel and harrowing summer for healthcare providers across the country as India grappled with the severe second wave of the Covid-19 pandemic. And they have been left as helpless as anyone else by the acute shortage of medical oxygen, ventilators, hospital beds, intensive care units (ICUs), and essential medicines across the country.

It was no different for the founders of healthcare startup Pristyn Care.

“I was getting about 10-15 phone calls every day from friends and family who were either looking for a ventilator or a medical oxygen cylinder for Covid-19 patients,” says 35-year-old Harsimarbir Singh, the only non-medico among the startup’s three founders. “And it was the same for my co-founders and col - leagues at the company as well.”

Pristyn Care itself was fielding more than 200 phone calls an hour in April, with callers pleading for either a ventilator, or a hospital bed, or medical oxygen, or antiviral drug Remdesivir. But none of these fell within Pristyn Care’s speciality. The startup, founded in August 2018, focusses on elec - tive surgeries such as cataract, hernia, or hysterectomies, with its asset-light business model meaning it mostly rents the idle infrastructure at hospitals to perform these procedures.

Nevertheless, its founders could not just stand by at this time of crisis. They had to do something.

So, in the first week of May, they set up a Covid-19 treatment centre in Gurugram, where Pristyn Care is also based. The 70-bed facility is equipped with oxygen support, intravenous medication such as antibiotics and steroids, and a round-the-clock team of specialist doctors and nurses. It also provides diagnostic services and CT scans through its network of government-approved labs and runs an emergency ambulance service. In other words, services that are mostly antithetical to Pristyn Care’s business model.

“We went out of our comfort zone and started the facility tying up with one of our partner hospitals because you need specific permissions and [a] licence from the government bodies to run a facility for Covid-19 treatment,” says Vaibhav Kapoor, who, along with Garima Sawhney, are doctors among the founding trio. They are gearing up to open a similar centre in Bengaluru.

“In times like these, it is our responsibility to support the health - care community in every possible way. Our medical and operations teams working at the frontline have put in a lot of effort to make this possible,” says Singh.

It is this same sense of responsibility Pristyn Care has for each of its patients.

During last year’s national lockdown to curb the spread of the Coronavirus, the government discouraged all non-critical surgeries, posing a headache for Pristyn Care. At this time, one of its patients in Delhi had scheduled a haemorrhoids (piles) surgery. It was a semi-emergency as the patient’s haemoglobin level was running alarmingly low. But on the day of the surgery, the pa - tient could not reach the hospital as his taxi cancelled saying the police had restricted vehicular movement.

“When the patient informed us about this, one of our colleagues who leads the business development vertical, volunteered to pick up the patient and take him to the hospital on time for the surgery,” recalls Singh. The operation went smoothly, and the patient later wrote a detailed re - view on Google thanking the team, he adds.

That’s not merely a nice bow to tie up the story but highlights the very essence of Pristyn Care. Since its start in 2018, exemplary patient care and service have been as pivotal to the startup’s business as its asset-light model has been. “After dealing with our first 100 patients, we realised that the only product differentiator that we have is providing impeccable service to our patients who come to us for surgery,” says Singh.

“The first thing that struck me when I met Harsh [Singh], Dr. Kapoor and Dr. Sawhney back in 2018 was their first-principles approach,” says Ashish Agrawal, principal, Sequoia Capital India. “They had experienced the consumer problem first hand while interacting with patients and they were dedicated to solving it using a tech-driven approach. They had a clear focus on surgeries and their bias for action impressed us.”

Sequoia became Pristyn Care’s first institutional investor with a $4-million investment in February 2019. The company has raised $81 million to date, including $53 million this April in a Series D funding round led by U.S. investment firm Tiger Global Management, with existing investors Sequoia, Humming - bird Ventures, and Epiq Capital also participating. That round valued the startup at over $550 million.

While funding is no proof of success, it is a pretty good gauge of potential. And Pristyn Care has lived up to its promise by managing to differentiate itself in a highly competitive and regulated healthcare market dominated by large hospital chains. One way it has done so is by offering a full range of pre- and post-surgery services, including processing health insurance claims and hospital admission paperwork, doorstep pick-up and drop services, home delivery of medicines, and free post-surgery consultation.

Of course, the healthcare startup is helped by the fact that the surgeries it performs—cataract, hernia, hysterectomies, cosmetic, and sinus, among others—can be completed in 4-6 hours and generally don’t require an overnight hospital stay. On the other hand, tertiary or primary care surgeries such as heart bypass, renal or haemodialysis, neurosurgeries, and other complex procedures require ICU care and critical medical backup as well as days of hospital stay.

Pristyn Care owns a chain of 100-plus clinics that mostly handle consultation services and account for only 10% of its total surgeries—ones that are generally less invasive and can be completed in a maximum of 30 minutes. The rest of the surgeries are done at any one of the 300-plus hospitals it has tied up with across 30 cities and towns.

This means that, unlike full-fledged hospitals, Pristyn Care is not saddled with fixed asset costs, which can be a major drag on finances, especially when unused. Instead, it rents such idle infrastructure—beds, operating rooms, ICUs—at its partner hospitals for an agreed fee. It is this asset-light, scaleable business model that convinced Sequoia to invest in Pristyn Care at an early stage, says Agrawal.

But this model isn’t limited just to infrastructure. The company has 200 full-time surgeons on its payroll and close to another 100 visiting consultants on its roster who work for the company when their services are not required elsewhere.

“What Pristyn Care is trying to do is bridge the demand-supply gap within the healthcare sector by matching the latent capacity of infrastructure and clinical competence with demand for services from patients,” says Vishal Bali, executive chairman, Asia Healthcare Holdings.

This model helps Pristyn Care conduct a large number of surgeries—about 1,500 a month in pre-Covid times—which is typically impossible for a midsize or small hospital. After a lull last year due to the pandemic, business has picked up and the startup claims to have hit a peak of more than 3,500 surgeries in March, taking its lifetime total to over 25,000. It is targeting 50,000 surgeries this year.

The ambitious target notwithstanding, the company has to play the volume game to run a viable business given that elective surgeries cost far less than tertiary care surgeries. For example, while a hernia operation can set one back by about ₹57,000-₹2 lakh, cardiac surgeries generally start at ₹2 lakh and go up to ₹5 lakh, according to the state-backed Services Export Promotion Council’s healthcare tourism website. On the flip side, there are almost 1,000 hernia surgeries conducted for each cardiac surgery, estimates Kapoor. In fact, the co-founder estimates that almost 85% of the surgeries globally are secondary care surgeries.

But how do these big numbers stack up when it comes to unit economics? Pristyn Care has achieved positive unit economics per surgery, claims Singh, declining to go into specifics. Broadly, this means that after accounting for hospital rental fees, a surgeon’s fees (if any) and other costs such as for customer acquisition, the company is pocketing money on each surgery. Pristyn Care is currently clocking an annual revenue run rate of $30 million, says Singh.

“The Pristyn model is akin to OYO in the healthcare world,” says Bali. “But healthcare delivery requires very high standards of quality, accreditation, and safety processes around patient care.”

Even here the startup says it has a stringent and robust system in place. “We have consultants who take care of quality checks before we onboard a hospital in every city,” says Kapoor. He adds that Pristyn Care partners only with hospitals cleared by the National Accreditation Board for Hospitals & Healthcare Providers as well as the Joint Commission International, key assurances of an acceptable quality of hospitals and patient care.

Besides, the company also follows strict operating theatre protocols at its partner hospitals, such as conducting regular hygiene checks and audits before surgeries, to avoid hospital-acquired infections and other issues.

Even the doctors on Pristyn Care’s platform, whether on payroll or working as consultants, are run through a sieve. They have to have performed 8,000-10,000 surgeries and come with strong references, all of which are verified before they are enrolled. This effort is led by Dr. Shaloo Varma, who has close to 20 years of experience, including at Max Super Speciality Hospital in India and Medeor 24x7 Hospital in Abu Dhabi. Varma oversees not only the hiring but also the doctors’ training in patient care and empathy skills.

The road to Pristyn Care’s success was paved with the lessons learnt from other failed enterprises. Singh, who did his masters in engineering management from Duke University in the U.S., founded three startups between 2010 and 2015. All of them failed. None of the failures deterred him. In 2015, Singh joined hyperlocal at-home services provider Urban Company (then UrbanClap) and helped build their beauty services business. A short stint at mobile wallet company MobiKwik followed in 2018, the same year he co-founded Pristyn Care along with his long-time friends.

While Singh and Kapoor are childhood friends, Sawhney joined the gang, so to speak, roughly 16 years ago. The camaraderie and bonhomie the three 35-year-olds share are also crucial ingredients in Pristyn Care’s success. “We were very good friends first, and that helps us in running the venture. We discuss every problem with each other and find a collaborative solution,” says Sawhney.

None of the three come from medico families—Singh’s father runs a small business in Ludhiana, Punjab, Kapoor’s parents were in government service, and Sawhney’s father is in agribusiness. Kapoor and Sawhney credit their understanding of building a patient care-focussed healthcare company to their learning stints at large hospital chains. After completing his MBBS and MS in general surgery, Kapoor worked at Medanta and Max Healthcare over a five-year period. Sawhney, who specialises in cosmetic and aesthetic gynaecology, worked at Max Healthcare and CK Birla Hospital in Gurugram.

Their success so far notwithstanding, the entrepreneurial journey of the friends-turned-co-founders is less than three years old. The question is, will they be able to fulfil their promise of quality and patient care as they grow? It’s a question the co-founders are cognisant of.

“What keeps us up in the night is the thought of how we can maintain this service and quality as we scale. We are not perfect, but the focus is clear: We want to make sure that the patient care is top notch,” says Singh. After all, putting people first in a service business seems a sure path to business success.

(This story originally appeared in Fortune India's June 2021 issue).