Collateral Medical: Offering World Class Medical Equipments at Never Before Transparent Prices
Date: Tuesday , March 15, 2016
A lot can happen over a cup of coffee. Whether it is friendship, relationship, friends\' reunion or sowing the seed of starting a dream project, a cup of coffee has witnessed everything. And the case was no different with Nikhilesh Tiwari and Dr. Ashutosh Raghuvanshi (Group CEO & Vice Chairman, Narayana Hrudayalaya). While working with Johnson & Johnson\'s Cardiac Surgery Portfolio, Nikhilesh met Dr. Ashutosh who was a practicing Cardiac surgeon then, and became good friends. Later Nikhilesh moved on to head the Women\'s Health business of Johnson & Johnson that primarily used to service small hospitals, nursing homes and maternity centers, and realized that it was a Herculean task to reach to these centers. It was a meeting with Dr. Ashutosh over a cup of coffee in Kolkata where the idea of Collateral Medical (Colmed) got crystallized to supply reputed medical devices and consumables to doctors in the cities that are untouched yet by the gargantuan medical device distribution system. They were later joined by Sanjay Jha (Director, Colmed).
The Humble Odyssey
Medical devices are crafted with utmost care and supreme technologies, the foremost reason for these devices to be costly. On the other hand, the turmoil lances further as the fresh equipments pass on from the manufacturers to numerous unorganized distributors, taking the cost out of the reach of private doctors and healthcare clinics in tier 2 and 3 cities. This multi-tier distribution system along with supplier-driven market and lack of information creates very significant pricing challenges for buyers. While India is still a developing country that has emerged as one of the most preferred countries for medical tourism, the agony is the price that works as a hindrance for many hospitals, clinics and private doctors (especially small that are in tier 2 & 3 cities) that forces them to drag their decade old medical equipments to use even if it has given up. While the only source of cheap medical equipments is the unregulated import of Chinese products by local traders, the products come with a \'No Guarantee\' and \'No Service\' tag, making it quite a bitter experience for the buyers.
In India, the medical device market is over $5.5 billion of which 30-40 percent comes from small nursing homes spread nationwide. The demand is growing at around 17 percent per annum. The number of beds added to tier 2 and 3 cities is very high, probably 20 percent per annum. Also, with various specialty clinics and hospitals coming up, the demand will soar without doubt. Nikhilesh realized that there was no easy way to supply medical device across India efficiently. And when he tried to go direct to some of the key customers, it was very beneficial for them. Dr. Ashutosh felt that even large hospitals after signing agreement with medical device manufacturers had to struggle for supplies to their hospitals in various geographies. He found a clear need for a Pan India distributor that can efficiently and seamlessly supply across the country. Sanjay learnt about efficiency brought in by Group Purchase Organizations and large US wide distributors during his long tenure with GE Healthcare US. This coinciding thought process brought them together to create Colmed. Today, the company has completely obliterated the demon that is eating up the healthy ecosystem in India.
Medical professionals and hospital purchase managers can avail benefit from Colmed\'s platform Colmed.in, which serves through direct mail, industry-specialized support staff, field sales representatives and use of Internet and mobile technologies. Colmed.in is highly used by small hospitals and clinics. The platform is witnessing cent percent year-on-year growth with over 40 percent repeat customers who have become the advocates of the company.
The Growth Trajectory
Surfacing initial challenges of enrolling local medical device companies due to perceived conflict with their existing channels and transparency of the new platform, Colmed found a friend in 3M Healthcare who became its first partner to supply medical devices on a transparent platform to make it more feasible for the medical fraternity. Today Colmed has successfully created a transparent and efficient platform for sourcing medical devices from companies like Johnson & Johnson, Boston Scientific, GE, Philips, Bard, Nipro and others, and has become their all India distribution partner, thus putting steel into the spine.
\"We directly partner with these companies and sell directly to the end customers minus mediators, thus bringing the price to the lowest in the market,\" proclaims Nikhilesh, Director, Colmed. The \'No Negotiation on the Wall\' helps Colmed bring complete transparency in pricing to the end customers, who can compare a wide range of products on the website (over 10,000, and adding thousands new each month), select the most fitted and pay via multiple payment options including credit card, EMI, COD or bank transfer, all of them with just a few clicks.
Today Colmed has emerged as a doyen and complete solution provider when it comes to products for hospitals and doctors. The company believes that there is no competition in the market for this platform. When asked why, Sanjay responded, \"For customers, it is the variety of products and for suppliers it is the reach to every local corners of India that attracts them to our platform. Add transparency to that, and we do not see anyone standing near to us\".
Using Technology to Serve Well
From Stethoscope & Diagnostic to Medical Equipment to Surgical Supplies to Chronic Care to Furniture & Lights to First Aid & Safety to Dental, you name it and you get them all on Colmed\'s platform. \"We aspire to be one-stop solution and purchase manager for small clinics or hospitals for anything they want to buy,\" expresses Nikhilesh. Extending its services beyond providing equipments, Colmed also plans to offer technology services that will take away the entire purchasing burden from doctors and enable them to focus on their core competency of serving patients.
The fervent company not only supplies medical devices at the best price, but helps customers pocket more savings. Being a data driven company, Colmed is able to help small nursing homes and hospital partners to better manage their inventories. Based on their past inventory data, it plans to automate their purchasing thus reducing the purchasing cost and at the same time, ensures higher availability of products. \"If we can aggregate demand from lots of hospitals together, then we can command a very good cost from the suppliers, which we will be able to pass on to our customers. There is significant pricing difference between prices offered to hospital chains like Apollo and prices offered to small Nursing home, we are working towards bridging the gap,\" explains Sanjay.
The company also plans to increase its disease and specialty focus. Colmed is also in the process of setting up a service and support team for tier 2 & 3 cities to help its customers use medical technologies reliably, and in the process, eventually become their full procurement partners. \"We are the only company using technology to supply medical devices, which leads to over 25 percent cost and time saving for our clients,\" states Nikhilesh.
On the product side, the company has worked with global manufacturers to bring technologies that suites India. Alongside, the platform is able to quickly bring new devices online. \"We can bring around 15,000-20,000 devices online instantaneously,\" proclaims Nikhilesh. While earlier, the medical device manufacturers took time to bring their product here and launch it in the market via conferences and others, educating medical professionals about the benefits and functionalities were the real challenge for them. Even the technology dissemination used to take more than 3-5 years to reach tier 2&3 cities. But with Colmed.in, the company quickly transfers technology knowledge and benefits through videos, features, and others.
While other companies still follow the old school way to supply their goods, Colmed takes the innovative route, i.e., internal partnership with big delivery companies like FedEx. With no plans going dissipate, Colmed is in the process of setting up a service and sales team in tier 2 &3 cities with the sole purpose of educating doctors about the availability of the products, ensuring that they are up and running.
The odyssey of Colmed has been daunting, slow, yet fruitful to the extent that it is growing 100 percent year-on-year and has already benefitted over 15,000 customers. Last quarter Colmed serviced orders from all of 28 states in India and from over 280 districts in India. In the last one year, the company has grown from eight people to 31 and plans to triple its account in the next one year, mostly from internal references. Thanks to its culture of collaboration, every employee at Colmed gets a chance to step into the shoes of others to experience new things. While Colmed provides an array of trainings, the most important one is to ensure none of its customers go unhappy, even if it requires going that extra mile to elate them.
The company is adding lot of sales and servicing engineers, and is building its technology platform further. With investments to enable rapid delivery to the customers, educate customers and make them aware of Colmed in small towns and centers, the company plans to have physical presence in most of the towns (which have five lakh and above population), to be able to provide support at a faster manner, while emerging as the partner of choice for all the doctors working in private sector in these cities. Being currently funded by promoters and through debt financing, Colmed has received active interests from various VCs and is currently on a lookout to raise equity within next 2-6 months.
An alarming number of medical devices are dumped or sold at an inflated price to the developing nations by the first-world countries and trading companies, most of which are poorly-calibrated, old machines being refurbished and either sold or donated to healthcare organizations. As much as 40 percent of healthcare equipment in poor and developing countries is out of service, reported The Lancent in their global health technology report. That\'s a colossal number! And Colmed is all geared up to tap into these under-served markets globally in the coming days.
Being a market leader, the company is putting immense emphasis on innovation of technology to bring customers and device manufacturers closer to each other. The company is working towards redefining delivery of products and services to ensure that end user gets reliable performance of products over its life time, and bringing innovative products from manufacturer around the globe to end users in India. And most importantly, encourage its team of Biomedical Engineers to identify unmet needs of its customers and work with manufacturers to develop and get market appropriate and innovative products to India.
Colmed recently hired VP of supply chain from a leading hospital chain to have better understanding of customers and implement strategies around purchasing. Colmed\'s R&D team is developing few in-house products trying to further decrease the cost and price for customers very significantly. In the next one year, Colmed will be able to offer a technology platform to customers directly over and above what it has to enable them to manage their inventory in a much more efficient manner.
Nikhilesh Tiwari, Director
Coming with over a decade of medical device industry experience, Nikhilesh (IIT Delhi Post Graduate and MBA from London Business School) has previously worked with various medical device and healthcare companies like Johnson & Johnson and others in the U.S., UK and Germany.
Sanjay Jha, Director
Over a decade of medical device and IT experience, Sanjay (IIT Kharagpur Graduate and MBA from INSEAD) has previously worked with companies like Johnson & Johnson India and GE Healthcare, US.
Dr. Ashutosh Raghuvanshi, Advisor
The co-founder of Collateral Medical, Dr. Ashutosh is also the Vice Chairman & Group CEO of Narayan Hrudayalaya. He is credited with starting various hospitals across the world.
Office: Mumbai (Headquarter)
Clients: Nursing homes and clinics across the country, NGOs UNDP programs, and various corporates that require delivery across India