Q&A: Vikram Vuppala, NephroPlus CEO

How an India dialysis chain lowered costs while raising safety.

Vikram Vuppala (pictured here), Founder and CEO of dialysis chain NephroPlus, wants to go from having 117 clinics to 500 clinics operating across India.
Vikram Vuppala, Founder and CEO of dialysis chain NephroPlus, wants to go from having 117 clinics to 500 clinics operating across India. Photo courtesy of Vikram Vuppala

In 2010, Vikram Vuppala founded India-based dialysis-clinic chain NephroPlus, aiming to make quality dialysis care accessible to more of the country’s less-affluent population. NephroPlus is now the largest dialysis-service provider in India, with 117 clinics across 76 cities in 17 states, performing nearly 1 million treatments per year. The company, which posted 2016 revenues of US$13.2 million (INR 848 million), is now looking at international markets.

 

What led you to start up dialysis clinics?

When I was researching the healthcare space in India, I narrowed down my view to the diabetes and hypertension ecosystem. India has more than 70 million people with diabetes and more than 100 million people with hypertension, which are the leading contributors to kidney disease. I researched what services or products I could create or sell in this ecosystem because for the next 20, 30, or even 40 years, there will be a huge demand in India from this target population.

Then, about seven years ago when I was living in Hyderabad, I met Kamal Shah, a dialysis patient who eventually became the co-founder of NephroPlus. He had been receiving dialysis treatment for 13 years, and he helped me understand dialysis-patient issues, wants and needs. We decided we wanted to create a clinical network that didn’t treat patients as commodities.

 

What’s the biggest challenge facing the India dialysis industry?

The biggest is that Indian dialysis patients face a huge financial burden. The majority pay out-of-pocket, unlike patients in the U.S., where most of the burden is borne by Medicare or Medicaid, or by a private insurance plan.

We’re trying to make it affordable to more patients. Dialysis is a low-margin business, and India has the lowest price point in the world. In more developed markets, it costs US$250 to US$300 per treatment. We now do dialysis for US$20 to US$25 per treatment. But that still means Indian patients pay about US$3,000 to US$4,000 a year for their treatments, which is a huge amount for them. Many spend an additional US$2,000 on medications. If a non-affluent person in India needs dialysis, it’s usually a death sentence. Only 12 percent of the people in India who require dialysis receive it. The other 88 percent die without treatment.

 

How do you keep costs down?

First is scale. We are the largest provider of dialysis in the country, and our cost structure is much better than an individual hospital or even a hospital that has several locations. If you look at a typical Indian hospital that does dialysis, they do about 500 treatments per month. But at our network level, we do about 80,000 treatments per month, or about a million per year across the country. So when we are negotiating prices for medical consumables and equipment, our cost will be 30 to 40 percent lower than a single hospital procuring these consumables, machines or maintenance.

We also rely on affordable innovations in technology. For example, the water treatment plants at NephroPlus now use kits that cost US$400 per sensor, which collects data about the flow rate, the hardness of the water and other metrics. By keeping the hardness of the water low, you reduce the risk of damaging dialysis membranes. If the flow rate is low or the hardness of the water is too high, the system immediately alerts our biomedical operations team for maintenance. This way you are not relying on manpower to check the hardness of the water everyday. That sort of technology eliminates the chance for human error, and saves us money on labor costs.

We also provide centralized dietitian services via Skype. We can’t afford a dietitian at every center, so technology allows us to be frugal while still providing patients with the services they need. Then we share our information with all dialysis patients in India via our website and social media. Without that kind of IT, you can’t scale. You can run maybe 20 clinics, but you can’t run 500.

 

What about patient safety?

There is an extremely high rate of cross-infections among Indian dialysis patients. About a third of patients are infected with Hepatitis C, Hepatitis B or HIV within three years of beginning treatment. So they have to deal with an additional disease on top of their dialysis. When Shah and I launched NephroPlus, one of our primary goals was to prevent cross-infections.

The mindset of most India dialysis providers is that cross-infections are going to happen and there’s nothing they can do about it. In fact, this attitude is ingrained in dialysis clinics worldwide. If I hadn’t met Shah, I would probably be running a business like the others. But in fact there are steps you can take to reduce cross-infections.

We identified two primary causes of cross-infections. First, trolleys that carry the consumables required for dialysis are moved from one patient to the next. That raises the risk of contamination, even if a technician uses sterile gloves. So we banned trolleys and replaced them with individual consumable kits that are matched to each patient by photo ID. Second, we determined that the external surface of dialysis machines needs to be thoroughly cleaned after each use. We created a multi-step protocol to clearly outline the steps a technician must take from dialysis initiation to completion.

Once we addressed those two causes, we were able to largely prevent cross-infection among patients. Our clinical cross-infection rate is now almost zero in all our clinics across the country. We’ve made infection prevention our priority. When we come across new instances of cross-infection, we usually trace them back to patients who have gone outside of NephroPlus for treatment, often when they are traveling to a small town that doesn’t have one of our clinics.

We’ve made our knowledge and protocols for avoiding cross-infection available to other clinic operators, and we are eager to share our expertise. We have our own training academy, which we started about six years ago. Now we have five academies across the country. We are the only providers in India certified by the Board of Nephrology Examiners Nursing Technology, or BONENT, in the U.S.

 

How do you deal with the patient-as-commodity problem?

We want patients on dialysis to feel like they can lead a normal life that includes exercise and travel. All our clinic practices support that mission. No one in NephroPlus is supposed to use the word “patient” — all of us say “guest,” including everyone on our clinical staff and support staff. We created eight “holiday” dialysis centers, so that our patients can travel across India without worrying about missing their treatments. We are also organizing an Olympic-style event in Delhi for dialysis patients. We want to change the way the treatment is generally perceived.

 

What are you doing in terms of international expansion?

We plan on expanding into other markets with a partnership strategy. The World Bank’s International Finance Corporation (IFC) has been a shareholder of NephroPlus for the last three years, and has invested US$10 million. We also received money from SeaLink and Bessemer Venture Partners. The IFC connects us with various healthcare ecosystems in other regions. Our goal is to be able to approach hospitals in these regions and say, “We want to be your strategic partner.” South Asia outside of India is where we want to enter first, and we’re in the late stages of negotiations with partners. The Middle East and Africa will be next.

We are only looking at larger countries where we can make significant impact, and which can be translated to significant value to the shareholders of NephroPlus. We will either partner with the local government or a local healthcare provider. Many of these countries don’t have dialysis networks of any scale, so we will consider local hospitals, pharmaceutical companies or distributing companies who have the necessary local expertise. We are not experts in other countries’ reimbursement or distribution systems, so we will need a partner who has an understanding of the healthcare domain.

Even when we enter other countries, we will always hold a majority stake in a joint venture and control the operations. We cannot compromise on our standards of care by giving the majority stake to a local partner.

 

What can we expect from NephroPlus in the next five years?

We’re growing, and we’re on our way to having 500 operational centers across India. We are also about to pilot an AI technology that can detect potential fraud and lower costs. In India, a dialysis center might report two treatments in a day when they have actually performed and collected payment for three treatments, just so the center can pocket the third payment in cash. We want to implement a machine learning tool that will monitor how many treatments a dialysis machine has performed and compare that with billing activity.

 

Ben Rabin

Ben Rabin is an associate editor at GHCi. (Teresa L. Johnson contributed to this article.)

 

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