Cases

Strategic Diligence of a Proposed Business Model with a view to Enter the Hospital Business

Challenge

A large private equity firm was evaluating entry into the healthcare delivery business for one of its Investee Companies. The Investee Company had conducted the series of meetings with the doctors based in Kolkatta, who prepared the business model with them. The private equity firm wanted UC to conduct the strategic due diligence of the proposed business model by the doctors and recommend the financially viable alternatives to entering the healthcare delivery business.

Our Approach

UC conducted this strategic due diligence and then suggested alternatives for entering the healthcare delivery business, based on the following research processes:

  • UC initiated the engagement by conducting a series of meetings with the doctors in Kolkatta to understand the proposed Hub/spoke model.
  • Developed financials for the “as-is” business model and captured key assumptions the financials
  • Conducted in depth interviews with doctors, surgeons, hospital administrators, and medical equipment suppliers etc. to understand the economics of healthcare business. The interviews were conducted in Kolkatta as well as key locations across India.
  • Visited districts in West Bengal to understand and analyse the feasibility of setting up spoke locations (secondary care hospitals) in locations.
  • Profiled key hospitals in Kolkatta as well as across India to understand this business model and financial viability
  • Assessed and analysed key gaps/ issues in the “as-is” business model and on the financial viability of the project
  • Recommended changes in the proposed business model in terms of specially spoke locations, hospitals
  • Conducted another round of discussions with hospitals, industry experts to validate the recommended changes
  • UC developed scenarios on HPV to assess the financial alternatives and prepared and submitted a diligence report to the client.

Impact

UC submitted a deliverable on the viability of the proposed business model made by the doctors and recommend financially viable alternatives to entering the healthcare delivery business. The client received detailed financials from UC.