Giving birth isn’t easy, especially in India. Despite major strides in the last few decades, more women die during childbirth there than in any other country in the world. Part of the problem is a health care system that reflects the country’s economic inequality. Poor women can’t afford private hospitals, while public hospitals remain spotty and underfunded.
Ananth Kumar saw this firsthand when he worked for India’s largest condom manufacturer, counseling new mothers on contraceptive use. He translated complaints about care into a business plan for LifeSpring, which in 2005 he pitched to his bosses at Hindustan Latex Limited: a chain of low-cost clinics set up specifically to provide maternity services for the poor.
The basic idea was that by renting buildings, employing fewer doctors, and focusing on the specialized area of maternity care, you could keep overhead low enough to provide an option for poor families that might otherwise not get care. The idea got legs when it attracted the funding of the Acumen Fund, a nonprofit venture fund that invests philanthropic funds in anti-poverty businesses.
“At the end of March 2013, we have helped women deliver over 21,000 healthy babies,” LifeSpring’s head of process control, Vijaybhasker Srinivas, told me.
Still, it hasn’t lived up to its own ambitions. In 2009, they were publicly planning to open 30 hospitals and franchise another 140 in the next three years. Since 2011, they have remained a chain of 12 hospitals.
Asked about their current plans for expansion, Srinivas responded that they were undertaking market research to identify the next city. But he also described three barriers to growth, which seem like they may pose a persistent problem. One is the challenge of finding investors happy with a meager return. Another is finding suitable buildings to rent that are close enough to poor neighborhoods to attract patients.
The third barrier, though, has a silver lining. “After the nurses gain experience in hospital like LifeSpring, they are offered a much higher pay by profit maximizing hospital chains,” Srinivas says. It’s a win for the nurses–but it makes it hard to retain experienced employees.