LifeSpring’s maternity hospital outside of Hyderbad, India, is full of surprises. While the building is simple, and the maternal services they offer are low cost, the facility is immaculate and the quality of care is world-class. Expectant mothers dot the waiting room, along with their mothers or mothers-in-law, who do most of the talking. New babies gurgle, smile, cry and sleep. The energy in the halls is palpable.

I first visited LifeSpring on Mother’s Day, where, as part of a free vaccination offering, the hospital sat new mothers and their families for photographs. Later that week, I visited with LifeSpring manager Anant Kumar and Acumen Fund Fellow Tricia Morente.

LifeSpring addresses a powerful and daunting problem. Fewer than half of Indian women are cared for by a skilled attendant during childbirth, and the chances, over a lifetime, of an Indian woman dying due to complications in pregnancy and childbirth are 1 in 70.

Mr. Ayyapan, the Chairman and Managing Director of Hindustan Latex Limited – a large Indian public sector company – and his team created LifeSpring to address this problem. Acumen Fund then joined in as a 50/50 joint venture partner to help take the concept to scale.

Lifespring’s maternity care hospitals offer a low-cost alternative to public clinics, which are free but often low quality. At LifeSpring, expectant mothers pay 1500 rupees (about US$35) to deliver a baby. This price point seems to make sense, and Mr. Kumar told us that the mothers typically decide based on quality of service, and the fathers based on price. The opinion that prevails will often depend on the education level of the mother.

Already, LifeSpring’s occupancy ratio has surpassed its targets, with more than 1500 customers coming in per month, and there are plans to build 5 more small, 30-bed hospitals before the end of this year.

At Acumen Fund, we talk a lot about looking for “breakthrough innovations.” What does this mean? The iPhone is a breakthrough innovation – fancy, high-tech, and paradigm-breaking. But what about a small, simple maternity hospital on the outskirts of Hyderabad?

Innovations – regardless of sector or target market – begin with an insight. In LifeSpring’s case, the insight was that the free care offered by India’s public hospitals was not good enough. Ayyapan and Anant’s innovation was to create a hospital with world-class care (LifeSpring is ISO 9001 certified) at a price that poor people can afford. Since the economics are working well, the innovation is poised to scale: one hospital today, 5 planned by the end of this year, and hopefully 50 or more in the years to come.

But the surprises run deeper than this first insight. For instance, Tricia Morente (an Acumen Fund Fellow spending this year working with LifeSpring) had explained to me that LifeSpring calls expectant mothers “customers” and not “patients.” In Tricia’s words, this is because “pregnancy is not an illness.” I smiled the first time I heard this, thinking back to the medicalized pregnancies that have become the norm in the United States (I’m the parent of two children, ages 1 and 4).

I realize now that I didn’t fully understand the power of treating “customers” until I spoke to Anant Kumar. “The first time doctors come into our hospital,” Anant said, “we train them on talking about ‘customers,’ and they maybe get it right 1 out of 10 times. After some time with us, the number jumps up to 6 out of 10 times, and we want it to keep improving. It really means a lot for a doctor, who is educated and from at least a middle-class background, to treat poor people with this kind of respect.”

Respect. We talk every day at Acumen Fund about how treating poor people as customers forces an organization to treat them with respect and dignity, and to listen to their needs. To be reminded of this lesson by the head of one of the enterprises we invest in was humbling. Kumar said that he sometimes thinks it would make more sense to recruit nurses from the hospitality industry (hotels and the like), because it may be easier to teach nursing skills than it is to teach good service! And while he was saying this, I couldn’t help thinking of the hospitals I’ve been to in the United States, and how scarce a commodity dignity is once you put on a hospital gown.

Putting dignity at the center of high-quality, low-cost maternal care in a 30-bed hospital outside of Hyderabad? Now that’s a breakthrough innovation.

By Sarah Arnquist

India successfully test launched a ballistic missile last week that could strike Beijing on a moment’s notice. Yet, 120,000 women here die annually giving birth.

How does a country with the technology to produce nuclear weapons and launch ballistic missiles also have  the highest maternal mortality rate in the world? It’s 10 times higher than China’s.

LifeSpring Hospitals Ltd. aims to make a dent in India’s abysmal maternal and infant mortality rates by providing high quality care at affordable rates to lower middle-class women. The chain of maternity and children’s hospitals officially launched last year and has the ambitious goal of operating more than 30 hospitals in three years.

(I’m volunteering at LifeSpring’s corporate office in Hyderabad for two months before heading to grad school.)

LifeSpring charges about $40 for a normal delivery and a two-night stay in its general ward. A private room costs $120. LifeSpring promises its families, who earn about $2 to $4 a day, they won’t be inundated with unexpected costs. The prices are posted on the waiting room wall.

LifeSpring isn’t a charity. This is a for-profit business that believes making money is the only way to guarantee a sustainable future.

Anant Kumar, the company’s founding CEO, told me he wanted to run a company with a social mission, but didn’t want to be constrained by unreliable charitable donations or inflexible grant funding. Too many good projects start and then die, he said, when a grant isn’t renewed. Or directors become so focused on meeting grant conditions that they forget the project’s mission and needs of the population.

LifeSpring is an interesting company for many reasons, starting with its initial financing. Hindustan Latex, LLC, a government business that makes condoms, and Acumen Fund,a nonprofit venture philanthropy firm, provided start-up funding.

Like Google and Ebay, New York-based Acumen takes a different approach to philanthropy. The fund invests in for-profit social enterprises around the world.

From Acumen’s Web site: “We believe that pioneering entrepreneurs will ultimately find the solutions to poverty. The entrepreneurs Acumen Fund supports are focused on offering critical services – water, health, housing, and energy – at affordable prices to people earning less than four dollars a day. … The key is patient capital.”

Read more about Acumen here.

Increasing rates of childbirths in hospitals is a key strategy to lowering India’s maternal and infant mortality rates. India provides free health care at its government hospitals, but they are dreadfully overburdened, outdated and inconvenient for many people.

This is the niche LifeSpring aims to fill. The small hospitals are a hybrid between an outpatient clinic and small inpatient unit with 20 to 25 beds. To keep costs down, the hospitals outsource pharmacy and other services, refer out complicated cases, and offer few frills. But the hospitals are committed to meeting strict international quality guidelines.

The hospital’s quality policy states: “We at LifeSpring Hospitals: Realize that our customers have expectations from us; Believe in exceeding those expectations; and Doing it better every day.”

When I told Kumar about the 46 million Americans who lack health insurance and struggle to afford the rising costs of health care, he jokingly said he sensed market potential.

Found out Wednesday that my Grandad had been diagnosed with cancer. Being separated from family during these times is definitely something I considered before coming over here, but it doesn’t lesson the feeling of just wanting a hug from my dad. Between abbreviated phone calls with family at home it has been a rough few days.

My first recourse is to start pounding away on the excel models, maybe microfinance can buy me a bit of karma. Then Thursday I got to trek across town for a different type of coping.  LifeSpring maternity hospitals run perhaps one of the most innovative and inspiring socail enterprises I have seen; top quality, no frills, extremely affordable  health care ($35/ delivery, inclusive of all consultations and medicines) done at the only level feasible in India- massive scale.

LifeSpring succeeds in offering a valuable service to those at the bottom of the pyramid by being led by a passionate, energetic entrepreneur; a rockstar core management team and a blushingly proud hospital staff “we wouldn’t work anywhere else.”

Being at the hospital and seeing the new parents, seeing their optimism- they are going to raise their children in an India where literally anything is possible. Absolute emotional high.

And this is one of the reasons it is so exhilarating working at Spandana- getting to partner with organizations like LifeSpring. We are placed at the nexus- a huge customer base that we touch every week; to the extent we are able channel meaningful products like maternity health to them- we can go far beyond credit in the impact we make. It helps you remember what can get lost in the maze of conference calls, models and business planning. At the end of this chain, we may have just given that little boy or girl a better chance to succeed.

Start timing us, lets see how fast we can scale this.

Tyler Bolender (Spandana)
Saturday, February 09, 2008 4:29 PM

The staff and doctors at the LifeSpring hospital told me that they have to do exactly three things:
1. Realize that their customers* have expectations
2. Exceed those expectations
3. Do better at it every day

That’s as good a marketing plan as I’ve heard in a while.

(notice that they didn’t say ‘patients’)

By Seth Godin

Hind Latex plans first PSU hospital chain

December 4th, 2007