Race to care : Emerging Trends in the Indian Emergency Medical Services (EMS) sector

On January 3, a leading quick commerce platform caught the market off guard by launching a “10-minute” ambulance service in select areas of Gurgaon. While the quick commerce sector has seen massive investments and meteoric growth, this unexpected launch stood out as it appears to be a “non-commercial” venture. So, why should this grab anyone’s attention? Is it merely a CSR initiative?

The answer is a resounding NO. Healthcare startups are increasingly stepping in to bridge critical gaps in emergency medical services (EMS). Over the past few quarters, we’ve come across several such startups and investment pitches. This prompted us to delve deeper into the sector and assess its potential. This blog is our attempt to provide a high-level overview. Naturally, we’re not sharing all the insights we uncovered!

The Market Opportunity Emergency medical services in India are valued at $1.6 billion (?13,850 crore) as of 2024, growing at 4.75% annually. While this figure might seem negligible compared to India’s $638 billion (?55 lakh crore) healthcare industry, EMS has been gaining traction due to its parallels with the transportation sector (think Uber, Ola, etc.).

According to the National Informatics Centre (NIC), there are over 1.9 lakh vehicles registered as ambulances in India. Of these, approximately 30,000 are under the National Health Mission (NHM), while the rest operate in the private sector.

The World Health Organization (WHO) recommends one advanced life support (ALS) ambulance for every 5 lakh people and one basic life support (BLS) ambulance for every 1 lakh people. Clearly, there is a significant gap in coverage, quality, accessibility, and response times. This isn’t just a game of averages—it’s a matter of life and death.

Examining the On-Ground Model: EMRI (Emergency Management & Research Institute)

Healthcare, and by extension emergency medical response, is primarily a state subject in India. Policy-making, implementation, and administration lie with state governments, while the central government plays a regulatory and facilitatory role.

However, the lack of standardization in quality of care, staffing, licensing, equipment, and other critical areas across states has led to fragmentation. Standard operating procedures (SOPs), where they exist, are usually limited to specific cases like highway safety (under the National Highways Authority of India) or disaster response teams.

This fragmentation paved the way for initiatives like the Emergency Management & Research Institute (EMRI). Most Indians are familiar with emergency response numbers like 108, 104, and 102, but these services didn’t exist before 2005. EMRI was established in 2005 as a non-profit, public-private partnership (PPP) model aimed at providing emergency medical response services.

A Social Enterprise Model EMRI’s PPP structure has been instrumental in addressing some of the gaps in India’s EMS landscape. By leveraging government resources and private expertise, the initiative has brought critical services to millions, but much work remains to ensure consistency and scalability across the country.

Any emergency care model consists of

• Call Triage (Toll free assistance)
• Dispatch (Ambulance to the incident spot)
• Stabilization (Immediate assistance)
• Medical Care (Hospitalization)

EMRI model has been adopted in more than 17 states across India. The coverage across various districts is highly skewed due to varying population density, Vast geography (states like MP, UP) and urbanization.

This skew unfortunately leads to an over supply of ambulance operators in fewer regions and limited supply in underserved areas. This is also exacerbated by the dense clustering of premier hospital and medical facilities in the urban areas.

Although EMRI is a great initiative, the challenges of a public private partnership and structural challenges also continue to persist.

PPP: Formula for success or a hanging sword?

• The Government (State & Central) contribute up to 90% of an EMRI project cost
• The Central Government provides 54% for CAPEX (Cost of ambulance, Equipment etc.)
• The State Government provides 36% for OPEX (Fuel, Infrastructure, Maintenance etc.)
• Private players provide a balance of 10% for Staff, Training, Software etc.
• Government funded initiatives historically have faced issues i.e. delay in payments, penalties and disputes over quality of services and bureaucratic overheads affecting the smooth execution of critical care.
• The role of para medical and medical staff is vital in saving a life in an emergency. However, time and again the staff unions have protested for unfair and untimely payment of wages.

This begs the question; how can a social enterprise model compete with the expectations of a population that is fast getting accustomed to quick deliveries ?

ENTER : DIGITAL APPS

EMRI PPP model has been pioneered by the likes of GVK-EMRI, Ziqitza, Apollo etc, however the last decade has witnessed the rise of medical Saas based startups like Red.Health (formerly Stanplus), Medulance, Dial4242, Ambipalm & Hanumancare, more recently Blinkit.

They all adopt a “Uber for Ambulances” approach to serve the digitally adapted & native users. Although it is an immediate use case for the users, these companies have also identified the adjacencies of other stakeholders in the value chain.

·?????? The Hospitals (Clinical Establishment Act proposes a mandatory facility, including ambulances in a hospital).

·?????? Availability and Skilling of EMT (Emergency Medical Technician) personnel.

·?????? Blood Bank Services

·?????? Rehabilitation Services

·?????? Enterprise, Industrial and Social Event requirements

·?????? National Highway Operators etc.

·?????? Social Awareness, Medical Certifications & Academic Trainings.

This broader view of the EMS value chain opens a bouquet of opportunities and innovations for smart and agile entrepreneurs.

·?????? Telemedicine using 5G & LTE

·?????? AI based predictive modelling

·?????? IOT & Fleet utilization

·?????? Subscription bases ambulance & concierge services

·?????? Air, Rail, EV Ambulances, Drones etc

FINDING SUCCESS: Solving for monetization

Innovations by themselves don’t guarantee success in a free marketplace. The demanding nature of the average Indian consumer is a bitter pill tasted by all businesses (successful or not). This demands a strong product-market fit and understanding of the customer, probably more than any other market in the world.

Although investors have poured large sums of money to influence consumer behaviour in the Indian consumer markets, they have realized that gaining trust and loyalty and living up to the promise is easier said than done.

Hence, any go-to-market approach competing with the likes of social enterprise programs which promise a free service (The real meaning of free is debatable in this case) is embarking on a cut-throat journey.

What then?

The issues faced by each stakeholder need to be understood a bit more to perhaps fashion out a successful business model.

·?????? End-User: Discovery, Affordability (99% of ambulance costs are not covered in insurance plans), Trust, Reliability and Repeatability. The end user who is so accustomed to the existing model (108, 104) has a split second to decide which service provider to call for. To achieve this level of trust and judgement requires an impeccable record and marketing campaign to find a place in the mind of an anxious customer.

·?????? Asset Owner: The skewed capacity of ambulance operators in urban and rural areas brings its own challenges of forecasting, fleet utilization (BLS are more utilized and profitable than ALS ambulances), cost of operation, unit economics etc which needs to be looked at closely. The recent emergence of fleet aggregators (Dial4242, Ambipalm) signifies the intensity of the struggle of smaller ambulance operators.

·?????? Hospitals: Trauma care is one of the most expensive cost centers in a hospital due to its capital (ER, ICU, Equipment) and resource intensive nature. This is further challenged due to low predictability and recovery rates in emergency care. The average expense of an emergency care is 2-3 times more expensive than an internal or general medical case.

·?????? Technical & System Integration: Healthcare is one of the most sensitive and regulated industry due to the PHI (Personal Health Information), Indian regulations are aligning with global standards i.e. HIPPA, GDPR etc. Any startup or software developer needs to be prepared to adhere to multiple standards such as ABDM (Ayushman Bharat Digital Mission, IT Act 2000, NDHB (National Digital Health Board), Clinical Establishment Act guidelines, ISO 13485 to name a few. This enunciates a holistic approach of digitization (Interoperability, Data security, Patient centric approach) across the EMS value chain by the Apps, Asset and Fleet owners, Hospitals, Regulators etc.

TAILWINDS OF GROWTH IN THE HEALTHCARE AND EMS SECTOR:

??????? Health Trends: Rise in cardiac cases, pulmonary medical cases, post pandemic changes in health indicators and profile is still undiscovered

??????? RTA (accidents): Increase in 2/3/4 wheelers on roads and highways, poor infrastructure, poor safety & regulatory landscape.

??????? Coverage:? Overall low coverage, Ambulatory coverage is still dense in urban areas and sparse in rural areas. The majority of the ambulances merely operate as transport vehicles without basic medical equipment.

??????? Labor: Shortage of trained EMT staff, low wages.

??????? Technology: High tech medical services are only limited to urban cities; digitalization of medical services is relatively new in India and progressively improving since the last decade.

??????? Market Segmentation: PPP & Govt services currently can only cover 50% of the population, 50% of the population’s needs are unaddressed.

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CONCLUSION:

The Rising Interest in EMS: A Growing Opportunity for Investors

The emergency medical services (EMS) sector is heating up, attracting the attention of private investors, including venture capitalists, private equity funds, and strategic players. In 2024 alone, startups in this space raised nearly $24 million, signalling a growing interest in the industry.

Could this mark the beginning of a larger wave of private investment in India’s healthcare sector? With India already known as the diabetes and cancer capital of the world, the scope for innovation and disruption in healthcare is immense.

However, several key questions remain:

• Can emerging startups in the EMS space validate their business models and demonstrate a clear path to profitability and scale?
• Is there room for players to carve out a niche in this competitive sector?
• More importantly, is the end customer ready to pay out-of-pocket for services offered via a mobile SaaS app during critical moments?
• Finally, will government policies evolve to facilitate or challenge the growth of private EMS companies?

The answers to these questions will unfold with time as the sector matures and adapts to market demands.

For more insights and updates, stay tuned!

Rohith Ananth

Senior Analyst, July Ventures