Service for Hospitals

From bread to tomographs – state medical institutions have their own suppliers, but vacant niches remain. How to start a business with the budget sphere?

Medicine and Diagnostics Private Enterprise is five rooms of modern ultrasound diagnostics in four hospitals of Kherson, where 35 highly qualified doctors work. Pavlo Illich Yeliashov, its owner and creator, also supplies a full range of products for patient nutrition, the necessary related products and building materials. To combine such a variety of activities, you need a lively, extraordinary mind and entrepreneurial spirit.

Pavlo Yeliashov started his business in 1993 from trade of various equipment imported from abroad. “Accidentally, our clients included medical institutions that needed telephones. Then the hospitals started ordering medical equipment, updating the base – we brought what they needed,” the businessman recalls. When the state stopped financing the purchase of medical equipment, they switched to the supply of what is needed always and every day – food. It was a state-funded cost item that is still funded, he explains.

Subsequently, the requirements to suppliers began to increase: it was necessary to have special transport that allows transporting products according to all sanitary standards. Not all those who tried to work in the food supply market were able to meet the new requirements. Yeliashov bought one special car, then another, hired a driver, a logistician, and bought a warehouse to store food.

The number of customers was gradually growing: both on the recommendations of customers and on the results of participation in tenders.

Currently, the entrepreneur supplies food to various budget institutions in Kherson: hospitals, vocational schools, orphanages.

A service starts with equipment

When the businessman began to accumulate additional capital, the question arose where to invest it. The answer was simple: to study the demand where they work and already know people. “Talking to the management of the hospital to which I supplied the products, I realized that there is a need in ultrasound diagnostics, because their equipment was out of date for a long time,” Yeliashov said. “We bought the first device, rented premises in a hospital and slowly began to provide medical services.”

“We bought modern equipment and began to provide services for the same money, but of higher quality. The new equipment can analyze deeper, more accurately,” says Yeliashov. “Our second advantage is location. We try to be near the flow of people. Patients come to the doctor, and if he/she prescribes a diagnostics, they prefer not to "run" somewhere, but to be examined at the same place – in the private sector and on a modern device.”

Of course, the purchase of medical equipment required significant funds, which were taken at the bank as loans. But after scaling, profits increased. Six months ago, they bought two ultrasound machines at their own expense.

According to the entrepreneur, in order to provide the population with quality medical services that compete with public medicine, it is necessary to purchase modern equipment and motivate good doctors and professionals to work. Doctors at Medicine and Diagnostics PE work part-time – someone after work, and someone in the second shift. There are managers who manage the centers.

Later, when the private enterprise expanded, a foreign investor was found who helped to buy a computer tomograph. Thus, a diagnostic center has appeared, with facilities in different locations, allowing to provide people with medical services at a high level and in a convenient area for them.

Doctors, not patients, will appreciate the quality 

There’s no secret that there are many private commercial medical centers around each state medical institution, and everyone seeks to attract patients.

Yeliashov does it differently: he explains the difference first of all to doctors, conducts introductory lectures, uses advertising aimed at specialists.

“The conclusion is necessary not to the patient, but to the doctor who treats the patient. Therefore, if the doctor is a professional, he/she will appreciate the quality of the service provided and the equipment on which the diagnostics was performed: what it "sees" and what it does not. Unfortunately, doctors in public hospitals are forced to work on outdated equipment, so they feel the difference in the quality of the examination. Everything is relative,” he says.

The company also cooperates with private medical centers that specialize in consulting services and refer patients for U\S or CT to Medicine and Diagnostics PE.

Yeliashov believes that there will be enough space for everyone: “We are not worried that competitors will open new centers, we are worried about our level of services. After all, the quality of medical care is a combination of modern equipment, service, professionalism of the doctor and respect for the client,” Yeliashov says. There is some difficulty in controlling people, equipment in different places. But doctors, in general, are adequate people, with their mentality, with their culture.

Pros and cons of working with the state

The state is a reliable partner for the entrepreneur, although with its pros and cons. “Working with the state, you first have to deliver products, and only then wait for payment, sometimes more than a month, so be prepared for deferred payments,” Yeliashov shares his experience. An entrepreneur who works with budget funds needs to work closely with banks to cover working capital, and to fulfill large orders – to be ready to open credit facilities.

It is also necessary to be ready to participate in tenders – the threshold amount has dropped to UAH 50,000 this year. In entrepreneur’s opinion, price competition has a bad effect on the quality of services and supplies in general. “It is not very good that budget organizations order the cheapest products. I believe that tenders should prioritize not only price, but also quality,” he says.

New niches

Food products, U/S, tomography – all these are services for one target category of clients. “I like the medical field, we try to provide quality services to the population, and it brings moral satisfaction and joy from doing something useful. We are all in the same boat: in order to make society healthy and prosperous, it is necessary to create good and do a good work,” Yeliashov shares.

Yeliashov does not aim to enter related market sectors, such as the supply of products to educational institutions. “If we can't provide a better service than our competitors, then why? We often look at where we can provide a better product, perhaps, even for the same money”.

The businessman shared his plans to provide laundry services to medical organizations. “Usually hospitals do it on their equipment, outdated, not modern. There is an idea to help our "state employees" to launder better and at a lower cost. To do this, we buy special equipment.”

Cooperation with Raiffeisen Bank Aval

“Business strongly depends on the work of banks, how much they make advances to us in terms of lending, joint participation in business. We have been working with Raiffeisen Bank Aval for about 10 years, servicing the accounts of both an individual entrepreneur and a legal entity. We appreciate the good attitude towards us. We actively use various credit programs: we received and repaid credit facilities for the purchase of medical equipment, we use credit limits on the business card to replenish working capital, which is especially important in our work with deferred payments. I take loans both for an individual entrepreneur and separately for a company, but the bank calculates the credit limit on the total income, which is very convenient.”