LifeSpring Hospitals

by: Aneel Karnani

Publication Date: March 28, 2011
Length: 14 pages
Product ID#: 1-429-038

Core Disciplines: Base of the Pyramid, International Business, Strategy & Management

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This case study details LifeSpring Hospitals, a maternity hospital chain for low-income women in India that is an investee of Acumen Fund. Though LifeSpring’s target customer earns between $2 to $5 per day, the hospital is a business, with the belief that a for-profit model is more efficient, sustainable, and scalable than a charity or non-profit entity that is eternally reliant on subsidies and donations. However, CEO Anant Kumar faces a critical decision in an effort to keep the hospital chain financially self-sustainable: should he continue its cross-subsidization model, in which private ward customers pay higher rates than general ward customers, or should he keep only a general ward, focusing operations solely on low-income women?