Let me paint you a picture
The Indian Healthcare sector is about US$ 350 Billion this year, growing at a CAGR of 22%. Of all the hospitals in India, 58% are privately owned, and 81% of doctors in India, serve at these private hospitals. The National Family Health Survey, states that 70% of households in urban India and 63% of rural households depend on private hospitals for their family’s healthcare.
Now you take this picture and combine it with the fact that the penetration of health insurance in India is at a mere 0.4%. Then you add the statistic of medical inflation i.e., a rise in the cost of healthcare every year, which is at 14%. This means that, if the cost of any healthcare procedure today is 3 Lakh Indian Rupees (about US$ 3600), it will cost you 6 Lakh Indian Rupees within the next five years. All this should now give you a canvas of the healthcare industry in India.

Adding technology to healthcare
For over a decade now, we have seen rapid innovation in using technology to solve complex healthcare problems. These have spanned areas that range from patient care to healthcare access to distribution and commerce. We have also seen innovations in the automation of processes within the healthcare enterprise – from hospital information systems (HIS) that manage hospital administration to billings and patient records to lab information systems (LIS) that have helped diagnostic labs and clinics automate a range of functions.

Today, we know of companies like Pharmeasy, 1MG or Practo, that have disrupted the way we buy medicines or search for doctors. Then there are companies liked HealthifyMe or Apollo 24×7 that have taken the patient care experience from hospitals and clinics, into people’s palms – their mobile phones. Yet, we seem to be falling short of creating a measurable impact in reducing the cost or in providing truly meaningful access to healthcare.

Industry ripe of disruption through finance:
The healthcare industry is one of the last great sectors that is ripe for disruption through the advent of capital – more specifically, ‘fin-tech’. Imagine the picture painted above and think about the flow of money between the individuals that are looking for healthcare, the ones providing them the care and the institutions that house those care providers.

Imagine the health insurance industry, that has tried hard for the last 35 years in India to overcome lack of awareness and education around insurance products, and the poor experience of claims settlement that plagues those that are insured. To say that the ‘flow of money’ within the healthcare sector is opaque, would be to put it mildly. Yet, healthcare providers, i.e., hospitals, clinics, pharmacies, doctors etc. are trying hard to ride this industry growth of 22%, while attempting to build predictability into their own cashflows. In many cases, healthcare providers lack insight into how much of their business will come in from patients directly, and when, as compared to what will come in through insurance companies.

The ’patient’ story
No pun intended, but the story of the healthcare patient is one of practicing extreme patience when faced with a healthcare need. We have all stared at the face of a hospital billing counter personnel or an insurance claims department at the healthcare provider to know the limits of our patience. Access to healthcare therefore becomes a function of having choices, and the ability to pay.

Of the two, the ability to pay, is the single biggest factor in choosing not just the healthcare provider, but also when to seek that care. Think back to the various non-emergency, healthcare expenses that you may have postponed, simply because you felt that it is an expense that can be dealt with later.
Having choices too, is often a problem, as it requires that you filter through the marketing and the advice provided by well-meaning family or friends or the doctor -who is often an interested party in guiding you to a particular healthcare provider.
What you need then is a democratic platform that gives you options and the control to choose from those options – think about how you buy airline tickets today.
What you also need is a friction-free experience in paying for healthcare or accessing the finance to make that payment.
The intersection of fin-tech with health-tech
Fin-Tech or financial technology products have used technology to disrupt the way consumers access financial products – essentially core banking services, including quick credit and quick payments.
These innovations have woven themselves into the transaction equation across industries, but mostly in the retail arena. Think about buying that new cellphone on a payment plan or that new dress on a no-cost credit repayment plan. Fin-tech products like ‘buy-now, pay-later’ or ‘sachet-insurance’ (remember those small payment additions to buy a baggage loss insurance cover, when buying an airline ticket?), have lubricated the wheels of commerce in various industries – except healthcare.

Medical finance is not a new concept. Loans that help you pay for medical bills – emergency or non-emergency have been around for quite some time now. But I call it, “desperation financing”. You are likely to sign any paper, if you desperately need to pay for that hospital bill OR if you really need that hair transplant. Such financial products are poor in distribution (they only sell through healthcare providers and merchants) and high on costs (interest rates are usurious).

Easy to borrow, easy to pay
Truly disruptive fin-tech innovation in healthcare would allow you to borrow easily, quickly, and ideally at no-cost. It would also help you pay easily at any healthcare provider of your choice, while rewarding you for doing so.
Imagine having a line of credit, always available, at no cost, and on your phone; to pay for those medicines or vitamins you buy every month, as well as those expensive, dental treatments you always wanted to get for your teenage daughter.
Simply borrow as you need, whether an emergency or not and pay back at your convenience.
Imagine using your phone to scan a QR code and paying at any healthcare provider and earning discounts, connecting your own funds, or your credit line or your health insurance.
Over the next decade, we will see the fin-tech ‘rails’ that powered consumerism dive deeper into the healthcare sector. Andreesen-Horowitz (A16z), the reputed Silicon Valley venture capital firm, states that, “…we’re in the earliest days of a great wave of healthcare fintech innovation.”
Companies that ride this wave will truly power healthcare commerce.