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Why HealthTech in India Needs Financial Inclusion Medical emergency funds need to be encouraged in times of rising costs

By Agamoni Ghosh

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The average cost of hospitalization in Urban India is Rs 24,436 according to the National Sample Survey Organisation of India and almost 70% of this is paid out of the pocket, in comparison to just 30-40% in other Asian countries according to WHO. While the overall cost of medical procedures may be low compared to global figures, the average Indian still has to scout for liquid money, or sell assets to pay for these treatments.

To ease the process for patients medical insurance has made quite an impact, but still covers hardly 20% of the nation's population according to the Central Bureau of Health Intelligence. In such times there is a dire need of financial services that cost effectively assist patients in the country.

"The existing financial mechanisms for medical expenses is quite cumbersome with the concept of medical loans being virtually absent, and insurance procedures being a painful process," says Tejbir Singh, co-founder of AffordPlan, a Delhi-based healthtech service that is working to help Indians save for their medical emergencies .

The Average Indian is Ignored

Medical insurance and policies are currently designed for the Urban service and business class who have a monthly disposable income to allocate to such plans. Singh feels the average Indian is not amongst these people who opt for these plans, also because most of these plans only tie up with big hospitals, which are anyways out of a middle income individual's budget.

"Roughly 300 million Indians who earn between 20 to 50k don't have a private health insurance and rely on their neighbourhood clinics and hospitals rather than the big chains. Our goal is to reach them by building a full stack of financial services for enabling the financing of medical procedures," he said.

Saving for Medical Emergencies

Given that people are saving much lesser than they use to a decade or two back, having a pool of fund for emergencies has become crucial. As loans prove to be costly, Singh recommends setting up a piggy bank for medical costs that people can dip into when needed.

"People should be able to create a corpus of funds and then get the procedure done when and where they want. Given that medical insurances have certain limitations like riders and exlusions for procedures related to childbirth, dental , cosmetology etc, this sort of fund comes in handy when incurring heavy medical bills," he said.

The Merging of Healthtech and FinTech

While a lot of HealthTech companies have popped up in the last couple of years, almost none offer an able financial solution to rising medical costs. Also given that the health domain is massive it becomes tough for a patient to asses which hospital or clinic will suit their pocket. While some apps like Practo have tried to provide consumers with a transparent pricing solution, there is still a vast market to tap for medical savings.

"People need to look at the healthtech sector in a more granular fashion than a more umbrella sector," said Singh when asked about how he thought of merging the Fintech aand HealthTech domains." The problem is the data, as most of it is only related to the larger hospitals. The eco system is more about the small and mid sized hospitals, owing to the non-availability of which little progress has been made," he added.

The HealthTech startup which offers customized savings plan to its members said they have already tied up with close to 200 hospitals and clinics in the NCR region and hope to expand that number to 700 units by 2018. Most of these will be standalone as they do not want to rake in the already connected bigger chains.

The company's services were rolled out in October 2016 since which they have seen a month-on-month growth of 30%, most of which is organic. The venture raised its first seed fund in the form of half a million dollars from Kalaari-backed Kstart in early 2016 and topped it up with another $3mn in the later part of 2016 from Prime Venture Partners and Kalaari.

Agamoni Ghosh

Former Staff, Entrepreneur India

She was generating stories out of Bengaluru for Entrepreneur India. She has worked with leading national and international business publications, including Newsweek, Business Standard, and CNBC in the past. 

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