Startups in healthcare: Challenges and Alternatives
I’ve been on this trade for greater than 12 years and as an entrepreneur, constructed two startups. I’ve been intently working with docs, sufferers and insurance coverage corporations. Coming from this house, I see plenty of alternatives in healthcare right this moment.
Healthcare primarily consists of three areas- payers, suppliers and sufferers. At this time whenever you have a look at sufferers there’s plenty of innovation that’s occurring. It might be because of the push being given to the ecosystem by Covid and plenty of demand generated by the innovation within the ecosystem itself. Over time, startups have developed attempting to attach sufferers with suppliers underneath their ecosystems. All these startups are extra targeted on affected person expertise.
The second house is Suppliers. How will we embody docs on this technological evolution? What are the instruments required by docs? That’s why a sure variety of startups have began creating plenty of modern instruments, connecting docs and sufferers via expertise.
The third piece which is essential within the healthcare ecosystem, is the Payers. The payers will be insurance coverage and even authorities. At this time all of us perceive that nearly 70% of the overall healthcare supply comes from major healthcare, also referred to as OPD – Out Affected person Division. Despite that, there’s hardly any OPD bills lined by insurance coverage.
Why is it so? In right this moment’s time there are a set of challenges which make it nearly unimaginable for any payer to incorporate OPD as a part of healthcare protection. Due to this, we see 70% of the cash paid together with the insurance coverage lined well being insurance policies are out of the affected person’s personal pockets. It’s this expenditure that’s driving the nation’s healthcare financial system. Yearly someplace round 5.5 crores of the inhabitants fall beneath the poverty line simply due to this self-paid OPD expense. So that may be a house that requires expertise adoption and plenty of innovation.
OPD protection by insurers
At this time whenever you have a look at any healthcare insurance policies, principally, all of them cowl hospitalization bills. You may also have heard of pre-hospitalization and post-hospitalization OPD, however what number of occasions have you ever heard of overlaying OPD as a stand-alone with out the requirement of hospitalization? Can we go to a hospital, seek the advice of a physician and stroll out with OPD protection? In right this moment’s time, the share lined as standalone may be very restricted. Despite the truth that 70% of the overall healthcare supply comes from the OPD, the quantity of OPD lined by insurance coverage right this moment is closely restricted.
That is due to two major challenges- 1. Insurance coverage right this moment solely has a community of hospitals. They don’t have a community of cashless OPD and since there isn’t any community in place, as an insured, we exit of the community, pay out of our pocket after which apply for reimbursement.
Second, after we speak about reimbursements, we perceive that it’s a time taking course of for each the affected person and the payer. As a payer it is extremely costly as properly. Final fiscal yr, nearly 30 million well being claims have been processed by payers at a price of virtually $20 every. That’s the associated fee to course of every declare utilizing the prevailing infrastructure. This occurs as a result of the prevailing infrastructure is essentially constructed to course of hospitalization claims. So that’s the place we want technological adoption. To summarize, right this moment OPD shouldn’t be being lined comprehensively by any of the insurers on account of two challenges. One, on account of lack of entry to the OPD community and two, lack of expertise to course of cashless claims in actual time.
OPD protection by insurers: Challenges
Once you have a look at overlaying OPD from the insurers angle, we discover this stuff. One, what’s the price to cowl OPD right this moment? Can I exploit my present infrastructure to course of OPD? Which isn’t potential as a result of for those who have a look at OPD as a standalone declare it may be as small as Rs. 100 and the common price to course of every declare right this moment is $20. So, unit economics fails to course of OPD as a standalone declare for any insurer within the nation. Two, abuse within the system. The second anybody tries overlaying OPD as an insurer, the subsequent factor that you must handle is, find out how to management the utilization? Can somebody abuse the system? So once more, there must be a expertise that provides you the controls via which you’ll handle and function the OPD effectively. So, these are the basic challenges.
Pay disrupting the unorganized OPD
We began MedPay in the course of the pandemic again in April 2020. I met my co-founder and CTO, Arun Bhatia throughout our accelerator program run by Entrepreneur First. Entrepreneur First recognized the issue we try to unravel and the affect it may have in a rustic like India and so they inspired us for the reason that first day together with funding. OPD is unorganized and closely fragmented within the nation. They don’t have a correct communication channel even internally. As a consequence of this, they by no means considered any insurance coverage networks and this once more is linked to reimbursements. So, what MedPay is attempting to do is, disrupt this house by constructing a big linked care community of major healthcare facilities in Pan-India utilizing expertise.
At this time, now we have entry to 50,000 healthcare facilities all linked digitally. We will use APIs to entry any of those networks. Not simply the entry however we additionally present the flexibility to course of cashless claims throughout the community in actual time. These are the 2 worth propositions which might be required by any insurer within the nation to function and handle OPD successfully. We work intently with insurers and varied different companions to supply our community as a service by providing a big hyperlocal community and processing cashless claims in actual time. At MedPay we’re enabling these standalone OPDs like clinics, pharmacies and diagnostic facilities to be part of cashless networks and by integrating with MedPay they turn out to be accessible to insurance coverage networks. So even a small vendor, in right this moment’s occasions, is ready to entry insurance coverage cost utilizing MedPay.