How the healthcare sector becomes efficient with fintech

The health sector has continuously integrated with technology to promote its services.

The fintech sector in particular has tremendously supported the healthcare sector in providing much simpler tools for payment in a time of need. The digital payment method has solved the problem of long waiting times, and thus simplified the payment process for both the hospitals and the patients.

India’s healthcare is growing at a faster pace than expected and has become one of the largest sectors of the Indian economy. According to ET BFSI, Finance Minister Pankaj Chaudhary has also highlighted that the fintech sector is also growing strongly with an expected valuation to reach USD 150 billion by 2025.

Indian healthcare spending was $115 billion this year, of which $72 billion was spent directly out of pocket instead of insurance, indicating the need for the fintech sector and more online payment methods, ET Healthworld said. Here, by making small loan amounts easily available on a digital platform, fintech has built a bridge between healthcare professionals and their customers.

Another research report from Fintech for Health shows that more than 46% of individuals use digital channels for their financial needs. With India set to become the fourth largest market for digital payments in the world after Singapore, Sweden and the US, a major impact on digital health is expected, especially with the launch of the National Digital Health Mission.

Therefore, the health sector has already started to shift and is leaning more towards online methods than traditional methods. It has continuously solved the most common problems that a hospital, as well as a patient, faces in the traditional ways.

Here’s how healthcare is being improved with fintech:

1) Making health services affordable – Healthcare problems are being solved by the growing number of startups that are leveraging the fintech playbook and changing the dynamics between patients, payers and providers.

According to an Inc42 report, access to healthcare has 60%+ Indian population spent Out-Of-Of-Pocket (OOP). This statistic is <20% across major economies such as the US, UK, Japan, South Korea, Germany, Australia and OOP is between 25-35% in Italy, Brazil and China.

65%+ of the population in India is uninsured, which includes public and private schemes. The remaining 35% of the population is covered by public schemes and private medical insurance plans do not cover outpatient and other medical expenses. The gaps in the system have been highlighted due to the Covid-19 pandemic. And the reliance on OOP is likely to persist in the medium term.

Around $10 Mn+ is estimated for the financing of health services, especially for the middle income group which is not covered by the state or the private insurance companies. Of the total $130-140 billion healthcare market, $64 billion+ is the ambulatory market in India. 65-70% of the middle class in India do not have health insurance; most of the remaining 30-35% are underinsured. OOP for Healthcare is at a staggering 62% (3x global average). This implies a $36 billion OOP market. Of these, 78% is the private market, implying a private OOP market of $28 billion. Cutting it further through typical in-hospital hospital bill summary, i.e. typical hospital divided by cash, insurance and plans at 40%, 40% and 20%, implies an addressable health financing market of $11 billion (40% of the private OOP -market of 28 billion USD) ).

A large part of this $11 billion market is addressed through the sale of assets and loans from friends and family, which calls for a sustainable financing solution for healthcare in India. This $11 billion can be solved through lending or crowdfunding, and not all cash patients need financing.

2) Enables access to health insurance for the middle and low income group – Health insurance remains the leading method of health financing in the world. But according to Inc 42, India’s overall insurance penetration, including public programs, remains low at around 30%-35%, and private insurance penetration is even lower at just 8-10%, with a significant underinsurance problem ( 99%+ of claims paid out are < INR 3 lakh, while the average cost of treatment is approximately INR 6–10 lakh).

There are new cutting-edge on-demand and/or subscription-based health insurance options in the market from both the corporate and retail perspectives that aim to break the iron triangle of affordability (due to high premiums), access and awareness that are present in the Indian healthcare system. ecosystem. This is where fintech companies like EarlySalary, Nova Benefits, Unsurity come in to bridge the affordability gap.

3) Achieve greater data accuracy with blockchain – Blockchain technology improves data efficiency in the healthcare sector. The healthcare system can preserve and exchange patient data through hospitals, diagnostic laboratories, pharmacy companies and doctors through this network. It can quickly identify serious errors, avoid the fear of data manipulation in healthcare and support the unique patterns of data storage at the highest level of security. It is useful for medical institutes to gain insight and improve the analysis of medical records. It provides accountability, authentication and interconnection for data access. It avoids specific threats and helps with decentralized protection of data in the healthcare sector.

4) Improve the reach of telemedicine – As lifestyle diseases increase and healthcare costs also increase, however, the traditional healthcare system is facing enormous pressure. Nevertheless, innovative technologies can reduce this burden from hospitals through real-time consultation with doctors through smartphones, tablets and laptops. In India, there is one doctor for every 1,139 people according to reports last year, so the shortage of doctors has limited face-to-face consultations among patients. Telemedicine can reduce and save time on consultations and improve the quality of services in rural areas. In India, the telemedicine market is expected to reach $5.4 billion by 2025 at a CAGR of 31%, says Inc42.

In addition, fintech platforms are linked to telemedicine and offer services and insurance on the same platform. Digital payment companies have a significantly larger reach and customer market than digital health companies and can package telemedicine and e-pharmacy services into their payment platforms.

END OF ARTICLE