Spurring Innovations in the Healthcare Sector

This is a Guest Post by Pawan Gupta, Co-Founder, Curofy.

Healthcare is hard, healthcare is slow. Ask anyone in this industry and they will tell you the same. Healthcare is equally ailing in both developed and developing markets albeit in different ways. An absence of a proven model is further slowing down the progress in the sector. No wonder new age tech innovators who desire exponential growth stay away from the most critical sector for humanity.

Healthcare

In India, the problems are severe. According to a 2012 WHO report, India has 0.7 doctor for every 1000 people. Even worse are the statistics for government healthcare system on which the majority of our population depends. According to National Health Profile 2015, every government allopathic doctor serves a population of 11,000 people. Every government hospital serves 61,000 people with one bed for 1833 people.

Further, we have a chronic shortage of specialists. There is a shortfall of 74.9%of surgeons, 65.1% of obstetricians and gynaecologists, and 79.8 % of paediatricians. Overall, there is a shortfall of 69.7 per cent specialists at the Community Health Centers.

The above statistics are just indicators of the magnitude of problem in front of us. Now combine with it the fact that in India it’s a $100 billion industry pegged to reach $280 billion by 2020, and what we have is an industry ripe and large enough for disruption by technology. I will outline some of the key innovation demanding areas in healthcare from the need side.

The three angles of iron triangle of India’s healthcare as described by Wharton Professor Lawton R. Burns in his book are Cost, Access, and Quality. Any innovation in India should focus on these three angles to be able to solve a large problem for a large market size.

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Starting with cost, we have seen successful examples of Indian hospitals working on innovative business models to drive down cost and earn profits through volumes. There is a great HBS case study on how Indian hospitals have been able to deliver quality health care in budget. It studies the models followed by Narayana Hrudalaya, Aravinda Eye Care and others.

An innovative model that these hospitals follow is a hub-and-spoke model. HCG for example has 17 spokes around major towns which act as patient aggregators, while hubs have specialists with high end equipment—such as an $8 million high-precision, robotic radiosurgery system called the CyberKnife. The model enables HCG to keep the cost low and volumes high.

Any innovation that can lower the cost of treatment for patients is bound to succeed. Take for example the Jaipur Foot. More than 1.2 million Jaipur Feet have been sold till date. Almost all of their customers are people below BPL. They innovated on the material and design to lower the cost to $30-$35. This is an excellent example of using innovation to lower the cost and reach the mass market.

Telemedicine is the other big frontier that will take the effect of hub and spoke to the next level. Connecting the right participants and giving them the right communication tools are the keys. We saw GPs from smaller towns connecting with specialists and super specialists to provide the right treatment to their patients. If a patient needs super specialty treatment, they are referred otherwise provided a treatment in the right direction. The process results in reduced visits, reduced costs, and faster diagnosis for the small town patients. And for the specialist it meant creating a referral network and seeing only patients who need procedural treatments keeping the volume high.

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On the front of access, we just saw how telemedicine can be an effective tool in providing specialist access to patients in small towns and rural areas. With more than 12000 towns in India with 3G and broadband access, telemedicine can potentially bring an exponential change. And don’t forget the entrepreneurs who are trying to use SMS and phone to provide telemedicine. Although personally I feel that’s a step backward and compromises on quality.

Increasing insurance coverage is the next frontier we need to cover in order to improve access. In the recent budget government announced providing Rs. 1,00,000 insurance coverage to every household and Rs. 30,000 extra to senior citizens. Access to insurance goes deeper in providing healthcare access to people who otherwise cannot afford it. With more than 86% of healthcare spend in India being out of pocket, the potential is huge. But there is a need for innovative methods to lower the cost of insurance and provide a greater control to the consumers.

eCommerce in medicines is also a cost effective tool in providing access to right medicines, which is a frequent issue in smaller town and rural areas. It remains to be seen how the regulatory bodies will respond to it in the coming time but here is a practical solution to a real world problem.

Finally, the quality front. Indian private hospitals have been exemplary in keeping their cost low while provide high quality tertiary care. Now the next frontier is to provide quality primary care in the heartland of the country. This is not just a billion-dollar opportunity in itself but opens up the market for tertiary care too. With doctors unwilling to serve in rural India due to lack of infrastructure, RMPs can be empowered by technology tools and remote access to qualified doctors to improve access and quality in villages.

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Industry is also pushing for a greater patient adherence to improve the outcomes. Several startups are working on improving adherence mostly using mobile phones and internet. In fact, the prevalent usage of Glucometer in diabetics and doctors’ affirmation that more vigilant diabetics usually live a very normal life is a perfect evidence.

Summarizing, healthcare is very complicated and can be scary for anyone looking to start out. But if you concentrate on reducing cost, increasing access, and improving quality, there are infinite opportunities to build scalable solutions that will bring real life impact. It helps to know that not too many entrepreneurs are working in this direction leaving the field open for the perseverant.

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Disclaimer: This is a Guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s).

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