APN News

Elevating Healthcare Affordability in India

            Chris George. Co-Founder & CEO, QubeHealth, a Healthcare Payments Company

In the landscape of Indian healthcare, the trajectory has been transformative since the inception of Sir Ganga Ram Hospital in Delhi in 1954, marking the beginning of private healthcare in post-independence India. The sector has witnessed exponential growth, with the private hospital market in emerging markets, predominantly driven by India, projected to reach a staggering US$ 240 Billion. This sector constitutes approximately 70% of India’s US$ 81 Billion healthcare industry, with a 27% compound annual growth rate (CAGR) during 2019–2020.

Despite these advancements, India faces a significant challenge in healthcare accessibility, evidenced by the low bed penetration rate of 1.3 beds per 1000 people, considerably lower than the global median of 2.5. This scarcity is more pronounced given that the global median includes some of the world’s poorest countries.

Financially, the situation is precarious for many Indian citizens. A significant portion of the population lacks health insurance, often resorting to extreme measures such as selling assets, including livestock, to afford healthcare. This phenomenon has been documented in various reports, highlighting the distressing reality of healthcare financing in India.

The surge in private healthcare facilities has not alleviated these concerns. In fact, healthcare expenses have escalated, with Indians spending $45 billion in 2015–2016 on medical expenses, a figure that rose to $72 Billion by 2020, as per a NITI Aayog Report from March 2021. The concept of saving in India, traditionally associated with securing one’s old age, has increasingly become synonymous with accumulating funds for future medical expenses.

Health insurance, often viewed as a tax-saving instrument, falls short in providing adequate coverage. Many Indians find themselves underinsured, with healthcare costs far exceeding their insurance coverage limits.

A significant portion of healthcare expenditure in India comprises non-emergency procedures such as medications, health checks, dental and eye care, wellness, and cosmetic procedures. These expenses account for a substantial part of out-of-pocket healthcare spending.

In the Indian healthcare ecosystem, individuals often navigate their healthcare journey solo, facing challenges with healthcare providers and insurance companies focused on minimizing claims. This leads to a high-friction customer experience. The government’s efforts in public healthcare are yet to bridge the gap, resulting in continued dependence on private healthcare facilities and escalating costs.

To combat these rising costs, several steps are recommended:

            Optimal Health Insurance Coverage: It is imperative to secure the highest possible health insurance coverage for oneself and family members as early as possible, ideally starting in one’s twenties. Ensuring comprehensive and individualized coverage for each family member is crucial.

            Access to Medical Finance: Products offering ‘on-tap’ medical finance are essential, not only for emergencies but also for elective procedures that are often expensive and not covered by health insurance.

            Dedicated Savings for Healthcare: Establishing a dedicated savings account specifically for future healthcare expenses is advisable. Regular contributions to this fund can provide a financial cushion for unexpected medical costs.

In summary, navigating the rising healthcare costs in India requires a multifaceted approach, involving early and comprehensive insurance coverage, access to medical finance, and dedicated savings for healthcare. These strategies, coupled with disciplined financial planning, can mitigate the impact of healthcare expenses on individuals and families.

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