India’s spending on health is the lowest among the BRICS nations. If you come from a low- to middle-income household in India and have a medical need, chances are you will pawn gold or other assets, raid your rainy day savings, and borrow from friends and family to cover your health expenses. Like a large population in India, you won’t have insurance and if you do, you’ll most likely struggle to make claims because the process is usually complex and highly cumbersome.
Indian patients’ spend is significantly high for life-threatening ailments. Faced with such circumstances, low-income consumers either delay or avoid going to the hospital, and when they do pursue treatment, that might mean getting into a debt spiral that is likely to throw them into poverty.
The National Sample Survey Office (NSSO) revealed that eight out of 10 Indians don’t have any sort of health insurance, with a staggering 86 percent of rural households and 82 percent of urban households uninsured. Even for those who are covered, most of the insurance policies are either government funded or employer provided and only 1 percent of hospitalization expenses are covered by insurance companies. Remaining healthcare needs are met through a mixture of savings, borrowings, family contributions, or liquidation of personal assets. Low income customers save informally and often have difficulty understanding formal financial offerings — shying away from adopting formal payments, loans, and insurance. They can usually afford secondary care and elective procedures, but face liquidity management challenges and poor financial planning of low-probability, high-spend events that can derail their finances.
That’s why we invested in AffordPlan, a financial technology platform designed to help low- and middle-income Indian consumers to better manage planned healthcare expenses. The company partners with hospitals across India to reduce the cost of non-emergency procedures and then offers consumers’ savings plans to help them get the care they need without derailing their finances.
AffordPlan resonates with patients because it taps into their natural behavior–the propensity to save–and provides a simple and disciplined way to do so. The company uses field agents — mainly women — to drive sales, leveraging their relationships within their communities. Consumers get discounts on procedures and diagnostics due to the company’s partnerships with healthcare providers, which keeps them disciplined in adhering to their savings goals.
On the provider side, AffordPlan gives hospitals and other healthcare partners the visibility of future cashflow, which helps them to reduce prices and better plan to deliver prescribed treatment when the time comes.
The company has already forged partnerships with more than 300 hospitals around the country, helping over 100,000 patients to get the care they need at more affordable prices — and more importantly, keeping their finances on track.
At Omidyar Network, we believe that the re-bundling of financial services through new technologies coupled with human-centered design, behavioral science, and innovative business models, can level-up people’s relationships with their finances. AffordPlan is doing just that and is well-poised to bring affordable healthcare to India’s next billion consumers.