By Chris George
Healthcare costs in India have been on an upward trajectory for decades. According to the National Health Profile 2023, medical inflation in the country outpaced overall inflation, reaching nearly 14 per cent in the past year. This rise poses significant challenges for families, especially those in the middle and lower income brackets, who often face financial hardships when dealing with unexpected medical expenses. However, innovative healthcare payment solutions are emerging to help families manage these costs more effectively.
The Drivers of Medical Inflation in India
Several factors contribute to the rising cost of healthcare in India:
- Technological Advancements: Cutting-edge medical technologies and advanced treatments, while lifesaving, come at a premium. For instance, robotic surgeries and molecular diagnostics have increased the overall cost of medical care.
- Growing Burden of Non-Communicable Diseases (NCDs): Lifestyle diseases such as diabetes, hypertension, and cardiovascular issues are on the rise, requiring long-term care and expensive medication.
- Hospital Infrastructure: Many private hospitals invest heavily in infrastructure to meet global standards, which increases treatment costs.
- Pharmaceutical Prices: Despite government interventions like price caps on essential drugs, the cost of patented medicines and specialised treatments remains high.
- Medical Tourism: While India’s reputation as a medical tourism hub boosts revenue, it also drives up local costs as hospitals prioritise international patients willing to pay higher fees.
The Financial Strain on Indian Families
The consequences of medical inflation are stark. A study by the Public Health Foundation of India (PHFI) revealed that out-of-pocket healthcare expenditure constitutes over 60 per cent of total healthcare spending in the country. For many families, this often leads to:
- Debt Accumulation: Medical emergencies frequently result in borrowing or liquidation of assets.
- Healthcare Avoidance: High costs deter many from seeking timely medical care, exacerbating health issues.
- Economic Instability: Households spend disproportionately on healthcare, impacting their ability to invest in education, housing, or savings.
Innovative Healthcare Payment Solutions
Recognising the financial challenges posed by medical inflation, and the inherent ‘friction’ in healthcare payments, various healthcare payment solutions are being developed to bridge the gap. Here’s how they’re making a difference:
- Health Insurance Expansion:
The Indian government’s initiatives, such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), aim to provide health coverage to economically disadvantaged families. Private insurers are also stepping up, offering tailored health insurance plans for individuals and families. Innovations include:
- Top-up Plans: Allowing families to extend coverage beyond their base insurance.
- Critical Illness Policies: Offering lump-sum payouts for severe conditions like cancer or heart disease.
- Cashless Hospitalisation: Minimising out-of-pocket expenses during treatment.
- Digital Platforms for Healthcare Payments & Medical Loans:
Healthcare-focused financial products, such as healthcare-focused payment apps, with embedded medical loans that can be paid back in Equated Monthly Installments (EMIs), are rapidly gaining interest from Users. These options provide immediate liquidity, enabling families to access quality care without exhausting their savings. Many hospitals collaborate with financial institutions, as well as these providers, to offer interest-free EMI options for expensive treatments.
The rise of fintech in India has led to the emergence of platforms like QubeHealth-Pay or other financing Companies:
- Offer quick and easy financing for medical treatments.
- Enable pre-approved credit for surgeries and hospitalisations.
- Provide a transparent repayment structure with minimal paperwork.
- Employer-Sponsored Healthcare Benefits:
Companies that care for employee healthcare and the potential burden their family’s healthcare expenses may put on their well-being are increasingly offering comprehensive healthcare packages that go beyond just company-paid health insurance, as part of employee benefits. These often include:
- Group health insurance, plus healthcare payment support Apps.
- Quick access to medical loans and/or discounts on every medical bill.
- Specialised OPD-Benefit packages.
- Preventive healthcare check-ups.
Such initiatives reduce the financial burden on employees while promoting early diagnosis and treatment.
- Crowdfunding Platforms:
Websites like Ketto, ImpactGuru, and Milaap are helping families raise funds for expensive medical treatments. These platforms leverage social networks to gather small contributions from a large number of donors, providing a lifeline to those in need.
- Subscription-Based Healthcare:
Healthcare providers are introducing subscription models that allow families to pay a fixed monthly fee for a range of services, such as:
- Unlimited doctor consultations.
- Discounted diagnostic tests and medicines.
- Priority access to specialists.
The Road Ahead
While these payment solutions provide significant relief, addressing medical inflation requires a multi-faceted approach. Policymakers must prioritise:
- Price Regulation: Expanding the list of price-capped drugs and treatments.
- Public Healthcare Investment: Strengthening government hospitals to reduce dependence on expensive private care.
- Awareness Campaigns: Educating families about available healthcare financing options.
Additionally, collaborations between the government, private sector, and non-profits can accelerate the development of innovative payment models and healthcare delivery mechanisms.
Medical inflation is a daunting challenge for Indian families, but the rise of innovative healthcare payment solutions offers a beacon of hope. From insurance expansion and digital financing platforms to crowdfunding and employer benefits, these tools are transforming the way healthcare is accessed and paid for. As these solutions continue to evolve, they promise to alleviate the financial strain on families, ensuring that quality healthcare remains a right rather than a privilege.
(The author is the Co-Founder & CEO of QubeHealth)
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