How can patient financing can improve healthcare access in India?
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Dheeraj Batra
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Given that only about 15 per cent of the Indian population is covered by health insurance, the vast majority of people have to pay for healthcare out-of-pocket. We all realise that only a small percentage of this 85 per cent can afford to do so easily from their savings. Of the remaining, the lucky ones are able to lean on family, but most of these people end up selling personal assets like their jewellery or their residence, borrow at criminally high rates of interest (often exceeding five per cent a month) from money lenders or simply go without care. In fact, the problem is so bad that unplanned healthcare expenses are the number one cause of poverty in India.
With Arogya, the patient starts paying after the care has been administered and that too for a definite period of time which it takes to repay the loan.
How different or similar is patient financing from health insurance?
It’s very different from health insurance. With health insurance, the potential patient pays a premium indefinitely and is benefitted only if he/she needs care. In addition, using health insurance in India is anything but straightforward.
Do you think that patient financing is a better option than insurance?
Both options have their own strengths. From a macro perspective, insurance is great. If everyone pays for coverage and gets it, then the burden on any one person during a time of need is not that great.
From an individual perspective and that too for someone who is in the lower-income segment and doesn’t have access to a lot of excess funds, a loan may be more suitable. A person is likely to think that instead of paying a monthly premium for something he or she may never need, the person is better off spending that money on food or on children’s education or clothing.
What are the advantages and disadvantages of patient financing in the Indian context?
Advantage is that the patient gets access to funds when the person needs it and is thus able to avoid selling personal assets or taking a loan from unscrupulous moneylenders.
How does Arogya Finance help a patient to access healthcare? Who is your target group?
Arogya Finance helps patients to access care by lending money to them. Arogya’s goal is to provide a safety net for these people. Arogya’s loans can help people get back to work quicker, retain their assets and avoid the downward spiral that pushes them into poverty.
Through its proprietary approach, Arogya is able to lend to those who don’t have the funds to pay for their healthcare expenses and those who are outside the formal system and lack things like collateral or formal proof of income. From an income perspective, Arogya is targeting the lower and lower-middle income groups who are covered neither by government schemes nor by corporate insurance plans.
How does the model work in India?
Arogya has partnered with multiple hospitals throughout the country. When one of the partner hospitals encounters a patient who is unable to pay for his/ her medical expenses, the patient is referred to Arogya Finance.
At that point, an Arogya Finance Counsellor meets with the patient’s family and puts the borrower through our process. Within 24-48 hours the patient’s family is given an answer on eligibility and the quantum of loan approved, but in emergency cases Arogya Finance can make and communicate a decision in as little as four hours
Our approach doesn’t require any collateral or formal proof of income. We have designed an approach from the ground up keeping the constraints of the borrowers in mind.
Tell us about your reach in India?
Arogya is active in a limited way in nine states. We have a tie-up with 50 hospitals. But going forward in 2014 and early 2015, Arogya will focus primarily on two geographies – Mumbai and Kolkata – before expanding its focus on include other states and metros.
Who are the other players in the patient financing space?
According to me, no one in India is financing the segment of the population we are targeting.
What developments do you foresee in this new year for the patient financing space in India?
We are hopeful that healthcare financing will qualify for priority sector loans.