Tejbir Singh, CEO and Co-founder, Affordplan, a fintech start-up in the healthcare domain, shares the company’s vision of making healthcare accessible and affordable through planned savings for non-emergency medical services
Working for a start up like TaxiForSure, how and what made you venture in healthcare fin-tech start-up?
TaxiForSure was one of the more controlled entrepreneurial stints which I had. Working in this start up helped me to see and learn the complete business cycle of a start up end to end. Post TaxiForSure, I was looking to venture in a very large market and reach out to the masses. Healthcare is one such sector which spends more than 30 times the size of the cap market. It is one of the sectors which has not embraced technology innovation the way the consumer section had.
My partner Hemal Bhatt and I found that a lot of fin-tech interest and start-ups existed but not many in the healthcare sector or medical lending. Though there are loans for the housing sector, consumer durables , a dedicated medical loan was missing. We found that it’s a large market and were sure that we can definitely make an impact on the financial side of the healthcare vertical.
For example, medical loans are growing robustly in the west. The US has $30 billion category in medical lending. India having a sizeable population of lower and middle income group, have less spend on the medical front. Health insurance penetration is low in the country as the commercial health insurance covers up to five to six per cent and if you add the government insurance, it goes up to 15 to 16 per cent. These factors made us venture to healthcare and fin- tech company.
How does Affordplan work and how different it is from the usual healthcare insurance space? What is your revenue model?
When you look at the middle and lower middle income group, with a salary bracket of Rs 2.5 lakh to 8.5 lakh of household income, there are about 300 million people in our country, who tussle with the out-of-pocket healthcare expenses. For example, if a person earns Rs 50,000 a month and has to undergo a cataract surgery, which costs him one month salary, he either postpones the surgery, takes money for high loans or go to a substandard place. Affordplan provides a tailored solution where they can plan, save and pay for their upcoming medical procedures. The savings-led solution caters to the non-emergency procedures which can be planned for in advance such as pregnancy, eye care, dental, plastic surgeries, orthopaedic, bariatric and more.
Affordplan kiosks, desk or office is set up inside the partnered hospitals with financial counsellors. The patient who walks into a hospital for a elective procedure, meets the financial counsellor and he/ she gets to know about the adaptive financial plans that help them to save and pay their treatment expenses in advance through flexible and convenient payment options. We have consumers to decide on how much to save on a daily, weekly, bi-weekly, or monthly basis according to their chosen plan and then make regular payments at their convenience. We prepare a customised plan for each individual seeing the financial and health situation,and they are given a web app. Payments can be done online, by depositing money at the hospital during their visits, or collected directly from their home. Apart from this, consumers also receive discounts on medical bills and diagnostic services, which can bring the overall treatment costs down by as much as 15-20 per cent.
For example if a person saves money for caesarean procedure and end up going in for normal delivery then the difference of amount is settled. Hence, the whole process is the exact reverse of a medical loan where you get the procedure done and then keep paying the EMI. In this case, you are paying EMIs saving up for the procedure and then get the procedure done. As far as our RoI is concerned, it is from the hospitals we are tied up with where we get the transaction fee for the technology and the collecting services.
Which are the target hospitals and how many hospitals you are partnered with?
In the first phase of the business, we targetted small and mid-sized hospitals, which has 15 to 75 beds. We have tied up with over a 120 hospitals in Delhi and the NCR alone. We are trying to expand in tier-I and tier-II cities. Discussions are on with corporate hospitals as well. Few of the big names we are associated with are Batra hospitals, Strand Life sciences, Eye care in Noida and Sharp Sight centre. Apart from hospitals, we also partner with 100 pharmacies who are retailers and standalone entities.
We are a healthcare technology platform where you can save for your medical expenses and get benefits in return. Patients can come for diverse needs like maternity, cataract, chemotherapy, bariatric procedure, dental implant and IVF. The elective procedures is where the savings-led products is more applicable and we don’t constrain the hospitals with limited verticals. There are a number of products in the pipeline, be it open ended or pre-payment, high risk insurance and medical lending products.
How innovative and different is Affordplan from other health insurance schemes?
Most of the health insurance schemes today do not cover many major elective ailments like IVF, dental, wellness, bariatric etc. Maternity, eye care and ortho are covered with a lot of procedures attached to it. Many times, despite having insurance, things need to be planned well in advance to get the expenses. Affordplan itself is an innovative model in the healthcare finance segment. For this, we had to develop an intelligence on various areas like the ailment, patients and hospitals. We have three-pronged approach where we collect the information like – did the patient contribute on time or not, was his/ her installment delayed, did he/ she change his/ her plan value or cancel it. So, we are developing a database of the middle and the lower income group and will harness this intelligence for other financial products that would be useful in the healthcare vertical.
Brief us about the Affordplan app.
We have an Affordplan web app, which is an end-to-end solution for the patient. They get login and password with which they can access and see the plan progress, cancel or add value of the plan. They can order medicines, schedule a test or OPD visit, or ask queries asked to the doctors. We do not charge for this.
How potential is this health fin-tech market?
The intent for us is to extend the financial discipline and planning to any elective procedure that a person could think of. The majority of the business for small and mid sized hospitals comes from the elective ailments and the insurance penetration in these hospitals are not high, many of them who visit this facilities come and pay in cash. It is a published statistic that 87 per cent of all medical spends are out-of-pocket, which means the middle income and lower income group can be put to debt or driven to poverty. So, we want to build a robust system where we can help these income groups to plan for the health, not just elective procedures but even for medicines, which are expensive in certain cases.
What worries you the most and what encourages you the most as a start-up?
Affordplan fin-tech is at the intersection of healthcare, finance and technology. Healthcare business needs high quality of execution and many of us come from the core operations experience in TaxiforSure, which is very helpful. We have been fortunate enough to partner with two very high quality investors one is the deepest fin-tech portfolio in the country which helps us to connect with banks, financial institutions. The other is the Kaalari Capital which brings in great networks and operational experience. I think the situation for the start-up depends on the eco-system that they are able to create around themselves, be it with investors, partners or employers. We have been fortunate enough with good investment partners and adoption of hospitals is fairly robust as it is 120 in ten months. Healthcare is not e-commerce business we are cognizant about that.