QubeHealth is a FinTech health-tech company that is changing the way Indians pay for their healthcare through embedded finance and working to reduce ‘OoPE’.
Indians spend $45 billion every year on Out-of-Pocket Expenditure (OoPE) medical expenses. This is one of the largest healthcare spends in the World. The reason being employer led group insurance policy doesn’t cover many large medical expenses. Medical insurance in general doesn’t cover medical costs like OPD visits, small procedures, emergency hospitalization. The Out-of-Pocket Expenditure (OoPE) continues to rise every year. India will see tremendous growth in this sector over the next decade, riding on the back of massive OoPE on healthcare by Indians.
QubeHealth aims at not just providing access to best medical professionals but also funds for paying for treatments that are outside the insurance policies purview. QubeHealth is addressing this need gap for 300 million employed Indians by providing them on tap funds to address medical expenses which are not covered in insurance plans.
In line with the above, we spoke with Chris George, co-founder & CEO, QubeHealth
How does Embedded Finance work in the Healthcare sector and its growth and challenges :
The word embedded literally means to fix something deeply and strongly. Embedded finance isn’t too different. When talking about embedded finance one can look at it as a financial service translating to fixing or attaching financial offerings to a non-financial offering.
Nearly 75% of Indians are either uninsured or underinsured. Those who have a life insurance generally have one to save taxes and don’t investigate the nuances of what the policy covers. Thus, several Indians land up borrowing from either family of friends to meet their medical needs.
In India the concept of Buy now, pay later has been widely adopted by several sectors such as e-commerce, real estate, technology purchases or to purchase any other electronic devices. However, when it comes up to healthcare it is close to impossible to find too many players offering such plans. Hence it is safe to say that there is a lot of growth opportunity present in the healthcare sector when it comes up to providing embedded finances.
A transaction in the embedded finance sector requires seamless transactions. The platform on which the service is built is what plays a critical role in the experience of the transaction for a patient. Thanks to the Digital India Movement, there are nearly 748 million smart phone users in Indians and 5 million point of sales terminals which makes transactions generally smooth. At times there are also various government policies and regulations which disrupt the offerings that companies can leverage.
Measure in which India can reduce the number of OoPE :
India is amongst the many countries where its citizen don’t prioritize health insurance. A major reason for this is due to the high premium costs associated with private insurance policies. On the other hand, government policies are inefficient or underfunded. According to reports published by NITI Aayog for March 2021, $72 Billion is the amount that Indians paid from their pockets for their healthcare.However, this scenario can be changed with the integration of embed finance into the healthcare sector.This will allow patients to pay for their healthcare expenses in easy installments. Additionally, the government could look at designing more holistic healthcare solutions such as rationalizing medicine prices, fixing standardized pricing for common operations etc.
Impact of OoPE to India :
Indians are accustomed to paying for healthcare expenses from their pockets- borrowing from friends and family or utilizing their savings. What is not so common is the process which needs to be followed while borrowing or channels from where they can borrow. And the irony of it all, is that Indian’s have various plans and mediumsto borrow money to buy electronic goods. However, when it comes up to healthcare expense this sort of a transaction is nearly impossible. The OoPE in India drove 55 million Indians–more than the population of South Korea, Spain, or Kenya–into poverty. The largest contributor to the OoPE expenditure is on medication that Indians occur. Further the number of people spending on healthcare expenses from their pockets has only increased post the pandemicdrastically.
Growth of OoPE in India for the next 5 years :
Unofficial reports estimate that OoPE is expected to cross $100 Billion within the next 5 years, especially as the statistic post the pandemic are still being collated. Insure-tech companies have opened across the country to help combat the issue of OoPEin healthcare sector. Irrespective of several new companies opening, insure-tech companies cover just 30% of the Indian Healthcare Services and for their impact to be felt they still have a far way ahead.The 2021 Economic Surveyhighlighted the importance of increasing public health to 5% from 3%.
Post pandemic reality of payments in the health care sector :
The pandemic has had long and severe effects on each person, be it economically, emotionally, or even socially and these have been discussed in length. The pandemic took many Indians by surprise when it came up to paying for their health expenses. And this was an eye opener for many Indians to have better equipped and robust healthcare facilities. To improve the healthcare infrastructure, the government in 2018 in the Union budget addressed this through the National Health Protection Scheme (NHPS), to provide a cover of INR 5 lakh to over 10 crore families. A detailed guide to this plan is yet awaited from the government. Post the pandemic, due to the swift adaptation of technology and the Digital India Movement we have been witnessing more people keen on opting for digital payments.
