Remember the family doctor who found roles in many a Bollywood film? The one, who would rush home with his big physician’s bag for an emergency. He would stand by the bed of the dying old, counsel folk to keep their anger in check to avoid cardiac events; chide children who indulged too much their sweet tooth. He earned the friendship, respect, and trust of families.  An American health management company, Aetna Inc., has pulled that doctor from the screen into the real world.

In December last year, Aetna made its first investment of Rs 100 crore to expand its subscription product in India, which offers primary care, discounts on pharmacy and diagnostic bills and most importantly, medical advice. Six months on, it claims to have 600,000 subscribers, growing at 50,000 each month. That’s unusually speedy given how slow private insurers have been at getting new customers.

It was also unusual when the $63-billion US major acquired the Delhi-based startup Indian Health Organisation (IHO) six years ago. This move had caught entrepreneurs and insurance companies by surprise.

Now, competitors have noticed, as have health tech companies such as 1mg, an e-pharmacy and Practo, a doctor discovery platform. While insurance providers plan products that cover primary, preventive and managed care; health tech companies are enthused to share their networks with them.

The industry body FICCI has estimated that the potential outpatient market is about 20 times the size of inpatient health insurance, constituting 61 million people who spend Rs 10,200 crore on doctor consultation, diagnostics and pharmacy bills annually.

Potential of outpatient insurance

The industry body FICCI estimated that the potential outpatient market is about 20 times the size of inpatient health insurance, constituting 61 million people who spend Rs 10,200 crore on doctor consultation, diagnostics and pharmacy bills annually.

This business is also very risky for insurance. An insurance company may find it easier to empanel large hospitals and reimburse their bills, but how is it to empanel myriad neighbourhood clinics, pharmacies and diagnostic centres? And how does it digitise and verify bills created there?

Financing outpatient primary health is lucrative for insurance providers but fraught with the possibility of fraud, which had made it look unviable so far. But Aetna devised a way, not by offering a traditional insurance product, but a simpler subscription route.

This did not happen overnight

It was a slow-burn. When multinational insurance companies such as Bupa and DKV were tying up with India’s Max and Apollo hospitals, respectively, Aetna entered India by acquiring IHO, a bootstrapped three-year-old business, for an undisclosed amount in 2011.

AUTHOR

Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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