Healthcare Wallet will Emerge!

 

Healthcare Wallet will Emerge!

India is poised for 10 fold increase in digital payments. Will become 4th largest in the world after Singapore, Sweden and USA. This will have a profound impact on Digital Health. Will become a major driver in adoption of Digital Health across payer and provider systems.

Consider This:

Health Insurance coverage has gone up from 3% of Indias population to over 40% with Ayushman Bharat.

90% of Health Insurance claims is reimbursement of out of pocket out patient expenses related to the inpatients episode.

Insurance is more comfortable reimbursing a Digital expense because it reduces the chances of fraud and abuse. From a Actuarial perspective the risk comes down because of full traceability.

Patients will gravitate toward clinics and hospitals that provide Referrals, Prescriptions, Reports in Standards based electronic format. Because Insurance companies will clear the standard eClaims format faster.

About 8% of out patient gets converted to inpatient procedures for any hospital OPD. Any reduction in out patient foot fall will negatively impact the inpatient load and hence the top line.

A Fintech based rating engine will appear to rate the clinics and hospitals. This rating engine will be far more pervasive than the Practo rating engine because money in the pocket is always a more powerful driver.

A whole new sand box gets created for the digital health startups, software vendors and fintech companies to play. Someone will fill the vacuum. For lack of a better word a Paytm or Jio Wallet for Healthcare expenses and reimbursements is on the anvil.

India will be the next battleground for Global Retail and Healthcare! After USA, India has the largest user base for the Internet Giants like FB and Google. Amazon is in India. Walmart is picking up majority stake in Flipkart. All the Internet and Retail giants have expressed interest in Healthcare.

Can you extrapolate the Dots? I can see the Trend! Fintech fueled transformations are underway.

The real innovation in mobile payments in India began a few months prior to the cash ban. It’s called a unified payment interface, or UPI.

With more than 140 Indian banks sharing the interface, and Alphabet Inc.’s Google and Facebook Inc.’s WhatsApp offering instantaneous payment services on it, UPI has become a keenly watched experiment. By the looks of it, things are going well: From nothing to 800 million monthly transactions in less than three years, India’s UPI has taken off. Growing smartphone use and crashing data costs have helped immensely.

Google and WhatsApp will fight for market share. So will PhonePe, now owned by Walmart Inc. as well as new entrant Amazon Pay, which hasn’t made much of a dent globally into PayPal’s dominance of e-commerce. Indian banks that run their own UPI services. Indian tycoon Mukesh Ambani’s Jio with its 300 million subscribers will push JioMoney. Masayoshi Son and Warren Buffett will keep an eye on their Paytm stakes.

Now RBI has removed charges on RTGS/NEFT transactions; and asked banks to pass on benefits.

Cities Perspective:

Tier 1 cities: Pune, Bengaluru, Chennai are leading the wave in UPI transactions. Pune topped the city list, with the highest average digital spend — per person per month — of ₹16,513. Followed by Chennai at ₹14,208 and Bengaluru at ₹14,000.

Tier II and III Cities: Razorpay says by 2020, 40 per cent of digital payment transactions in the country will be driven by businesses and consumers in Tier-II and -III cities, and 50 per cent of internet users will be using digital payments. Whereas Paytem says - We have been witnessing a tremendous increase in adoption of digital payments in tier II & tier III cities that constitute 50% of our total user base. Surat, Durgapur, Rajkot, Meerut, Imphal, Rohtak, Panipat, Mangalore, Ranchi, Puducherry, Rajamundri, Warangal, Jodhpur, Thrissur, Karnal, Madurai and Jamnagar are among the fastest adopters and are leading the wave of digital payments adoption.

Users of wallets are not updating their KYC (know your customer) details. Instead, they are using UPI (Unified Payment Interface) to make digital payments. Anyhow total payments via digital instruments are expected to be between $400-500 billion in 2020, up from $50 billion in 2017.

Hold your breath guys! Fintech is the digital health roller coasters.