Digital health start-ups in India: The challenge of scale
The National Association of Software and Services Companies (NASSCOM) pegged the Indian Healthcare Information and Communications Technology (ICT) market at a whopping US$ 1 billion in 2014. The industry was expected to grow 1.5 times by 2020, according to the 2015 report. A major portion of the projected growth is expected to be driven by digital health start-ups. Start-ups are bringing novel technologies such as wearable-tech, telemedicine, genomics, and artificial intelligence to the Indian healthcare system. They are driving healthcare providers and patients towards ICT-led delivery and consumption of healthcare services respectively. Digital health start-ups are now an integral part of the Indian healthcare ecosystem. Their tremendous contribution would lie in delivering scale-up of ICT in India. Towards this objective, start-ups will need to develop innovative, sustainable and flexible solutions to ensure equitable spread of technology in India. The Health-tech Start-up Landscape Digital health start-ups in India provide a vast canvas for solutions. The start-up landscape within the Indian healthcare ecosystem goes well beyond a specific disease, therapeutic area, geography, type of product and service or business model. Non-communicable diseases – an opportunity Most Indian health-tech start-ups focus on non-communicable diseases (NCD) not only because of the growing NCD burden in India but also because NCDs offer multiple avenues to leverage technology. First, technology helps create the much-needed structured care continuum for the chronic patient pool. Traditionally, a chronic patient visits a doctor periodically. Indian health-tech start-ups provide chronic patients an interface with the healthcare system throughout the year, beyond those periodic doctor visits. This interface is typically a mobile application which collects personal health data critical to monitor a chosen disease. Take diabetes for example – patients use a glucometer which is linked to a mobile application which stores sugar levels of the patient over time. The aggregation of health data over time makes those visits to physicians more efficient and converts episodic care into continuous care. Organisations such as NanoHealth and BeatO have been successful in ensuring the care continuum for cardiovascular, hypertensive diseases and diabetes. Second, technology enables the collection of non-clinical grade personal health data such as diet, exercise and medication adherence, which are all integral to managing non-communicable diseases. Mobile applications with real-time and data-driven dashboards could empower the patient to self-evaluate the impact of lifestyle changes on the disease. Technology, in this way, could significantly drive the behavioural changes needed for patients to manage non-communicable diseases better. Lastly, technology enhances access to care for patients suffering from non-communicable diseases. For example, technology is making it easier for mental health patients to seek care in an anonymised manner. Mental health cases typically go untreated due to societal taboos associated with them. Technology is also being used to cater to patients with mobility constraints. Start-ups like Healthcare at Home provide home-based healthcare services to patients who might be physically constrained in seeking hospital-based care. Such services enable easier access to care in cases such as terminally-ill cancer patients or patients who need post-acute rehabilitation services. Digital frontiers from administrative to clinical Extant ICT products and services could be broadly classified into clinical and administrative. Most start-ups have conventionally provided administrative solutions such as building IT infrastructure, automating internal processes and digitising health records for healthcare providers. Practo, which initially started off as an online platform to connect patients and physicians, is now providing clinical management systems to automate internal workflows and digitise health records. Firms such as MphRx collect patient health data from disparate sources into a health data repository on their platform. This facilitates inter-operability and leads to seamless exchange of information using web and mobile applications. Other providers, such as CallHealth, provide integrated technology solutions including hospital management systems, and Electronic Health Record (EHR) software. Now, start-ups are increasingly focusing on solving clinical problems as well. They provide services across the clinical care spectrum – wellness and prevention, diagnosis and treatment, and monitoring and management services. HealthifyMe uses wearables to collect personal health data and store it in a mobile-based application. This data is analysed to design and recommend personalised exercising and diet plans as part of a rubric of proactive health and wellness. Start-ups like Qure.ai provides artificial intelligence solutions for efficient diagnostics. Their products are trained on a vast database of radiology images and use deep learning algorithms to detect abnormal X-rays and imaging scans. Other tele-health start-ups leverage technology to diagnose and treat patients remotely via video consultations. Other start-ups such as 99DOTS focus on adherence and monitoring rather than the telehealth focus on treatment. In particular, 99DOTS uses a simple approach to track adherence of tuberculosis (TB) patients cost-effectively. By asking patients to give a ‘missed call’, it simplifies the generation of dosing evidence for patients. Additionally, it improves the efficiency of providers, who can view adherence data and respond to missed doses in real-time. Revenue models – varied approaches Health-tech start-ups are experimenting with different ways to monetise their services and products. First, start-ups face the question of “who pays” for their products and services. While start-ups like Onco.com monetise their services through patients, organisations like Practo and Lybrate charge hospitals and physicians. Wellthy Therapeutics have been able to demonstrate the effectiveness of their digital therapeutics product and get payers to reimburse for their products. Second, “how do they pay” becomes important. Indian health-tech start-ups have been able to leverage a variety of revenue models such as pay-per-service, subscription, and licensing. Companies like BeatO have focused on owning the experience throughout patients’ diabetic journey. This has led the venture to generate monetisation opportunities and evolve as a vertical e-commerce company. BeatO interjects the patient journey through their flagship smart glucometer and then adds incremental value through products like diabetic meals, snacks, and even wearables, making them a convenient one-stop shop for all clinical and non-clinical diabetic needs. NanoHealth and HealthPlix have implemented subscription models with patients and physicians respectively. In contrast, start-ups like Karma Healthcare have taken the licensing route. They out-license their technology and product to local delivery partners such as remote hospitals or non-governmental organisations (NGOs) who provide healthcare services to remote patients. Beyond Tier 1 Cities While the prevalent opinion suggests that digital health start-ups cater to providers and patients only in metro cities, some start-ups are starting to look beyond metros and Tier 1 cities. For example, HealthPlix focuses on making clinical practice convenient by digitising instructions associated with prescriptions for the patients. An encouraging 60% of their subscribers reside in non-metro cities. Beyond non-metro cities, start-ups have started catering to the rural patient base as well. Karma Healthcare call themselves “A start-up for Bharat.” They have proven that rural patients are open to technology-mediated healthcare as long as the product is designed to address their needs. Karma provides telemedicine solutions which connect patients in remote parts of the country to physicians in urban areas. The value proposition of start-ups such as Karma for rural India is to bring formal, high-quality healthcare services to rural patients in a cost-effective manner. Given the geographical complexity of India, technology is the foundation that makes this possible. While most start-ups are focused on the domestic market, start-ups such as Onco.com also provide services to international markets. Their solution for connecting cancer patients to distant specialists requires sharing of standardised reports between patients and oncologists. The standardised representation of oncology cases makes it viable for them to expand to international markets. While patients may be treated in their respective countries, they are willing to pay for expert opinions from oncologists based in other, often more developed, markets. Stakeholders in a Changing Ecosystem The healthcare sector, inherently, is a complex ecosystem with multiple stakeholders and intertwined interests. Unlike other sectors, the buyer of a healthcare product or service, whether a physician or a hospital, could be different from the consumer, i.e., the patient, who in turn could be different from the party that pays for healthcare, which could be an insurance company or the government. In addition, the government plays a critical role in shaping up the sector by ensuring quality, access and affordability of the products and services. Technology-led service models are impacting the stakeholder nexus in three ways. First, start-ups operate on service models designed to replace existing stakeholders completely. Online pharmacies such as 1MG, Myra, and Netmeds play the role of pharmacists. Their emergence threatens the removal of traditional retail pharmacies from the health value chain. This has also impacted the way retail pharmacies do business, with a lot of them investing in online business models. Second, start-ups add new stakeholders to the existing healthcare ecosystem. Start-ups like NanoHealth – which ensure continuity of care for chronic patients – have brought in ‘health coaches’, allied health professionals acting as intermediaries to fill the gap between patient and doctor. Similarly, Karma Healthcare has in-house nursing staff to help patients interact with remote providers through video conferencing. Using allied health professionals not only alleviates capacity constraints but also expands inclusion by providing care to patients who are not tech-savvy and would have otherwise not been reached. Third, start-ups are being pushed to design their solutions by keeping in mind various stakeholders in the health ecosystem, including but not limited to patients. Many start-ups are designing their value proposition by focusing on stakeholders other than their primary buyers. For example, Onco.com focuses on the patient as well as care-givers whose role is as important in oncology care. Onco’s case managers are not only clinically trained to manage the oncology patient but are also empathy-trained to interact with the care-givers. Moreover, an increasing number of start-ups are looking to collaborate with stakeholders other than patients to drive uptake. For instance, Wellthy Therapeutics has worked with providers to generate prescriptions, with patients to promote usage and with payers to drive reimbursement of digital therapeutic services. Karma Healthcare has collaborated with non-profits, NGOs and local health providers to expand their telemedicine network. Therefore, start-ups will increasingly need to align incentives between multiple stakeholders in the fast-evolving healthcare ecosystem. The Road to Scale-up Digital health start-ups have gained initial traction with customers and investors. As more investment enters the health start-up ecosystem, there will be a stronger push towards scaling up digital efforts. Start-ups will need to continuously improvise to get right the how of scaling up. A few pointers on the ways start-ups could scale-up. Low-cost solutions for higher coverage Scaling-up efforts would require start-ups to consolidate demand from patients and providers who are not yet exposed to technology. Since the needs of these stakeholders would differ from those who have embraced technology, the ICT solutions to cater to them would need to be customised. For example, unlike hospital chains which adopt large-scale solutions for organisational-level digital transformation, single-doctor physicians would need low-cost modular ICT solutions. Start-ups need to focus on innovating towards ‘minimum viable’ solutions at amenable price points. A possible idea could be to experiment with a mixed delivery model – using offline and online together – rather than relying only on online delivery models. Start-ups could take inspiration from the Indian government, which is using mixed delivery models for public health. Given the constraints on the ability of patients in remote India to use technology for healthcare, the government has rolled out projects to empower Anganwadi and ASHA workers digitally. For example, public health workers use the Auxiliary Nurse Midwives Online or ANMOL application to register pregnant women, encourage institutional birthing and monitor immunisation programmes for new-borns. Using intermediaries could result in higher and more efficient coverage. Start-ups could similarly infuse offline human intervention with technology-driven solutions to develop feasible ICT solutions and consolidate demand. Developing a clinical core Start-ups will require a multidisciplinary approach, especially with a deeper clinical focus. The approach to solution design should entail identification of the clinical problem before conceptualising the technology-enabled solution. One way to do this is to develop a professionally diverse team with a mix of medical professionals and product engineers. For example, developing a digital solution for diabetic patients would require a team of endocrinologists, nutritionists, dieticians and product managers to develop the right intervention into the patient pathway. The medical and the product team will need to work together to inform the technological solution with the needed clinical competency. In addition, the onus is on the start-up to demonstrate the cost-effectiveness of its solutions to stakeholders in order to drive uptake. Start-ups will need to convince payers to reimburse such technology-led solutions by proving that the cost-effectiveness of the digital solution will translate into long-term commercial benefit for the payers. Having closer integration of clinical expertise into leadership teams will help throughout the product lifecycle – from identification of the right problem to the creation of a data-driven payer environment – and hence, will be instrumental in scaling up ICT within healthcare. In the long run, clinical capabilities will also serve as a basis for differentiation. Efficient customer acquisition One of the deterrents to scaling up of ICT in the Indian healthcare context is high customer acquisition costs. Acquiring customers in the healthcare business is difficult because building trust with the customer is a painstaking task. Add to that the transient nature of the population, especially urban patients on which most start-ups focus. To an extent, digital health start-ups have leveraged technology to demonstrate the impact on patient outcomes. This has helped them gain trust and build credibility, but acquisition costs continue to remain high. Start-ups should collaborate with corporates, insurance firms and governments to lower their acquisition costs. Firms like Wellthy and NanoHealth focus on tying up with corporates and insurers to reach their intended audience. While corporates give them a large population base to identify and target high-risk employees, insurance companies help them serve the right patient base by integrating their solutions into insurance policies as value-added services. In addition to firms, start-ups have the option to collaborate with the central and state governments as potential customers of digital technology. While working with the government could be challenging, it could lead to a large-scale uptake of technology. The Indian government, the most prominent buyer in the Indian healthcare market, has been engaging in multiple digital health initiatives to bolster public health. Among many others, these initiatives include Kilkari, a mobile application focused on awareness of maternal, prenatal, and postnatal health issues and E-raktkosh, an online portal to standardise and streamline blood bank operations across India. These interventions have set an encouraging precedent for start-ups to collaborate with governments. For start-ups, winning work with the government could serve as an excellent value demonstration. It could lead to increased traction within the private sector as well. The Digital Future of Healthcare Digital health-tech start-ups have shown early signs of success. The start-ups have been successfully experimenting with a variety of business models and have catered to multiple stakeholders within the health ecosystem. These enterprises now have the responsibility to scale-up solutions and demonstrate the wider applicability of ICT solutions in the healthcare ecosystem. A steady scale-up of tech-driven healthcare delivery is critical for a more efficient healthcare system with better outcomes for patients.