AffordPlan has launched a savings product that is customised to the patient’s medical and financial situation and reduces treatment costs by 15-20%.

We have barely scratched the surface of healthcare finance in India AffordPlan CEO to TNM
Atom Interview Thursday, April 19, 2018 - 13:36

AffordPlan is an innovative financial savings platform that is focused on making healthcare accessible and affordable through planned savings for non-emergency medical services. It enables hospitals to provide a tailored solution for patients to plan, save, and pay for their upcoming medical procedures.

The company recently raised $10 million in Series B funding. The round was led by Lok Capital and included, as a new investor, Omidyar Network, alongside existing investors Prime Venture Partners and Kalaari Capital.

The new funds will be used to meet the growing demand for its unique savings-based finance platform and to advance the countrywide adoption of AffordPlan in various hospitals. The company is also planning to launch new savings, lending and insurance products to cover medical & healthcare expenses. It is also expanding rapidly and looking to hire more than 200 employees across India by the end of 2018.

In an interaction with TNM, CEO and co-founder Tejbir Singh elaborated on how this idea came about, the company’s growth in the last one year and future plans among other things.

When was AffordPlan started and how did the idea take shape? 

We started our operation in December 2015. The estimated healthcare spends in India in 2015 were over $100 billion. Healthcare costs are growing aggressively year-on-year and so are the out of pocket expenses (>70%). Millions of Indians in the middle income and lower middle-income groups struggle to pay for even planned procedures and hospitals have to forego revenues. To close this gap, there was a need to develop formal financial services for the healthcare industry. We positioned AffordPlan at the intersection of healthcare and fintech to bring financial innovation to healthcare.

What were the initial challenges in terms of getting the idea off the ground, funding and so on?

It’s always going to be challenging when you bring new products to an industry that has not seen much technology or financial innovation. Initially, it was a challenge to convince patients as well as hospitals. But gradually, as hospitals and patients realised the value that AffordPlan brings to them, adoption has been strong. Hospitals endorsing AffordPlan to patients and the network synergies across hospitals have helped us grow aggressively month-on-month.

When it comes to funding, it will never be an issue for good businesses with resilient cash flows.

AffordPlan's growth in the last one year

We have seen great traction from both, the hospital and the patient side. Our average month-on-month growth is 30% and we are unit positive at the network level. We will be expanding to 2-3 more cities, mix of Tier 1 and Tier 2, in the near term.

Future plans and expansion - new products and new geographies

In the next 12-18 months, we will focus on building a full stack of financial services products for healthcare and deepening its corresponding distribution and supply chain capabilities.

Partnership with hospitals and patient outreach

We have partnered with more than 300 hospitals in the country to make non-emergency procedures affordable and have already reached more than 1,00,000 patients. Our partners include the small and mid-size hospitals as well as corporate institutions such as Strand Life Sciences and Batra Research Institute.

Current state of healthcare finance in India

We believe that we have barely scratched the surface in healthcare finance.

There is a lot to be done in terms of taking healthcare financing to the masses. On the one hand, healthcare costs are rising rapidly and on the other, patients have not planned for the rising medical expenditures. This is evident from two data points - commercial health insurance penetration is around 6% in the country and out-of-pocket spend on private healthcare is about 90%.

With over 300 million people in the middle/lower middle-income group, the high out-of-pocket spends pose liquidity challenges for them. Consequently, 40%-60% patients return from private hospitals without treatment, not because they do not have the income but because they have not planned for the medical expense.

With AffordPlan, we have taken a systematic approach to healthcare financing. We have launched a savings product that is customised to the patient’s medical and financial situation and reduces the cost of treatment by 15%-20%. The product is easily accessible through the network hospitals and through the online channels.

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