Insights into India’s healthcare ecosystem: Who is the payer?

By April 29, 2020 HealthTech, India

Given the scale of India’s large and growing population, HealthTech startups play a crucial role in providing affordable and high-impact solutions to improve healthcare and critical care.

With Healthcare as a focus sector in our Next Step India program, Sajid Khetani who leads Design Thinking and Client Engagement at India’s leading Business Innovation & Strategy Consultant, Turian Labs, shares his local insights into India’s health insurance system. Read on to learn how Ayushman Bharat, an initiative by the Indian government is democratizing access to healthcare.


The Indian healthcare system has evolved significantly over the years, with the eradication of polio, reduction of infant mortality rate, and improvement in the overall delivery of medical services. Over the years, the private sector has led improvements in the diagnostic, preventive and wellness space, along with strengthening the specialized care delivery. This has improved the availability of healthcare across the spectrum of care and delivery, at least in an urban context. Unfortunately, the rural areas or the Tier 3 towns still face a lack of readily accessible healthcare services, which are primarily driven by the public sectors.

Who is the payer?

While it is a fact that India has one of the lowest costs of healthcare services in the world, good quality healthcare is still out of reach for the majority of the population. In India, 65% of the expenditure is out of pocket (an individual has to pay for the majority of the medical bills). Less than 50% of the population have some form of health insurance. A majority of the insured population are covered under government-sponsored schemes and such schemes have significant coverage limitations. Insurance companies are constantly trying to design innovative products that offer optimal pricing and coverage. 

Role of stand-alone health insurance providers

Stand-alone health insurance providers have been gaining traction over the years. As specialists in the health insurance domain, they are able to innovate products while keeping in mind the healthcare needs of different strata of the population. They are also creating micro-insurance solutions which fulfil customer needs which were previously considered difficult to meet.

Image Source: National Health Portal (NHP), by the Ministry of Health and Family Welfare (MoHFW), Government of India

Ayushman Bharat – democratizing access to healthcare

Ayushman Bharat is an initiative by the Indian Government which aims to provide free health coverage at the secondary and tertiary level to India’s poor and vulnerable population. It delivers a comprehensive range of services and has two components which are complementary to each other: 

  • Under its first component, 150,000 Health & Wellness Centres (HWCs) will be created to deliver Comprehensive Primary Health Care that is universal and free to users, with a focus on wellness and the delivery of an expanded range of services closer to the community. 
  • The second component is the Pradhan Mantri Jan Arogya Yojana (PM-JAY) which provides health insurance cover of Rs. 500,000 per year to over 10 crores (100m) poor and vulnerable families seeking secondary and tertiary care.

(Source: National Health Authority, India)

This can be a potential game-changer for the overall healthcare ecosystem in India and provide enough impetus to other ecosystem players to create an impact. 

About Turian Labs (Partner of Next Step India program) 

Turian Labs is India’s leading Business Innovation & Strategy Consulting firm. They use Human Centered Design (Thinking) to build new business ideas, product concepts & better customer experiences. Turian Labs also specialises in training teams to catalyze a whole new innovation culture within the organization. Turian Labs is the pioneer when it comes to mapping user-centric India-insights. With a decade experience in mapping India Megatrends, their trend knowledge becomes a pedigree while crafting future strategies and identifying white spaces for innovation. They also use this knowledge to help global brands craft their India strategy. 

Keen to gain more insights into India’s healthcare sector? Speak with us today to find out how our Next Step India can support your healthtech startup to explore new opportunities.

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