Why India’s Healthcare Industry Is Ripe For Disruption !

But why do entrepreneurs keep innovating in this industry despite the roadblocks. There are macro factors at play which have created billion $ companies in other sectors
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The biggest disruptions in Indian B2C e-commerce systems so far have happened in the areas of

“Roti, (remember the times when we had 10’s of menus stored in a drawer for ordering)

Kapda, aur (this refers to apparel and e-commerce in general)

Makaan (there was a time when the sole flow of information came from the brokers)”

 Of course, there are other areas now which have seen innovation (like daily transport etc.)

While this part is understandable, what is baffling is how muc

Healthcare Workers Administering Polio Vaccine (Image Credit: rupa / Shutterstock.com)
Healthcare Workers Administering Polio Vaccine

h healthcare has been left behind from a consumer’s perspective.

There are 3 main reasons:

1. Lack of touchpoints: Our daily interactions with healthcare systems are minimal for us to understand in depth the nature of transformation it should go through

2. Of the doctors, by the doctors, for the doctors: The healthcare ecosystem has been built around the doctors, who tend to be more cautious while adopting new technologies (for good reasons sometimes) and haven’t been a part of the digital revolution happening everywhere else

3. Lack of glamour: Any healthcare entrepreneur will tell how difficult it is to attract talent from a ‘cool shiny app’ company because healthcare is not cool enough!

But why do entrepreneurs keep innovating in this industry despite the roadblocks. There are macro factors at play which have created billion $ companies in other sectors.

1. Unorganized industry: Largely any healthcare segment is highly unorganized. Take diagnostics labs for example, which is 90% unorganized. The unorganized players typically do not have the marketing and logistics bandwidth that an aggregator or e-commerce company can provide

2. Importance of asset utilization: Being capex intensive, most healthcare services need high asset utilization above anything else. For example, hospitals measure revenue per bed, capex per bed etc. These are the same factors which made Uber and AirBnB successful

3. Lack of transparency: Healthcare players traditionally do not prefer to keep their prices transparent, not unlike real estate industry which has since matured and the information assymetry reduced

4. Immense scope for impact: While some entrpreneurs see it in numbers and others in terms of lives changed, there is no denying that any innovation healthcare industry has a huge impact on the society as a whole.

But these factors have always been in play. What has changed that makes this industry ripe for #Disruption?

1. Spillover from e-commerce mindset: Today when a doctor writes prescription for blood tests, the customer first wants to check on his smartphone how much it is going to cost him (and maybe if there are any discounts!)

2. Breaking of doctor-patient bond: With a high floating population and back-room healthcare deals becoming more visible, the traditional doctor-patient bond is becoming more and more fragile. As one doctor put it “Since there was an episode on Satyamev Jayate on doctors, we are afraid to suggest any particular provider or brand lest the patient should think we are getting a cut”

3. Now everyone has a smartphone: The way smartphone has changed how we travel, eat, buy will also impact healthcare in the same way

[Author: The author, Ujjwal Chaudhry is the founder of the online diagnostics portal labstreet.in He was heading the healthcare vertical for a consulting firm for 5 years before starting out on his own.]

Image credit: rupa / Shutterstock.com

12 comments
  1. My sense is that the core healthcare is still far from disruption – it will first start with ancillary services around healthcare (for e.g. discovery etc). What’s your take?

  2. @ashish,
    Yes, the healthcare revolves around the doctor.
    My personal view is, the money spent on doctor is very minimal when compared to money spent on diagnosis, medicine, post – surgery hospitalisation.

    Our indian health care start ups are focusing more on generating leads for the doctors with the online appointment scheduler rather than solving the core problem.
    With the help of technology, money spent on diagnosis and medicine can be reduced alot.

  3. I believe that the disruption will be more consumer-driven instead of industry-driven, irrespective of its form . For example, we see a lot of doctors conversing with their patients over whatsapp

  4. I agree Dinesh. For example, we are trying to increase the asset utilization for pathology labs which is abysmally low in this industry, this can bring down the prices in the long run!

  5. Most folks unfamiliar with the healthcare system tend to think of emergency medical care and doctor visits as the main driver of positive health outcomes. In reality, preventative healthcare and access to accurate information on medical conditions can radically disrupt the current state of public health in India. That’s our focus at mDhil – and it’s resonating with online users especially in areas of women’s health and family planning.

  6. @ashishsinha – I run http://www.Zest.MD and we work in providing a channel for effective online consultation. We do not provide any discovery services for the patients, but a tool for Health professionals – we see a large uptake of people consulting online – either from small cities, or for multiple opinions, or a large number base for ease.

  7. In my view “Access” and “cost” of healthcare are two main problems which need to be solved from consumer-view. From service providers viewpoint health it startups need to provide staff efficiency and tracking costs of delivery per bed or per patient whichever makes sense. Indian healthcare is largely unorganized and that’s the reason mosts startup are trying to solve the problem which is already well-defined as to how to bring more patients proactively to doctors and how to create stickiness in the delivery chain. What will be more disruptive is when patients can chose between various service providers based on quality/cost parameters and decide where they can go for care in their next visit.

  8. @ashish
    I have been following this space for sometime now. One major hurdle that healthcare faces is the body of regulators who don’t usually let any online player come in. They use the sheer pressure of controlling the retail offline space, which is still not disrupted.

    This becomes quite a hindrance for the online players. Another factor is the lack of clarity on the guidelines from the government (say) for an online pharmacy. There are moves being taken by companies operating in this space to ease out the regulations, get approvals and build a product.

    And with multiple apps that give information about generics, search doctors, tele and video medications etc coming up fast, this space is definitely getting cracked, one step at a time.

    PS – I work for a healthcare startup. Views are personal.

  9. Have Roti, Kapda and Makaan been disrupted!? Kapda may be to some extent as Marketplace model continues to empower small manufacturers and entrepreneurs. Its still very difficult to rent or buy a house without the help of a broker.
    The real disruption in healthcare will happen when it will become affordable to millions of Indians. Reliable EMRs will make health insurance more affordable and bring healthcare to deprived.

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