Tenzin Thargay, Co-founder, LetsMD, a healthcare fintech start-up, in an interaction with Prathiba Raju, elucidates on how the company aims to make healthcare accessible and affordable to 50 per cent of India’s population which doesn’t have access to tertiary-level care due to unavailability of immediate liquidity
What made you venture into healthcare financial start-up?
LetsMD focuses on small scale hospitals and 90 per cent of our clients are from small hospitals. As these hospitals work more like rental shops, LetsMD supports them to establish a robust customer relationship management (CRM) and help them attract nearby patients. Today, 50 per cent of the rural population in India and 30 per cent in urban India go for loans or sell assets to pay their hospital bills. Large PSU banks are more inclined to corporates, and personal loans for the salaried class. This is the reason why micro finance institutions are faring better in one or two states in South India, while in North India, the picture is grim. Bajaj Finserv provides personal loans and SRE, Fullerton, Sriram Funds are inclined to infrastructure finance. A lot more needs to be done in medical loans and this is where we want to make our presence felt.
How has been your journey been so far? What are your expansion plans?
LetsMD was started in 2015 and the focus for the first 12 months has been to establish itself in the Delhi NCR. We are in the process of completing Series A funding from a venture capital group. By December 2017, we will venture into four more cities Bengaluru, Chennai, Hyderabad and Mumbai. Right now, we have nearly 40 elective surgeries in our kitty and we hope to cover 80 per cent of the tertiary care infrastructure in every city where we have our presence. Eight per cent of India’s tertiary care hospitals are in 20 cities and it will cover these target cities over the next three years and expand the surgery basket to 100 elective procedures.
How do you want to bring formal financial services in the health sector?
We don’t provide cost of surgery as we don’t have the inventory. LetsMD covers 40 and above elective procedures like IVF, cataract, lasik, knee replacement, gall bladder surgery. Elective surgery is more like FMCG products as everybody knows about IVF, cataract where the cost of surgery do not extend more than 5x. If an IVF procedure costs Rs 2 lakh, LetsMD offers an EMI of Rs 5000 per month. In cataract surgery, which costs Rs 50,000, the EMI comes down to Rs 4000 per month. We have created a subvention-based loan, where a person pays Rs 50,000 for a procedure through EMIs. Across Delhi and the NCR, we have tied up with 300 super speciality
hospitals. We get 10 to 15 per cent hospitals per procedure, for example for Rs 1 lakh procedure we earn Rs 10,000 to Rs 20,000. From each medical loan, we earn 15 to 20 per cent, where five per cent is from the customer and 15 per cent from hospitals.
There is no financial innovation in the healthcare sector. Your comments.
The government-run health schemes like Rashtriya Swasthya Bima Yojana (RSBY), Central Government Health Scheme (CGHS) and Employees State Insurance Corporation (ESIC) cover only 15 to 20 per cent of the population and the treatment coverage is less. Meanwhile, in the private health insurance space, insurance offered by ICICI Lombard covers only a few of them. Some large public sector entities give good health insurance cover but a majority of the private companies which have 100 to 500 employees, do not treat health insurance as a priority. Insurance has less penetration in India in comparison to many other countries. The government’s focus is not very clear when it comes to insurance. It should introduce innovative PPP initiatives. With ease of communication, people are increasingly trying to adopt technology and are willing to pay for good health services.
What are the benefits of LetsMD?
First is transparency in pricing and the second is trust. Healthcare is such an area that any medical graduate can set up a hospital, there is no stringent evaluation. Though NABH checks hospital infrastructure, OTs, beds, there is zero focus on clinical outcomes. LetsMD focuses on building trust with the patient by giving a ground report of the hospital and the surgeons. We have a team that visits each hospital and checks the equipment. We also have a question bank to ask the doctors and check the authenticity of the hospital. We have a team of five senior MBBS doctors, who verify and analyse the data.