By Sangita Reddy & Bart Janssens
In April 2016, NPCI launched the Unified Payments Interface (UPI), which revolutionised India’s payment industry. Today, UPI is the fastest-growing payment platform in the world, accounting for more than a billion monthly transactions. On August 15, the prime minister launched the National Digital Health Mission (NDHM). NDHM will create an “open digital health ecosystem” like what UPI created in financial services. It will serve as a backbone for integrated digital health infrastructure and provide a platform for private innovations. Key features will include standardised health registries, unique patient IDs, patient health records, automatic claim settlement engines, etc.
Just like demonetisation created a high demand for UPI-like solutions, the Covid-19 crisis has prepared the ground for widespread adoption of digital healthcare solutions. The crisis has also brought together the public and private sector to collaborate and solve urgent healthcare problems.
Such disruptions are necessary considering India’s weak health system. We believe NDHM can spur a fundamental transformation in India’s healthcare system and unlock economic value worth over $200 billion by 2030. Healthcare demand will increase due to improved access and more affordable care solutions. Efficiencies in healthcare delivery will arise from the adoption of standardised digital practices, creating savings. Five themes will drive this transformation.
- Information transparency: Currently, there is no reliable repository of data to verify a health facility or a doctor. This promotes quackery. NDHM’s “health registries” will act as a single source of truth for all health stakeholders. This will increase trust in the ecosystem and reduce administrative burden related to doctor onboarding, regulatory approvals and renewals, and hospital or payer empanelment.
- Interoperability across all systems and devices will enable seamless flow of information, making it efficient to collaborate. Patients can share health records across providers. Users will be able to switch.
- Standardised claim processing: Currently, the claim settlement process is time-consuming and expensive. It stretches the short-term capital requirements for providers and entails high administrative burden for insurers. NDHM’s claims engine will enable faster validation of claims and easy fraud prevention, thereby driving improved unit economics.
- Prescription digitisation: NDHM will accelerate the digitisation of providers’treatment advice. This will re-balance the power. Players that can digitally engage prescribers consume e-prescriptions to up-sell or cross-sell, offer expanded services such as nudges for prescription adherence, will win.
- Playground for innovations: The government plays the role of a health provider, payer, and regulator. With NDHM, the government’s role will expand to building common playgrounds, leveraged by all entities to build innovative solutions.
These themes will drastically change the healthcare market dynamics, threatening existing business models. It calls for healthcare stakeholders to update their strategies.
- From episodic to wellness-oriented care: Currently, challenges across access, quality, and affordability inhibit Indians from seeking care. NDHM will bring transparency, enabling accurate demand-supply matching. With distance no longer a constraint, new opportunities will open for remote primary and post-hospitalisation care. Cost savings will enable new offerings like out-patient insurance and dynamic premiums linked to health outcomes. Pricing will be under pressure due to increased competition, increasing healthcare affordability.
- From service-based to value-based healthcare: Currently, incentives across health stakeholders are misaligned. Payers try to withhold money from providers while providers try to increase patient footfall. Patient-centric care is ignored. NDHM’s “data analytics” platform will allow population-wide correlation between stakeholder actions and health outcomes. Its public accessibility will enable patients to select providers that offer value-based healthcare.
Overall, NDHM will greatly empower patients. This will cause an unprecedented change in products and delivery models. Healthcare players can thrive or perish, depending on how quickly they adapt to the new environment.
Reddy is president, FICCI & Joint MD, Apollo Hospitals Enterprise Ltd and Janssens is MD and senior partner, Boston Consulting Group