In the past, insurers didn’t offer OPD cover with their policies because they were susceptible to fraud. Outpatient expenses include doctor consultation, diagnosis, medicines and even medical procedures which do not require hospitalisation. This creates lots of bills, says Prashant Tandon, founder of Gurgaon-based e-pharmacy 1mg. Max Bupa has tied up with 1mg to get digitised bills instead of paper bills as the incidence of fake bills and fraud is higher in outpatient insurance, says Tandon. The cost of detecting fraud is what makes it unviable for insurance companies to price policies in a way that people would benefit from the insurance.
Keeping crime rate in check
The only way fraud can be controlled is via proprietary and trusted channels or digital networks of doctors, labs and pharmacies. That’s why in January 2018, ICICI Lombard launched outpatient health insurance powered by Practo’s network of doctors. A month later, Max Bupa introduced a digitally-enabled ‘Everyday Use’ Health Insurance Plan by partnering with Practo for its network of doctors, GOQii for personalised health coaching and 1mg for medicine delivery.
Others, such as Apollo Munich and Religare Health, are relying on HealthAssure. HealthAssure spent seven years painstakingly building a network of 3,100-odd centres, including clinics, diagnostics and pharmacists in 1,100 cities. It even negotiated discounted rates at each of these centres. It earned a revenue of Rs 17.8 crore ($2.6 million) in FY16-17.
“It is not an easy product to create in terms of inventory and quality since the margin of error is not 5% or 10%. It is sub 1%,” says Varun Gera, CEO of HealthAssure. “A healthcare client remembers one bad incident and that breaks the trust,” he adds. It is not easy to deliver quality healthcare without standards and protocols developed and implemented. In PolicyBazaar’s case, it will also include training 1,000 doctors. The process takes time.”
This is why private health insurers prefer tie-ups with companies who have already developed these networks. Using the network of, say, Practo or HealthAssure, they can offer OPD insurance products. Last year, The Ken reported that US health insurance major Aetna acquired Delhi-based Indian Health Organisation (IHO) because it saw a market in financing outpatient expenses in India. IHO was seen as a means to this end since it had developed a network of 16,500 clinical partners in 38 Indian cities. It was also able to minimise the misuse of this network through digitisation.
Dahiya, however, wants his own network. While this flies in the face of conventional wisdom, that doesn’t seem to faze Dahiya. He says he started building it three months ago. It’ll be ready in another three. “We have the network in place. It’s very easy. Building it was not what was complicated, but controlling it is,” says Dahiya.
Dahiya is confident. And this confidence stems from a secret weapon.
By Diwali this year (November), PolicyBazaar’s parent company, Etechaces Marketing and Consulting Pvt. Ltd, is launching a new entity. Called DocPrime, it’s a virtual doctor consultation platform in the same vein as China’s online healthcare platform Ping An’s Good Doctor. The fact that Ping An’s Good Doctor is also backed by SoftBank is no coincidence.
ETechaces is betting big on DocPrime. DocPrime will scale up to a service powered by 1,000 in-house doctors who will offer teleconsultations and offer e-prescriptions where possible.
The platform could also have an artificial intelligence (AI) offering as well. Talks have already begun with Babylon Health, the UK-based healthcare startup that uses AI to diagnose diseases via symptoms entered into its apps. A joint venture could be on the cards, with Babylon providing the AI to disintermediate physical doctors and DocPrime bringing in and taking care of customers.
DocPrime is a free service. So, it won’t make money. At least not in the short-term. But that’s okay because that’s not the point of DocPrime. Instead, DocPrime is designed to be a massive organic customer funnel for PolicyBazaar.
“I will create that (demand) through a mechanism of 1,000 doctors who will not give false bills. Like Uber (did with its automated billing on behalf of drivers),” says Dahiya. These in-house doctors will be PolicyBazaar’s wedge to disrupt its prized target of healthcare insurance.
By March 2019, Dahiya says he expects 100,000 users will enquire with DocPrime’s doctors each day. That’s three million each month. He’s hoping that roughly 20% of them will require some sort of physical support, which means DocPrime will generate 20,000 (in-person) appointments daily. These 20,000 users are Dahiya’s real target. “We expect to sell a healthcare subscription to 15% of them at around Rs 200-300 ($2.9 – $4.4) a month,” says Dahiya, nonchalantly.