Dr. Akash Rajpal, CEO of Ekohealth Explains Why High Healthcare Costs in India Are Unnecessary
Healthcare costs in India are high and rising. The burden that the high price of medical treatment places on patients is discouraging them from attending regular preventative check-ups, snowballing into a larger problem of increased prevalence of illness, and in turn even higher prices. The factors contributing to this range from low rates of medical insurance penetration, to the reliance on referrals for patient outreach, to marketing expenses aimed at acquiring patients. With high prices deterring patients, and healthcare institutions desperately needing patients for their own survival, the trend of rising costs is leading to ethically questionable practices of patient acquisition and retention.
Dr. Akash S Rajpal, MD and CEO of Ekohealth Management Consutants PVT LTD (Ekohealth), recognized the danger of these rising costs. In 2011, he established Ekohealth in order to change the way Indians approach healthcare. Serving as the middlemen between patients and healthcare providers, Ekohealth provides patients with discounted healthcare prices by making it feasible for the providers to offer them.
Dr. Rajpal’s approach is to first and foremost eliminate the referral fees that clinics and physicians charge for directing patients to hospitals. These high fees force hospitals to hike up prices or to unnecessarily extend their patients’ stay. “Hospitals are used to paying 10 to 50 percent as referral fees, which is unethical,” Dr. Rajpal explains. “We [are] trying to create a mind and culture shift.”
To create this shift, Ekohealth has become the contact point for patients seeking treatment. Using their established network of providers, Ekohealth is able to benefit both the healthcare providers as well as the patients. Hospitals and medical clinics partner up with Ekohealth to gain access to patients without paying any referral fee or accruing a marketing expense. By eliminating these costs, Ekohealth allows providers to offer lower prices to patients, who in turn come to Ekohealth to access these discounted prices.
As a means of expanding access to affordable healthcare, Ekohealth primarily targets middle class families and senior citizens. “We reach out to the earning younger population to secure their uninsurable senior parents and reduce the costs on care,” Dr. Rajpal explained. “We want them to be part of our large network, to be aware of promotions, guidance on cost comparisons, disease and procedure info, etc.” Ekohealth not only gives access to lower costs, but also empowers patients by encouraging them to choose their providers based on an informed decision.
By solving the problem of high referral fees and market inefficiencies, Ekohealth acts in many ways as an alternative to traditional insurance policies. Their services provide certain advantages, including discounted prices in areas generally not covered by insurance. “Apollo Pharmacy has tied up with us pan India, and SRL Ranbaxy, Lifecare and others have tied up to give amazing discounts to our members,” Dr. Rajpal explains. “These routine medicine expenditures and diagnostics are typically not covered by insurance.”
With this creative approach to restructuring the market, it seems Ekohealth has the potential to be far more effective than the current insurance system. A recent article cited the finding in an Indicus Analytics survey on financial assets that only about 26% of urban households in India are covered by medical insurance. Among the low-income populations, this number falls to below 2%. For whatever reason, people are not seeking health insurance. This has the potential of continuing to drive up costs of treatment if it leads to a higher prevalence of preventable illness. If demand for insurance remains low, the market potential for Ekohealth will stay high.
Unfortunately, the battle against the Indian system of healthcare is an uphill one. The current system, which relies so heavily on referral fees and ethically questionable practices, is well ingrained in society, and has made support from both doctors and investors difficult to come by. “The risk is being shunned by unethical doctors, pharmacy companies and hospitals,” Dr. Rajpal explained. “Many hospitals don’t join me because they have a set unethical practice, which they don’t want to disturb.”
According to Dr. Rajpal, this trend has affected their ability to reach investors. “Some investors would not invest as they do not believe the traditional practice of cuts and unethical referrals will stop, or that hospitals would join us as they are too ingrained in referral practice,” he explained. “They wanted me to take a referral fee model to make it quickly sustainable, which I did not agree to.”
Dr. Rajpal also found it difficult to find highly skilled people to jump on board with him. Being the only founder of the company, he realized he needed someone who would challenge him and push him to expand his vision of the company. “The challenge [was] to hire senior staff and employee who can be your extension to acquire customers, develop markets, etc., on low or negligible remuneration on a conviction, equity or revenue share,” Dr. Rajpal explained. “More than remuneration, the challenge is to convince them to join you when you are a nobody as people tend to join big brands.”
However, despite the uphill battle, Ekohealth seems to be coming ever closer to the peak. Recently, Dr. Rajpal and Ekohealth won the 2012 Ramanujan-Bose Prize, awarded to annually to leading Indian social impact innovators. Winning the prize, Dr. Rajpal explained, brought him together with leading social innovators from 35 different countries at Singularity University to discuss worldwide social impact projects. Through this exposure he recruited skilled advisors able to help take his company to the next level. In addition, earlier this month, former COO of AOL Canada and VP of Ericsson, Steve Doswell, joined Ekohealth as Chief Market Development Officer.
Dr. Rajpal and Ekohealth are currently developing two new products. They recently launched the Beta phase of an SMS based system that informs patients of inexpensive alternatives to prescription medications. Patients can text the name of a recommended drug to an Ekohealth number, and Ekohealth will respond with less expensive generic forms of the drug. The second product Dr. Rajpal referred to as the “reverse health e-auction.” Patients will define their required surgery and personal budget, then be grouped together and connected with hospitals at a bulk discount.
To Dr. Rajpal the future for Ekohealth looks bright. For Indians bearing the weight of unnecessarily high medical costs, it is a future that one can only hope for. Dr. Rajpal plans to transform the healthcare landscape into one without referral fees, with all inclusive surgeries and with more informed patients. “My vision to get costs down by at least 30 to 50%,” he explained. “My vision is that every family in India, especially the ignored middle class who struggles to save from his salary, is not bothered about health expenses.”
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