How healthcare fintech startup LetsMD is changing the game for patients and hospitals
Amid an ongoing digital revolution in India’s healthcare system, LetsMD, an online platform integrating transparency, discovery and financing, is helping patients compare prices of surgeries, quality of hospitals and doctors, and pay in EMIs.
Doctors may be saviours, but the modern malaise of hospitals holding patients to ransom can’t be treated. We all know someone who submitted to a hospital only because s/he had no idea, time or measurement to make a comparison, and then struggled to make hefty payments.
But no more. For a Delhi-based healthcare fintech startup is aiming to simplify the process for patients and their families.
LetsMD, founded by Nivesh Khandelwal, lets users compare hospitals, look at doctor videos, compare pricing for surgeries, and book an appointment at the hospital of their choice. It also offers the option of converting the surgery bill into an EMI at low interest.
Nivesh, whose family has been in the healthcare sector for over four decades now, says he woke up to the need of a transparent and easily discoverable platform to help patients when setting up his family’s Ridge IVF centres across north India.
“Pricing and quality transparency are non-existent in healthcare. India is about a decade away from quality transparency, but pricing transparency is a challenge that can be immediately addressed by technology,” he says.
His work also brought the realisation that 86 percent of healthcare in India is delivered in the unorganised sector — small doctor owned/managed hospitals and nursing homes. These hospitals, he feels, are at par with large chains in terms of quality but are priced at least 30 percent lower. Their challenge is that they lack the bandwidth to market themselves and make themselves discoverable.
Nivesh says: “My family owns Gouri Hospital in Delhi. Since 1989, we have done about 55,000 deliveries and an equal number of gynae surgeries. However, nobody outside Delhi visits us. The reason is the lack of online/digital marketing.”
How LetsMD works
The healthcare service comparison platform was founded in December 2015 by Nivesh, a Wharton MBA with over 10 years of experience across sectors; Tenzin Thargay, an IIM-B graduate with over a decade of experience in consumer internet and digital health platforms.
LetsMD takes a marketplace-based approach to tackle the discovery, transparency and affordability problem in healthcare. The startup has partnered with around 300 hospitals, including big names like Fortis Healthcare, BLK Hospital and Apollo Hospitals, and single speciality chains in Delhi-NCR.
So if a doctor recommends a surgery, you can log into the LetsMD platform to search and compare hospitals, check doctors and surgery packages, connect with doctors in case you have any questions, choose a hospital and book an appointment. Up to three choices are available. Patients can also opt for the EMI facility, if needed.
Nivesh feels that the financing insurance penetration is low in India. “Over 30 percent of the urban and 70 percent of the rural population takes a loan for medical expenses. However, only 9 percent go to banks; others either go to family or moneylenders who charge exorbitant rates,” he says.
The reason, he feels, is that banks take a considerably longer time with the loan process while hospitals demand money on time.
Existing patient financiers like Bajaj Finserv follow an offline model where they partner with hospitals to source patients.
But Nivesh feels this is a sub-optimal approach as they interact with the patient at the last hour; his agenda is to target them from the first minute.
“The out-of-pocket expenses Indians will have to incur over the next 10 years amount to $1 trillion. Of this, 50 percent will have to be financed. So essentially, we have a $500-billion opportunity to tap,” he says.
LetsMD ensures that by the time a patient reaches the hospital, the loan amount is ready to be disbursed. Interest rates start from 0 percent and the tenure of the EMI lasts between 10 months and 24 months. The aim is to make healthcare affordable and accessible.
Integrated healthcare marketplace
LetsMD currently has a team of 25 people. The startup claims to have visitor traffic of 50,000, with 500 patients using their platform till date.
But LetsMD encountered multiple challenges, including recruitment of employees to getting hospitals on board, when it started operations. The startup requires sensitive and personal information from doctors and hospitals, which most are initially reluctant to share.
“The biggest challenge is getting smaller hospitals as they do not feel the need to market themselves apart from sharing prices. Another challenge has been finding management professionals with healthcare experience,” Nivesh says.
LetsMD convinced hospitals using a selective sharing approach and later got all the requisites in place. Today, the company has over 300 hospitals like Fortis Healthcare, BLK Hospital and Apollo in the Delhi-NCR region on its platform and offers about 40-plus elective surgeries.
The founders believe their unique team of experts and the complexity of their business – as it involves life-changing decisions – set them apart.
Nivesh says: “An integrated healthcare marketplace with the ability to lend digitally is very challenging. However, we are here to stay.”
LetsMD generates revenue in a two-fold manner. Hospitals pay them a lead generation fee while lenders pay them a loan origination fee.
In November 2016, the startup got angel funding amounting to $750,000 from a slew of investors, including Waterbridge Ventures, Calcutta Angels Network, LetsVenture and Anupam Mittal. The funding is being used to develop and strengthen technology and marketing teams, and expand to other cities.
Also Read: Calcutta Angels Network invests Rs 1cr in health-tech startup LetsMD for 8pc stake
The digital revolution
LetsMD plan to expand to 20 Indian cities to provide tertiary care infrastructure. They are also in the process of acquiring an NBFC (non-banking finance company) licence to start lending themselves. The goal is to target patient finance, medical equipment finance and working capital finance to SMEs and MSMEs in the healthcare sector.
According to IBEF, the healthcare market in India was worth close to $100 billion as of 2015 and is expected to touch $160 billion by 2017 and $280 billion by 2020, clocking a CAGR of 22.9 percent. Of the overall market, the healthcare delivery sub-segment accounts for 65 percent.
The big names in the healthcare space include Tencent-backed Practo, Ratan Tata-backed Lybrate, Medwell Ventures, Accel Partners-backed Portea Medical, and MedGenome. There has been a flurry of deals in the healthcare space recently. Healthians, an online diagnostics and wellness startup, raised $3 million in a Series A round led by Beenext. Neurosynaptic Communications, a provider of telehealth technologies, raised about $1 million in a round led by Indian Angel Network, with participation from Axilor Ventures. Doctor Insta, a healthcare consultation startup, received over $1 million from US-based venture capital firm RoundGlass Partners. In Bengaluru, Idea Bubbles raised $700,000 from early-stage funding platform 1Crowd, Eureka Forbes and parent Shapoorji Pallonji & Co.
India’s healthcare system is on the cusp of a digital transformation but the ecosystem is still evolving. Big players like Practo and 1MG are in the limelight, but LetsMD, which has integrated healthcare with finance, has a clear edge.