We need new models in healthcare delivery and insurance: Sandeep Singhal of Nexus VP

The COVID-19 crisis exposed the fragility of healthcare systems across the globe. In India, the pandemic put additional pressure on the overworked healthcare system, with challenges such as lack of infrastructure, unaffordable specialised medical care, and lack of accessibility to insurance and information coming up.

It was to address these challenges and make quality healthcare available that many leading business people came together with healthcare consulting company ZS Associates to create the ZS Prize for healthcare.

The prize will look at ideas that can contribute to creating a roadmap that can help Indian healthcare impact all sections of society. It will look beyond technology and is open to ideas from students.

The people behind this initiative are Ravi Venkatesan (Business Leader, Author, and Social Entrepreneur Founder of GAME and Former Chairman of Microsoft India, ZS PRIZE Jury Chairman), Dr Dipak Jain (President  and Professor at China Europe International Business School, Former Dean of Kellogg School of Management), Kiran Mazumdar Shaw (Executive Chairperson of Biocon), Sangita Reddy (Joint Managing Director, Apollo Hospitals), Sandeep Singhal (Co-Founder and Managing Director, Nexus Venture Partners),Dr Ferzaan Engineer (Ex-Quintiles India Co-founder; CEO, CyteCare Hospitals; Member of the Board of Directors of Sun Pharma Advanced Research Company and Cytespace Research), DrVijay Chandru (Co-Founder and Chairman, Strand Life Sciences), and Prof K Srinath Reddy (President, Public Health Foundation of India).

Sandeep Singhal, Managing Director of Nexus Venture Partners, believes that the ZS Prize can be the catalyst to bring together a number of people from diverse backgrounds to work on creating solutions to tackle these problems. He speaks to YourStory about the state of healthcare in India, the importance of insurance, and how the ZS Prize will make a difference.

Edited excerpts from the interview:

YS. How did the ZS Prize come about and why did you associate with it?

SS: ZS Associates is a leader in healthcare innovation and wants to make the system more effective. They reached out to create a prize. COVID-19 has brought healthcare innovation to the forefront as the virus went from large cities to all the small towns.

We have seen a lot of ideas and technology teams at startups giving up time to build something in the healthcare side. This prize is for students, professionals, and companies to come up with ideas for healthcare. This is a broader way to approach ideas and not just look at startups. India is a market that needs ideas in healthtech beyond corporate and startups. That’s why I chose to be a part of this.

YS. There are several awards and prizes in India. How should these ideas be mentored?

SS: ZS Associates is part of the traditional healthcare domain and they are very well poised to mentor these ideas in the long run. The ideas that will come and present to me will continue to talk me on a regular basis. Several luminaries are a part of the jury and will spend a considerable amount of time to mentor and grow these ideas. People will get access to the jury. We have signed up for a larger commitment to healthcare and will be involved beyond the prize.

YS. Healthcare in India is complex. How should a startup idea deal with this complexity?

SS: The issues in healthcare are vast. Healthcare has to deal with liability first and foremost. It is regulated and hence your product has to work with safety and efficacy in mind.

As an individual you cannot go and build a device today and test efficacy with a small amount of money. The ecosystem in India needs a high level of innovation, and innovation can happen only when there is a large source of capital, which is lacking today.

The West has large, dedicated healthcare funds focused solely on innovation. The other problem is that India does not have enough doctors and ancillary healthcare service providers. Every doctor needs a technician and a team of nurses.

There is such a big opportunity here to provide livelihood for these ancillary services; these services will address the gap of access to treat many more patients.

India has done very well with the ASHA workers; that addressed the gap in small villages. We invested in a few startups like Lybrate, Pharmeasy, and Practo that can increase access to healthcare. However, we need think of addressing gaps: how does one increase access to a remote village in Orissa? We have to ask whether we can enable local delivery by working with the sarpanch and using technology and the ecommerce delivery network to reach a wider set of people. It is very much possible.

We see people build interesting apps and interesting developments in using teleconsulting through an app. I am going to go back to my point on liability. These businesses don’t fall in that category and we see entrepreneurs build access to healthcare with ecommerce and apps.

YS. What role can insurance tech play going forward?

SS. Insurance is very important and the distribution of insurance using technology is already happening. We have funded a company in that space. All general insurance companies are now building strong healthcare practices. The role that insurance has played in the US market is massive.

Look at what has happened in the larger context in Canada, the UK and the US. The governments have all driven innovation to improve outcomes and reduce costs. The insurance companies have pushed for this.  

Unfortunately, in India, we are still self-paid, which means people pay out of pocket. We do not have the power of the payer to tell the hospital to perform a particular procedure to improve the outcome or that they should be following a particular protocol.

As insurance becomes powerful and Ayushman Bharat takes off, the pricing of healthcare will come down and there will be more power for the payer.

The government has a lot of buying power and it will ensure the payer is protected. Entrepreneurs can build on this. Is Ayushman Bharat easily available to users? Do poor people know that they have Rs 5 lakh worth of insurance cover? This information should be taken to the poor.

Today, your insurance cover is gone in one procedure. There should be information that only a part of your cover can get spent on a procedure, and the rest can be used again. We need new models in healthcare delivery and insurance. I see both as opportunities in India.

YS. If Indian startups can build world-class products through the UPI rails, we can do the same if there was a health stack. What are your thoughts on this?

SS.I am bullish on the way the government is looking at the National Development Health Mission and the health stack is part of it. The UPI is a classic example that you put the rails and the innovation takes off. Look at the amount of capital that has gone into fintech.

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A health stack will enable innovation. There will be a health ID that will give is the power to decide who will use our healthcare data. This is where innovation at the patient level will grow and open up new vistas. However, it has to work with what exists in healthcare and should align with existing NDHMsystems.

YS. Healthtech also needs financing. Any advice on new underwriting models for fintech and healthtech to come together?

SS. In healthcare fintech, I have already seen three or four companies. I have seen people underwriting some healthcare costs. Bajaj Finserv has been a role model for everyone and has shown how point-of-sale financial products work. Bajaj Finserv worked because technically the consumer was not paying for the loan, it was zero interest; subvention was what paid for it. This will work because of the capacity we have in Indian hospitals, which will make them provide subvention. Somebody who is self-insured will go down this path to get loans from the hospitals.

In healthcare financing, there is no concept of repossession. One has to understand underwriting models to make impact and money. Healthcare loans come under the category of unsecure personal loans. It is both important from an overall ecosystem to have healthcare financing with standardised pricing.

A smart entrepreneur can bridge this gap between financing institutions, hospitals and insurance. We have funded startups that use real-time data to understand whether customers are credit worthy. Can we do the same for healthcare? It is possible. Healthcare is a harder problem to solve, but is very rewarding.

YS. Your advice to entrepreneurs keen to work with the government on healthcare? How will they be evaluated for the ZS Prize?

SS. I want to tell young entrepreneurs that governments today have a lot of willingness to work with ideas and want to democratise healthcare. Look at the use of tele-ICUs in government hospitals. The number of fatalities has come down thanks to telehealth. I have worked with Maharashtra and other state governments to help them with COVID-19 responses.

Once an entrepreneur addresses the safety and efficacy part and becomes part of the ecosystem, they cannot be taken out. The nature of healthcare innovation in India is very high in India. The smartphone is a standardised device for diagnostics. We are very good with our software and in improving underpowered hardware components.

There is a chicken-and-egg situation when it comes to large-scale investments in healthtech in India. That’s what the ZS Prize wants to solve. If the world comes to see the number of healthtech ideas in India, there can be people who would want to create a standalone healthtech fund in India.

The ZS PRIZE will accept registrations - ideas or solution prototypes– till December 21, 2020.The top 20 selected teams, evaluated on pre-defined criteria, will go through a six-week mentorship with ZS leaders between January and February 2021. The top eight teams will present their solutions to the jury in March 2021.