By Chris George


Healthcare costs in India have been on an upward trajectory for decades. According to the National Health Profile 2023, medical inflation in the country exceeded overall inflation and reached almost 14 percent last year. This increase poses significant challenges for families, especially middle- and lower-income families, who often face financial challenges when dealing with unexpected medical costs. However, innovative healthcare payment solutions are emerging to help families manage these costs more effectively.


The driving forces behind medical inflation in India


Several factors contribute to the rising costs of healthcare in India:



  1. Technological progress: Groundbreaking medical technologies and advanced treatments, while lifesaving, come at a high price. For example, robotic surgery and molecular diagnostics have increased the overall cost of medical care.


  2. Increasing burden of non-communicable diseases (NCDs): Lifestyle diseases such as diabetes, hypertension and cardiovascular disease are on the rise and require long-term care and expensive medications.


  3. Hospital infrastructure: Many private hospitals are investing heavily in infrastructure to meet global standards, increasing treatment costs.


  4. Pharmaceutical prices: Despite government interventions such as price caps on essential medicines, the costs of patent medicines and specialized treatments remain high.


  5. Medical tourism: While India’s reputation as a center for medical tourism boosts revenues, it also drives up local costs as hospitals prioritize international patients willing to pay higher fees.



The financial pressure on Indian families


The consequences of medical inflation are serious. A study by the Public Health Foundation of India (PHFI) shows that out-of-pocket healthcare expenditure accounts for more than 60 percent of the total healthcare expenditure in the country. For many families, this often leads to:



Innovative healthcare payment solutions


Several healthcare payment solutions are being developed to bridge the gap. This is how they make the difference:



  1. Expansion of health insurance:



The Indian government’s initiatives, such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), aim to provide healthcare to economically disadvantaged families. Private insurers are also coming closer and offering tailor-made health insurance for individuals and families. Innovations include:




  1. Digital platforms for healthcare payments and medical lending:



Healthcare-focused financial products, such as healthcare-focused payment apps, with built-in medical loans that can be repaid in equal monthly installments (EMIs), are rapidly gaining interest among users. These options provide immediate liquidity, allowing families to access quality care without depleting their savings. Many hospitals have partnered with financial institutions, as well as these providers, to offer interest-free EMI options for expensive treatments.


The rise of fintech in India has led to the rise of platforms such as QubeHealth-Pay and other financing companies:




  1. Employer-sponsored health care benefits:



Companies concerned about their employees’ health care and the potential strain that their family’s health care costs can place on their well-being are increasingly offering comprehensive health care packages that go beyond company-paid health insurance as part of their employee benefits. These often include:



Such initiatives reduce the financial burden on employees while promoting early diagnosis and treatment.



  1. Crowdfunding platforms:



Websites like Ketto, ImpactGuru and Milaap help families raise money for expensive medical treatments. These platforms use social networks to collect small contributions from a large number of donors, providing a lifeline to those in need.



  1. Subscription-based healthcare:



Healthcare providers are introducing subscription models that allow families to pay a fixed monthly fee for a range of services, such as:



The way forward


While these payment solutions provide significant relief, addressing medical inflation requires a multi-pronged approach. Policymakers must set priorities:



Additionally, collaborations between government, the private sector, and nonprofit organizations can accelerate the development of innovative payment models and health care delivery mechanisms.


Medical inflation is a huge challenge for Indian families, but the emergence of innovative healthcare payment solutions offers a beacon of hope. From insurance expansion and digital financing platforms to crowdfunding and employer benefits, these tools are transforming the way healthcare is accessed and paid for. As these solutions continue to evolve, they promise to ease the financial burden on families and ensure that quality health care remains a right, not a privilege.


(The author is the Co-founder and CEO of QubeHealth)


Disclaimer: The opinions, beliefs and positions expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs and positions of ABP Network Pvt. Ltd.



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