What India can learn from the US Healthcare System

Note: The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of his employer or any of its other employees.

Anecdotally speaking, in terms of technology adoption, India has generally lagged the western world by a couple of decades. Let me give a couple of examples:

1. The first laptop computer usable by the general public was introduced in the US market in 1983 (Link). On our side of the world, however, laptops only became available to affluent Indians in the late 1990s and early 2000s. In fact, most Indian households can’t afford to own a laptop even now.
2. Similarly, the concept of e-money or card payments started gaining traction in the US way back in 1950s and 1960s (American Express launched its first travel and entertainment card in 1958). Most Indians however have never used a credit card even in 2022. India’s debit and credit card per capita stand at 0.64 and 0.62 as of 2019 (source).

My intention is not to pinpoint how we lag in terms of mass technology adoption compared to the west but to highlight how we have skipped the incremental steps in the innovation journey and given ourselves something which truly solves our Indian problems in the most cost efficient ways.

For example, India never underwent mass adoption of laptops and desktops in the 2000s. However, you ask an average person living in Urban India and he would pretty much do the same things that her US counterpart would do on the internet such as social networking, online learning, online streaming, food delivery etc. Refer to the below infographic which visualizes this concept:

India has skipped mass adoption of desktops and laptops and is solving its digitization use-cases directly using cheap smartphones and the internet

Similarly, as a country, we never adopted the concept of e-money / credit and debit cards in a big way till the start of the 21st century whereas in the west, card adoption has been pretty high at least in comparatively urban areas. But here’s a pleasantly surprising fact :

Mobile commerce is the primary payment method for online shopping in India. It is already used for 46 percent of transactions, one of the highest rates in the world (source). With the adoption of UPI accelerated by the pandemic and demonetization, India was home to the highest number of real-time online transactions in 2020 ahead of countries such as China and the US with 25.5 billion real-time payments transactions.

Again, we skipped the incremental steps of adopting cards, e-wallets, traditional net banking etc. and moved straight to payments through UPI and we are leading the world at that!

And now Healthcare

Having glorified all the hops, skips and jumps we have made in solving our digital use-cases through mobile and internet, it can’t be denied that in healthcare, we are way behind the developed world. India’s healthcare spend as a percent of GDP sits at 1.3% as of 2021 compared to the US where the same number is 17%. It is no secret that our healthcare systems crumbled in the second COVID-19 wave (April-May 2021) and we need massive investment and innovation adoption in this sector.

Source:?Livemint

In terms of?digitization, we are still running our prescriptions on paper and there’s no electronic storage of patient data. In the US, however, Electronic Medical Record (EMR) adoption is more than 80%. Like always, US was an early adopter of technology in a critical industry and India can learn all the best practices while skipping the unnecessary incremental steps along the way. Following are three areas where I think we can learn from the US healthcare system:

1. Identifying a common key to unlock siloed patient information
2. Aligning hospital incentives with patient outcomes
3. Focus on health rather than healthcare

Identifying a common key to unlock siloed patient information

As many of you may already know, the US has one of the most digitized healthcare systems in the world with 80% of healthcare providers using EMRs. Medical device usage and wearable technology adoption is at an all time high. There are Health Information Exchanges (HIEs)which store health care information electronically across organizations within a region, community or hospital system. Add to that data captured by insurance companies, pharmacy chains, diagnostic labs, Government etc. The system is producing exabytes of data but with no common standard and primary key to stitch the siloed information together. Innovative startups such as Innovaccer Inc. are trying to solve this problem with their data platform.

Make no mistake, India will slowly but surely adopt electronic medical records. Indian consumers on the other hand will adopt wearable technology in a big way and medical device usage will be common place. There will be exabytes of information produced.

In 2018, the Government of India (GoI) launched the UHC scheme, known as the Ayushman Bharat Yojana. This national health insurance scheme has two main components — (i) the Pradhan Mantri Jan Arogya Yojana (PM-JAY) which aims to provide an INR 5,00,000 cover to the bottom 40 percent of the population for secondary and tertiary care and (ii) the establishment of around 1,50,000 health and wellness centers across the country for primary care, especially in rural areas. As a result, health data is being regularly collected for the said beneficiaries and there is a mandate from the government to digitize these records and take steps towards implementing EHR systems. Several national-level policies such as National Digital Health Blueprint (2019) are being formulated to create a pan-India digital health record system. At the provider-level, large health systems like Tata Memorial Hospital and Max Hospitals Private Limited have implemented electronic medical record (EMR) systems and are moving towards EHR (Source)

It is imperative to make that information interoperable. This implies that the patient data stored in different places should be able to talk to each other so that it can be aggregated and standardized to have a unified view of the patient. For example, Himanshu Arora may go to hospital A in Delhi and hospital B in Mumbai and both the hospitals should be able to fetch Himanshu Arora’s unified patient record quickly. That record should also have Himanshu’s vital information captured in his apple watch. If Himanshu took an at-home COVID-19 test just a week prior, the record should be able to reflect that information automatically. Needless to say, Himanshu’s claims details should be part of his record to ensure a smooth transition from the hospital.

All of this is possible if we have a standard way of storing health information and have a common key (a health ID equivalent to Aadhar) to map information from diverse sources. This is where having a unique health ID is so critical — it will be the primary key that connects patient data sitting at different places.

And by the way, credit where credit is due — Indian government has been quite farsighted in launching?ABHA?(Ayushman Bharat Health Account) which will be India’s equivalent of having a country level?EMPI.

If we do this properly right at the beginning, we will be able to skip the data consolidation problems that the US faced in the 2000s and 2010s. Even though, EMR penetration in the US is more than 80%, the healthcare system still struggles to have a unified patient view because all the information is sitting in silos at different EMRs at hospitals, claims databases at insurance companies, social databases of the Government, data warehouses of med-device and wearable technology providers etc.

Aligning hospital incentives with patient outcomes

Ever imagined that hospitals have perverse incentives. They make money when you fall sick. Therefore, economically speaking, a hospital has a perverse incentive to “sell you more” so that they can deliver value to their employees and shareholders. It is ultimately a business, right?

This is exactly what the Obama administration tried to change in the US and we can learn a bunch of things from what they did in the US. The accountable care mandate imposed by the federal government forced?a change to value-based care. Put simply, instead of being paid for the number of treatments and services performed, providers were incentivized to keep patients healthy and out of physician offices and hospitals.

Here’s a simplified example:?Hospital A has Rs. 100 in revenue in 2021 and Rs. 90 in cost of care to its patients thus making a Rs. 10 profit. Assuming the whole hospital patient population is insured, all of this cost of care is received by the hospital in the form of claim settlements by an insurance company or the Government (which acts as an?insurer).

In a value-based care setting, the Government / Insurance Company would incentivize Hospital A to bring down it’s cost of care to a benchmark value (let’s say Rs. 88 or a mutually agreed figure) in 2022 by offering an incentive of keeping the 50% of the cost reduction achieved . The only condition being quality of care should not be compromised. This reduction of Rs. 2 (Rs 90- Rs 88) will then be divided equally between the hospital and the insurance company (Rs 1 each).

If you see, it’s a win-win situation. The insurance company now needs to pay Rs. 89 as claim reimbursement to the hospital (vs Rs. 90 earlier) while the hospital makes an additional Rs. 1 bonus on top of their usual payments. This reduction in cost of care can only be realized if hospitals are able to keep patients healthy and out of physician offices and hospitals.

This is one of the greatest things introduced in the US Healthcare system. As India becomes more organized and health insurance products become more mainstream, the government should create financial frameworks where insurance companies and panel hospitals are able to have value-based contracts rather than the usual “per transaction basis” contracts.

Focus on health rather than healthcare

With greater digitization and awareness about health, the US health system has witnessed a continuing transformation from a culture of sickness to a culture of wellness. There is increasing knowledge about ways to protect, maintain and enhance our health, and greater public determination to couple that knowledge with actions. The whole system at least aims to enable patients to achieve wellness rather than merely fight sickness.

With rising education and income levels, more and more Indians are realizing the importance of fitness and wellness. As India powers through its digitization drive in the next decade or two, the mindset of the whole health ecosystem (patients, providers, insurance companies, and government) should focus on healthier lifestyles and wellness. Apps like HealthifyMe and CultFit are already gaining traction across the urban areas of the country and I believe in the next decade or two, India will surely be a healthier nation, literally and metaphorically.

With this drive towards wellness, there will ultimately be less burden on healthcare resources in a country where the doctor to patient population is abysmally low (ratio of physicians per 1000 people is 0.9 in India vs 2.6 in the US according to world bank?data).

If the India healthcare innovation story pans out the way it has panned out for payments and UPI, we are in for an interesting couple of decades ahead.