Does India’s Market Size distract from the quality of our healthcare?
India is a large country with millions of underserved health seeking consumers. People are living longer, with more chronic diseases and are having to spend more on health every year. India’s medical inflation is amongst the highest in the emerging markets. This represents a terrific opportunity for health entrepreneurs who aim to serve patients and build valuable businesses. But India’s large, underserved market is also a distraction from focusing on the quality of healthcare we provide our people.
For anyone serving patients, whether it is a neighbourhood GP, an orthopaedic surgeon doing hip replacements, a physician managing diabetes, a hospital serving new patients, a lab that focuses on diagnostic tests, a pharmaceutical company that sells medicines, a device manufacturer that sells medical devices, an online provider of health services or even a public hospital (that doesn’t have a profit incentive) … the focus of almost all providers is on acquiring and serving new customers. For every single customer acquired, there are perhaps 10 more out there, waiting to be discovered and served. This is very different from other markets where health organisations have moved from discovering new customers to deepening the value provided to existing customers. While health providers intellectually understand the value of deepening relationships with existing customers and providing greater value (an essential lesson in banking), operationally they are organized to focus on acquiring new customers. There remains no clear incentive for substantially improving the quality of the health product or experience, especially when there are 10 new customers waiting to take the place of every unhappy customer. Health consumers sense this transactional approach, have very little loyalty to providers and shop around for a new provider every time they need a health intervention.
Given the size of the Indian market, it is understandable why health providers focus disproportionately on customer acquisition. Get in a new patient, provide a transaction, monetize it, and then move on to doing the same with the next new patient. You could do this every day, every week, every year, for the next 30 years and still have enough patients waiting to be served with the same transaction! This is the main business model of most health businesses and providers , irrespective of their profit orientation. In the process, they don’t have the focus nor the systems to track the outcome of that transaction, explore how it can be enhanced to deliver greater value to the patient nor understand how that incremental value can be used to incentivize all stakeholders.
There is recent talk about value based pricing models that focus on improving patient outcomes by providing deeper, longitudinal interventions. This is very welcome. However, we will need to figure out how to incentivize and shift health provider focus from the existing approach (a mile wide and an inch deep!) to a longitudinal and deep intervention approach. The health case for quality focused, outcomes enhancing approach is clear. The financial case for doing that in the short term is not quite so, especially given the massive opportunity of new health customers in India.
