About Author: Senu Sam, Founder & CEO, Mykare Health is a passionate entrepreneur, startup enthusiast and professional with extensive marketing and management expertise in healthcare gained through working with some of the world’s largest healthcare companies. In a career spanning 12 years, Senu has responded to the day-to-day demands of his job with an entrepreneurial approach. He has managed large teams, led new initiatives, owned and turned around the challenges of the organizations he has been a part of.
There are numerous parallels between the financial services and healthcare sectors. Both have enduring conventional institutions, with many of the oldest banks, insurance firms, and healthcare systems existing for over a century. The intricacy of the systems is another issue. Sending a wire transfer or comprehending personal finances may be as difficult as attempting to grasp a medical bill or transferring information from one provider to another. In terms of customer satisfaction, consumers don’t generally appear to like going to the bank or the doctor. For obvious reasons, client satisfaction is poor in both businesses.
Healthcare and financial services are both crucial yet complicated industries. Each has many rules and regulations, mysterious business practices, and long-standing incumbents with competitive advantages. It was uncertain if each region would develop as a promising one for companies in the early days of venture capital. They did, however, appear.
Fintech is undoubtedly more developed now. Venture capitalists invested $132 billion in the sector in 2022, funding 5,000 start-ups. Around the same amount as fintech start-ups raised four years ago in 2018, healthtech businesses raised $57B across 2,900 companies in 2022.
The similarities between the current state of healthcare and the state of fintech three to five years ago are startling. For the first time, venture capital in the fields of healthtech and fintech grew by more than 50% from one year to the next in 2022 and 2018, respectively. And if the healthtech ecosystem follows the fintech model, the ramifications for where it will go are fascinating.
“The upcoming three to five years should be exciting if the history of fintech is any indication of the future of healthtech”
Fintech Back then and Healthtech Today
The factors that are enabling the healthtech ecosystem now and those that enabled the finance environment three to five years ago are quite similar.
Healthtech organizations faced a problem for a very long time: given their inexperience and small size, big players or health systems were unlikely to enable them to develop a wider range of services. Building specialised point solutions that were challenging to spread to additional clients was needed of healthtech entrepreneurs working with these organisations. However, if these firms weren’t involved, there would be insufficient perceived addressable market and income possibility to fund a Series A or B. These factors made it challenging to gain early momentum and create a large product with obvious growth potential.
Crises as an Impetus
We anticipate that the trajectory of FinTech will be followed by the larger healthcare sector. People lost faith in banking systems as a result of the 2008 financial crisis, which led to a rise in awareness of taking control of one’s own finances. Due to this and expanding legislative opportunities like PSD2 on Open Banking, customers began seeking for alternative, personalised, and more engaging services.
The COVID-19 pandemic ended up serving as Healthtech’s turning point. An urgent demand for individualised and alternative care solutions has emerged as healthcare has become a major topic of conversation on a worldwide scale. This helped to hasten the implementation of services like telehealth, which are now even permitted to issue remote prescriptions in some jurisdictions. More than ever, patients and healthcare professionals (HCPs) anticipate that the delivery of healthcare would be quicker and more seamless. Global healthcare access will be made easier thanks to the chance for HealthTech businesses to include the full FinTech stack into their offerings.
Resulting Effects for Health Tech’s Future
Fintech businesses entered the market in the middle of the 2010s with specialized products. Some banks provided savings accounts alone, while others were more concerned with payments and investment. However, over the past several years, we’ve witnessed a “great rebundling” in which companies have begun to pile on new product lines and capabilities while appearing to be quite similar to one another.
Similar to this, more businesses in the healthtech sector are now focusing on certain diseases, patient demographics, and geographies. I anticipate that these businesses will merge and provide a considerably wider range of services in the upcoming years, frequently through M&A. Given the high prevalence of patients with many chronic illnesses and the widespread vendor fatigue among big payers and health systems, this makes sense.
The upcoming three to five years should be exciting if the history of fintech is any indication of the future of healthtech.
A change is coming in the future. The adoption of new technology is presently occurring across all industries, and this tendency will only grow. There will be plenty of chances in the healthcare industry in the near future.
The nation’s medical and healthcare sectors will eventually be able to compete on a global scale with the best in the world. A bright future for India’s healthcare is indicated by the numerous initiatives being taken in this field by the public and private sectors.
**Views expressed by the author are his own.