How Affordability Financing Is Reshaping Access To Healthcare In India

India’s healthcare system is experiencing a financial crisis. A NITI Aayog report revealed that Indians paid over $72 Bn out-of-pocket for healthcare expenses, making out-of-pocket expenditure (OoPE) one of the largest financial burdens for Indian households. 

This high expense frequently pushes families into debt and poverty. Unlike consumer goods, where financing options like “no-cost EMIs” are easily available, healthcare financing has been left behind. This disparity leaves many patients deferring essential treatments due to a lack of financial resources, aggravating health issues and increasing long-term medical costs.

In India, people often rely on savings, loans from friends and family, or high-interest loans to cover the costs of healthcare. Some customers have access to credit cards as a potential solution. However, many are deterred by the high interest rates and fees associated with them, compounded by the requirement to repay credit card expenditures within a 30–45-day window. 

There is an urgent need to fill the gap in healthcare finance choices by making them more accessible and affordable.

Benefits Of BNPL For Healthcare Consumers

With the rise of Buy Now, Pay Later (BNPL) services or affordability financing, a game-changing option has emerged to close this gap. BNPL provides a more convenient and easier alternative for people to pay for their medical bills, without requiring a good credit score or paying excessive interest rates. Lenders have integrated with healthcare providers to build subjection trades providing zero interest models for end consumers. A few of the main advantages are as follows:

Zero Percent Interest Rate Financing: One of the most attractive features of BNPL in healthcare is the 0% interest rate. This makes healthcare financing more affordable, removing the financial strain associated with high-interest credit card payments.

Improved Access To Healthcare: By spreading the cost of treatment over a series of instalments, BNPL allows more patients to access necessary medical services without the need to defer care due to immediate financial constraints. This can lead to earlier diagnosis and treatment, improving overall health outcomes. Players in this sector are now capable of providing up to Rs.10 lakh to patients and families for healthcare treatments.

Increased Financial Flexibility: Patients can manage their finances better with BNPL, avoiding the need to dip into savings or take out high-interest loans. This financial flexibility is crucial in a country where a significant portion of the population lacks health insurance or sufficient coverage, bridging the gap between insurance provisions and treatment costs. 

Enhanced Patient Experience: BNPL services can significantly enhance the patient experience by reducing the stress and anxiety associated with large medical expenses. This peace of mind can positively impact recovery and overall well-being.

Future Trends In The BNPL Healthcare Space

The future of BNPL in healthcare looks promising, with several trends indicating continued growth and innovation:

Integration With Embedded Finance: Embedded finance, which integrates financial services into non-financial platforms, is set to transform healthcare transactions. By embedding BNPL options directly within healthcare providers’ payment systems, the process becomes seamless for patients, enhancing accessibility and convenience.

Regulatory Evolution: As BNPL services grow, regulatory frameworks will evolve to ensure consumer protection and the sustainability of the business model. This could lead to more standardised practices and increased trust in BNPL options among consumers.

Technological Advancements: Advances in technology, particularly in fintech, will drive innovation in BNPL services. Enhanced data analytics and AI can improve credit risk assessments, personalise financing options and streamline the approval process, making BNPL more efficient and user-friendly.

Increased Adoption By Healthcare Providers: As the benefits of BNPL become more apparent, more healthcare providers are likely to adopt these services. This adoption will be driven by the dual advantages of increased patient satisfaction and higher revenue from treatments that might otherwise be postponed or foregone.

Expansion Into Rural and Underserved Areas: BNPL has the potential to significantly impact rural and less fortunate populations by providing financial solutions where traditional credit systems are less prevalent. This can democratise access to healthcare, ensuring that more people receive timely and adequate medical care.

Conclusion

There has been a sea change in the way healthcare is funded in India and it all started with BNPL services. A major issue in healthcare is affordability, which BNPL aims to solve by providing zero-interest financing options. In the future, BNPL will play a crucial role in healthcare financing, caused by the developments in embedded finance, legislative backing and technology breakthroughs. 

While this change guarantees improved health results and a more equal healthcare system, it also increases the financial burden on patients. It has the potential to completely transform healthcare availability and cost as it gains momentum, bringing better medical care to more people in India. 

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