Challenges in ehealth sector in India

In the last decade Indian start-up environment has developed many-fold. With the digital push and government support, the emergence of start-ups is increasing in India. The environment is business friendly, and it is going to change the way investors look at the market. However, there are several challenges in the eHealth sector which an entrepreneur needs to take care.

1. Financial issues

However, there are certain limitations for the industry as well. Numerous start-ups have limited work-force which does not help them in any way. They are forced to close down because of lack of innovative strategies and ineffective business model. Finding investors is the principal roadblock for the budding entrepreneurs. Investors and government programs have financing enabled through different channels, but they’re available for all types of businesses. [1]

2. Lack of quality mentorship

Most founders of startups that could not succeed feel that the lack of proper leadership and mentorship is a prime reason behind their failure. Budding entrepreneurs do not get proper training and mentorship to succeed in the new venture.

3. Extremely fragmented and competitive market

Indian markets are usually unorganized and fractured that create a roadblock for startups to succeed and sustain under pressure. Behaviours of Indian consumer changes in every 30-50 KM that makes it difficult for a startup to build business or market strategy for their products or services. Hence most startups get immobile and gradually shut down.

4. Cultural and social biases

Indian society hardly supports the budding entrepreneurs in their ventures.

Most common questions for anyone to become an entrepreneur are:
What to do: Problem-related to creating a business idea and finding an opportunity or having a vision
Why do: Issues related to reward/incentive analysis, risk evaluation or any other benefits
How to do: Matters related to legalities and requirements such as clearances, licenses, approvals required-Issues related to resource availability including finances, technology, and labour supply

5. Regulatory issues

Founders still face some problems while establishing a new start-up. They have to make numerous trips to administration offices to get approvals. There is an urgent requirement to scrap or ease the regulatory sanctions. Taxes such as VAT, Octroi and excise charges are significant barriers in this process. IT authority NASSCOM has supported the omission of both direct and indirect taxes for all startups in India. [2]

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Challenges in eHealth sector

Healthcare is one of the main contributors to employment & revenue in India. In last decade, an enormous amount of success is accomplished in health care delivery. However, given the diverse geography of India, its challenges are equally varied.
Healthcare startups have struggled in India due to fundamental and operational challenges. Recently, ventures like Practo, Lybrate & Portea have grown significantly, but it was not easy for them. Private sector and Government cooperation have not reached the extent it required. [3]

1. Limited availability of medical professionals

Availability of a skilled workforce, regarding doctors and nursing & support staff, is cringing. Some states are facing the shortage of trained medical, nursing and paramedical staff. It is noticed that there is a steady migration of skilled personnel from the government to private and abroad, which could mean non-availability of quality care to the people who frequent government facilities or in States which have weak incentives to work. The doctor-patient ratio in India is 1:1674 against the World Health Organization norm of 1:10001. Furthermore, India witnesses 253 deaths per 100,000 people every year on account of infectious ailments. It is relatively higher than the global average of 178. [4]  On another hand, small budgets and incentives for the teaching faculty to undertake research or introduce innovative teaching methods, etc. have had a demoralizing effect that creates a negative impact on the quality of education and commitment of the faculty.

2. Low medical insurance

Health insurance in India covers the only 1/5th of the population. Additionally, from the ones who have some form of coverage, about 67% are under private insurance companies.
This low health care insurance saturation has resulted in a high amount of spending from one’s pocket. [5]

3. Low investment / funding

Healthcare startups are capital intensive and have at times slower returns especially in smaller towns and rural area. New-fangled start-ups have limited investment mechanism available in the market. It is also one of the most significant problems they face. One major factor every would-be founder needs to understand is that the growth in the sector is prolonged; it takes a lot of hard work and time to be successful. For instance, Practo who received their first funding after three years and took them more than six years to reach top healthcare startup in India. Only a few start-ups able to last in this pace of growth despite there is less competition in the market.

4. Affordability of health care service

Moreover, private healthcare providers are concerned about affordable solutions as the majority of the population merely have basic incomes.
With only 10% of the population having medical insurance, financial protection against medical payments is far from universal. Only small fraction of population upholds health insurance scheme while others are either covered by community –based insurance or enforced company health plans. [6]

5. Infrastructure gaps remain too substantial

Total bed density had increased to 1.6 per 1000 by 2013-14 but remains to significantly lower than the WHO guideline of 3.5 beds per 1000. Inadequate infrastructure is a critical problem that end-users face due to non-consumption of current resources. Patients hardly use the public sector amenities as they’re unproductive.

6. Complex industry

Innovative solutions take preference since the digital health sector does not give enough freedom to budding entrepreneurs. Industries rules are unclear as they disrupt while launching the start-ups. [7] So unless consumer knows the doctor or the brand, gaining trust is not easy.

7. Compliance concerns

Compliance with regulations is still a cause for concern for both governments as well as private organizations. Moreover, the system suffered from the lack of quick response and redressed system, with matters of medical negligence and failure mostly relegated to consumer affairs troubles.
An efficient network is required to manage the big set of healthcare providers in India. New legislation (like the Clinical Establishments Registration Act) have been passed but struggled in implementation.

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