A Framework for Fintech for Health

Retrieved13July2022. https://data.worldbank.org/indicator/SH.XPD.OOPC.CH.ZS ;TheWorldBank.(2022). Domestic general government health expenditure (% of Current Health Expenditure). WorldBankOpenData.Retrieved13July2022. https://data.worldbank.org/indicator/SH.XPD.GHED.CH.ZS ;TheWorldBank.(2022). Domestic private health expenditure (% of Current Health Expenditure).WorldBank OpenData.Retrieved13July2022. https://data.worldbank.org/indicator/SH.XPD.PVTD.CH.ZS ;

Whenpatientslacksufficientfunds–whetherpublicorprivate –topayforcare,theyalsolackaccesstothehealthandfinancial institutionsthathigh-incomepeopleenjoy.Asnotedabove,due totherapidadoptionofmobiletechnologies,low-tomoderateincomepeoplemayhavebetteraccesstoamobilephonethana doctor or a bank. Fintech for Health aims to overcome these barriers while leveraging the three trends of digital transformation,fintech,anduniversalhealthcoverage.

A Framework for Fintech for Health

To delineate a framework for Fintech for Health, we found it useful to subdivide fintech solutions into three components: digitalfinancialsolutions,keydigitalenablers,andthechannel to healthcare services. We developed and refined this framework through successive iterations and discussions with fintechandhealthcareproviderstoattempttoreachacommon understandingofthechallengestheyface.

Figure 8. Fintech for Health Framework to Solve Patients’ Health Finance Challenges

Source:ACCESSHealthInternationalSoutheastAsiaTeam

We recognize that the array of fintech solutions is vast and beyondwhatwehavepresentedhereandthatitwillcontinueto expandastechnologyand business modelsevolve. Wepropose a startingpointtolookspecificallyatsolvinghealth financing challenges where the burden on paying for care falls heavily on the individual. We recognize that fintech also has a significant role to play in lowering the overall cost of care by making healthcare backend systems more efficient and affordable,includinguniversalhealthcoverage systems.

Key Digital Enablers

Digital technologies have the potential to make healthcare and finance more targeted, affordable, scalable, and convenient. In many under-resourced countries, technology provides additional infrastructure for delivering healthcare that is

affordable, efficient, and increasingly aligned with users’ preferences and behaviors. Through fintech for health, these countries have an opportunity to leapfrog legacy finance and healthsystems. FourmaindigitaltechnologiesenableFintechforHealthmodels: information,analytics,e-wallets,anddigitalidentification.These rest upon a digital platform that integrates multiple functions andservices.

The Foundation: Digital platforms

Forming the foundation of our fintech for health model, digital platformshavebeenreshapingthewayweinteractwith,choose, pay for, and receive goods and services, offering convenience, affordability,andreach. Digitalplatformsassumeamultitudeofforms,fromwebsitesto e-commercesites,paymentsapps,ridesharingplatforms,health messaging apps, medical claims systems, or e-governance platforms. Many are now evolving into “superapps”. Digital platformsfacilitateconvenientdeploymentofFintechforHealth solutions by connecting financial solutions and healthcare providerstoindividuals. In China, WeChat and AliPay tapped into their large consumer payments base to offer healthcare services and healthcarespecific financing options. The Grab and PingAn joint venture Good Doctor was designed to combine a superapp with a telemedicine platform to offer digital health services across SoutheastAsia.

Therearefourmain“componentenablers”thatformthedigital platformbase:information,analytics,e-wallet,anddigitalids.

Enabler 1: Information

The availability of information aggregated, tailored, and interpreted for individual needs empowers people to make better decisions for themselves. In the sphere of fintech, price comparison sites allow people to choose the most appropriate and affordable insurance, loan, or bank account, increasing transparencyanduserautonomy.Inhealthcare,theavailability of information is critical to guiding decision-making, from finding the right doctors to researching available treatment options. Increasingly, private insurance and pharmaceutical patient support programs are offering bundled solutions with digitalhealthandhealthcare“conciergeservices.”

Enabler 2: Data analytics

Inhealthcare,asinfinance,dataanalyticsisdrivinginnovations in personalized risk assessments, market insights, and societal decision-making that can make healthcare financing more accessible.

At the individual level, analytics has yielded unprecedented personalizationandcustomizationofloansandinsuranceplans. Importantly,dataanalyticshasledtotheemergenceofentities providing “alternative risk scoring” that uses non-traditional meansofassessingcreditworthiness.Withonebillionpeoplein Asia unbanked, these services have become important for unlocking credit and capital, in addition to providing point-ofcareloanstoindividualsandfamiliesintheirtimeofneed.

Atthesocietallevel,policymakersandindustriesareusingdata analyticstoshapeourhealthcareenvironmentandexperience. Using the data derived from Fintech for Health models, policymakers and health systems planners can assess health-

seeking behavior at the community level by processing billing, procurement, and income data. Furthermore, finance technologiesmayovercomesomeoftheongoingchallengesthat arise in aggregating information across fragmented and rudimentaryelectronichealthrecord systems.

Enabler 3: Digital wallets

Digital wallets give users an opportunity to receive wages and timelyoutside payments (e.g., family,government,employers), eliminate distance, store value, make payments, and apply for other transactionservices,suchaslending.Digitalwalletscreate an avenue for social insurance payments and timely claims reimbursement without requiring users to open a formal bank account.

Figure 9. bKash and digital financial inclusion in Bangladesh. Case Study: bKash, mobile wallets in Bangladesh

Enabler 4: Digital ID

Digital identification allows governments and private sector enterprises to authenticate a person’s identity and deliver servicesinanefficient,private,andsecure manner.TheWorld Bank refers to digital ID as a “game-changer” and provides an

opportunity for developing countries to leapfrog their developedcounterpartsbycreatingmoreefficientandmodern systems.19 Digital identification uses biometrics, such as electronically captured facial features, iris patterns, and fingerprints, to establish a unique identity. It replaces paper data with digital datasets, offering security, transportability, and efficiency. By usingdigitalID,governmentscanissuedigitaltokensthatcanbe used to record financial data, health data, and eligibility for socialbenefits,therebyincreasingaccesstothesesystemsboth onlineandoffline,20particularlyforunderservedpopulationsfor whomtheseserviceswouldotherwisebeoutofreach.

Healthcare Delivery Channels

Thelinkageofdigitalfinancialservicestotraditional(brickand mortar clinics, hospitals) and digital (telemedicine) health delivery channels are helping to address the challenge of immediate financial needs for emergency or high-cost healthcare services. Moreover, digital financial services for healthprovidesaseamless,convenient,andaffordablewayfor peopletoaccesshealthcare. Traditional healthcare organizations have a significant role to play in making new financing models accessible for their patients. These systems, or networks of systems, have the capability to counsel patients in their communities and refer themtorelevantresources.

In-person clinics, pharmacies, and hospitals are increasingly integrating telemedicine into their practices. This integration gradually gained traction over the last five years and has acceleratedunderCOVID-19,aspatientsstruggletoreachbrick-

and-mortar providers and fear further exposure to the SARSCoV-2 virus. The regulatory landscape followed suit, allowing greater insurance coverage of telemedicine consultations and pavingthewayforinnovativepartnerships. Additionally, fintech platforms and digital wallets, including bKashandPathaoinBangladesh,MoMoinVietnam,andTencent in China, are offering telemedicine services and insurance products directly on their platforms, which are promoted throughtheirdistributionnetworks.Digitalpaymentcompanies have a significantly larger reach and customer market than digital health companies and can bundle telemedicine and epharmacyservicesontotheirpaymentplatforms.

Digital Financial Services Archetypes

Healthdeliverychannelshelplinkkeydigitalenablerstodigital financial services. We have defined four main archetypes of innovative health financing solutions that can be offered to unbankedorunderbankedconsumersusingtechnology:digital health savings, digital lending, crowdfunding, and insurtech. These financing models are not mutually exclusive; the most practical and impactful models will combine two or more archetypes.

Service Archetype 1: Insurtech

Insurtech and digital insurance have expanded the ways in which people purchase insurance and the types of insurance available to them. Insurtech extends the reach of financial protection through underlying digital technologies (data analytics, blockchain, artificial intelligence) that are deployed for enhanced underwriting and risk assessment, claims management,improvedcustomerexperience,anddistribution.

Insurtech has also enabled a diversification of insurance offerings.Microinsurance offersanaffordablebut limitedform of financial protection to individuals who cannot afford traditional insurance and is typically offered as an add-on to other financial transactions or services. Companies like Digital Healthcare Solutions (DHS) in Bangladesh are offering microinsurance to Grameenphone subscribers in Bangladesh, whiletheVietnamWomen’sUnionofferscredit-lifeinsuranceto itsmembers.21

Defined group models provide insurance to small groups of people, such as family units, rather than individuals. PolicyBazaar22 inIndiafeaturesseveralfamilyhealthinsurance plansthatcoverchildren,parents,andgrandparentsforhospital fees and give discounts on products and services, all for one premium. Withlargeunbankedpopulations,agrowingmiddleclass,anda traditionally low penetration of private insurance in China, India, and parts of Southeast Asia, there are enormous opportunitiesfortheapplicationofinsurtechtoaddressthelow levelsoffinancialprotectionintheregion.AstudybySwissRe estimatesthat by2029, the Asia Pacific region will account for 42%oftheglobalinsurancepremium,andChinawillbecomethe largestinsurancemarketbymid-2030.23

Service Archetype 2: Crowdfunding

Crowdfunding has grown as a financial model that pools donations from many people to fund individual causes, enterprises,andprojectsthroughcommunitycampaigns,either through direct donations or through mutual aid programs that provide a degree of financial protection for catastrophic care. Crowdfundingplatforms,suchasGive.Asia,relyondonationsto

coverlargehospitalbillsortreatmentcoststhatafamilycannot afford.Whileperhapsnoothermodelpointstosystemicfailures morethandonation-basedcrowdfunding,whichtellsstoriesof individuals and families facing extraordinary healthcare expensesandheart-rendingcircumstances,theyarestillahealth financingband-aidwhennootherimmediatesolutionsexist. Crowdfunding platforms provide a direct wayfor beneficiaries toletpeopleintheirnetworkandbeyondknowabouttheirneed forfinancialassistancewhilealsogivingthebroaderpopulation the ability to donate charitable funds. In China, the crowdfunding model has expanded to provide additional basic financialprotectionthroughmutualaidplatforms,whichcollect verysmallamountsofmoneyperperson(e.g.,10RMBor$1.30 permonth)fromaverylargepopulationtowardsafundthatits members can draw upon in the event of a catastrophic health event.

This model incentivizes people to pay for financial protection throughmicro-contributionsthatarefarlowerthantraditional insurancepremiums.AccordingtotheResearchInstituteofAnt Financial’s“OnlineMutualAidWhitePaper,”mutualaidinChina isprojectedtocover450millionpeople,almostone-thirdofits population, by 2025.24 These programs expanded in 2020 to startofferinginsuranceprogramssuchasShuidibao(Figure10), showingthatmutualaidcanbeasteppingstonetofullfinancial protection.

Figure 10. Case study 1: Shuidi, An Integrated Donations, Mutual Aid, and Insurance Model

Service Archetype 3: Digital savings

Adigitalversionofatraditionalsavingsaccount,digitalsavings accountsare afeaturethat most largebanksaroundtheworld nowoffer.Digitalsavingsaccountshaveseveraladvantagesover traditional savings accounts, including easy access to one’s savings when and where a person needs them. Importantly, digitalsavingsarenowbeingprovidedtovulnerablesectionsof society such as informal and low-wage workers, women, and marginalized groups who were previously excluded from or unabletousetraditionalbankingservices. One of the most well-known examples of the use of digital savingsforhealthistheM-TIBAinitiativebyCarePay,whichwas createdasajointventurebetweenPharmAccessandthemobile network operator, Safaricom in Kenya. M-TIBA conveniently helpspeoplesavesmallamountsofmoneyforanticipatedhealth expensessuchasmaternitycareorelectivesurgery.

TheM-TIBAmodelisnowthegoldstandardforblendedpublic and private financing. Subscribers can save, send, and receive funds for medical treatment through apps on their phones. Donors can send subsidies or vouchers to beneficiaries. Subscribers can pay for medical treatment at any M-TIBAapprovedhealthcareproviderandclinicusingtheirphonesand canusefundstopaypremiumsforregisteredhealthinsurance policies.25 In India, AffordPlan offers mobile health savings accounts (mHSAs)andpatient-centeredcommunicationtoolsthatenable integrated care and address challenges linked to high out-ofpocketpaymentsandlow-qualityservices. Figure 11. Case study 2: AffordPlan, An Online Platform to Help People Save for Healthcare

Service Archetype 4: Digital Lending

Digital lending offers credit through digital platforms and, combined with alternative risk scoring technology, provides affordable loans to someone without a credit history. Lending services can be provided by a single company, like Arogya