Health Care by Subscription in India

Despite great improvements in recent years, a lack of affordable, quality medical care remains a significant challenge in modern India.  Currently, India lags behind many other developing countries in providing healthcare.  Total yearly healthcare spending is $132 per capita in India, much lower than that in other developing nations ($379 per capita in China, and $1028 in Brazil).  Healthcare access is especially constrained in rural areas; 60% of those living in rural areas needing to travel greater than 5km (3 miles) just to reach a healthcare facility.  Rural Indians have access to only 30% of the nation’s hospital beds, despite making up more than 65% of India’s population.  Healthcare issues, in combination with other social challenges, can have dramatic effects; Indian life expectancies at birth are lower than in many other countries, with India ranking 163rd out of 223 nations.

Another obstacle in Indian medical services, along with limited access, is the cost of care. Only 15% of Indian patients have health insurance of any kind, and over 60% of consumer healthcare spending is out-of-pocket.  Public healthcare spending is very low, with India ranking 171st out of 175 nations.  For the more affluent, private clinics fill this gap, but with much higher treatment costs.  Low-income Indian patients with chronic conditions have to pay 44% of their monthly income on average per treatment at private clinics, verses 23% for public clinics.  The high expense of healthcare keeps many from receiving the regular checkups and preventative care required to prevent illness.

Sevamob1A company in northern India may offer a solution to this problem.  Sevamob is a for-profit venture offering affordable healthcare services.  Sevamob is focused on low-income communities with limited access to traditional medical care. The company offers customers preventative care and regular checkups delivered to their doorstep, for a monthly subscription fee of $1.60 (Rs 100) per month.  This care is delivered by mobile clinics, which are supported by a network of specialists and hospitals.  These clinics rely heavily on mobile technology, using cloud-based storage for patient medical records, and provide a 24/7 call center and help line for subscribers.  For many of its new customers, Sevamob is the first to provide them with documented medical records.

In addition to care, Sevamob also provides affordable insurance coverage. For an additional payment of 80 cents (Rs 50) per month, subscribers can opt for a basic insurance plan, which covers up to $800 (Rs. 50,000) of hospital expenses in case of emergency or other advanced care.  This service is important, as few low-income individuals have sufficient savings to pay for emergencies, and also provides an incentive for healthy individuals to enroll in the program.

Sevamob’s focus on technology is driven by its founder, Shelley Saxena.  After graduating with an engineering degree from the Indian Institute of Technology at Roorkee, he has worked as a product manager, IT consultant, and developer for IBM, and holds three patents. Shelley received his MBA from the Johnson School at Cornell, and then co-founded another cloud-based mobile startup in the United States.  This company called Saasmob, is based in Atlanta, and provided advice and information to American farmers, along with app development tools.

Saasmob’s cloud-based business model provided the inspiration for Sevamob. A survey taken around the city of Lucknow, in northern India, highlighted the market need for low-cost, easy-access healthcare and led to the launch of Sevamob in 2011. The company used rapid advances in mobile technology to bypass much of the expensive physical infrastructure that drives up the cost of healthcare.  Initially, the company focused on rural areas with limited access to healthcare, but soon found a great demand for cheaper care in urban areas as well.  Urban customers have higher subscription rates than those in rural areas and often higher incomes which may result in a mix of low and moderate incomes among its customers, rather than a focus exclusively on the working poor.

Sevamob2Initially, Sevamob was bootstrapped using profits from SaasMob, the earlier venture.  However, as Sevamob continued to grow, it became clear that the company needed more capital.  Shelley obtained a $50,000 convertible loan from Village Capital, a non-profit organization which focuses on accelerating the development of social enterprises both in the US and in developing countries.  Since then, Sevamob has shown significant growth.  Its service currently has 3,000 subscribers, 1000 of whom were added between October and December 2013, and boasts a greater than 80% monthly subscriber retention rate.  Sevamob currently has 15 employees and had sales of $10,500 (Rs. 650,000) in its first year.  It expects that number to ramp up to $84,000 for the fiscal year which ends in March 2014.  While this number may seem low to audiences in the United States and Europe, these revenues are more reasonable in India given the difference in purchasing power, and especially the low costs of subscriptions.  Sevamob has also attracted great outside interest as well.  The organization was Bloomberg’s Social Business of the Year 2013 and a finalist in the Artha Venture Challenge, among other accolades.

Sevamob has also continued to expand beyond its initial model. It recently launched Seva Angels, an online matching site where young adults and elderly persons with low economic means can be sponsored by outside donations. The donors are then able to check up on the health of the persons sponsored.  Sevamob has also created Seva360, a matching site for medical specialists and low-means customers, where customers can find highly specific advice, treatment options, and discussion forums for their health issues.  Sevamob has moved past its individual subscriber format, offering group discounted rates to businesses and schools.

Sevamob’s business model may also have success in other parts of the developing world.  An organization in Liberia, West Africa, have been licensed to replicate Sevamob’s model.  However, Sevamob has plenty of room to grow locally as well.  The Indian state of Uttar Pradesh (UP), where Sevamob was initially launched, contains 200 million people. That is slightly less than the population of Brazil, and larger than that of Russia or Japan; if Uttar Pradesh was a country it would be the world’s 5th largest by population.

Like any start-up, there are risks inherent in Sevamob’s business model.  One significant risk is the cost of customer acquisition.  Sevamob is by design focused on populations that fall outside of the typical healthcare market.  This means that significant spending can be required to recruit new customers in return for relatively low payments.  Slow customer growth could delay Sevamob from becoming profitable and make capital-raising more difficult.  At the present time, Sevamob is raising a round of $250,000 of which about $100,000 has already been committed.  It expects to become profitable in mid-2016.  As with any new startup, the path to sustainable growth is not guaranteed, and the company will certainly have to overcome more hurdles as well as attract additional capital before becoming profitable.  However, Sevamob fulfills an important social need and has achieved rapid growth in a relatively short period of time. This may be an important company to watch.

For further information, contact Shelley Saxena by email to saxenas [at]

This post first appeared on MoneySpentWell.  It may be reproduced for non-commercial purposes with appropriate attribution.

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