A number of young Indian companies that make specialised software and analytics for global healthcare providers are recording a sharp upswing in business as millions of uninsured Americans enroll in a new healthcare system.
These firms provide data analytics, create and manage healthcare exchanges, electronic health records and help process claims and sell insurance as the United States companies prepare to adopt the Patient Protection and Affordable Care Act, otherwise referred to as Obamacare after President Barack Obama, that comes into force on January 1, 2014.
Chennai-based Scio Analytics, Noida’s hCentive, which designs insurance policies, and cloud technology provider SmartRx are some of the firms gaining new customers from investors.
“We earn revenues by giving our clients a fishing rod or teaching them how to fish and sometimes catching the fish ourselves,” said Siva Namasivayam, chief executive of SCIO Health Analytics. The five-year old company provides insights to insurance firms that helps cut costs and tailor products according to the needs of the consumers.
Scio, co-founded by Namasivayam with a former colleague Krishna Kottapalli and a batch mate from the National Institute of Technology in Trichy, Karthik Krishnaswami, has recorded a nearly four-fold increase in revenue and aims to earn 300 crore this fiscal, as demand for its services grows rapidly.
These emerging ventures are looking to gain a toehold in the global healthcare benefits outsourcing market estimated at $5.4 billion (about Rs 29,000 crore) annually, according to offshore advisory firm Everest Group.
“Healthcare is the next Y2K problem in the US,” said Ramesh Babu, a cardiologist who is now a venture partner with the Ventureast Tenet Fund. In April, the fund invested seed capital of Rs 2.7 crore in Bangalore-based SmartRX, which helps doctors implement a patient monitoring system. “Due to Obamacare, we are expecting a ten-fold growth in our business,” said Anil Kumar, founder of SmartRx and an engineer from the University of Mysore.
Experts said while IT services companies including Cognizant, Infosys, TCS and WiproBSE 1.42 % are also eyeing these opportunities, small firms are stealing a march. “Large IT services players are providing raw plumbing, but these young product companies are providing informatics which is intelligence,” said Ajit Singh, a partner at venture capital fund Artiman Ventures.
“Insurgents don’t have the inhibition of incumbents or large companies,” said Singh whose fund has invested in Gurgaon-based data analytics company Guavus.
With nearly 45 million Americans expected to pick the right health cover on specially designed healthcare exchanges, private healthcare providers competing to offer the best cover are looking for critical data analysis.