A conversation with Loop
If there is one thing the Covid-19 pandemic brought into sharp relief it was the need for good health insurance. As someone who has lived in both India and the US, the room for improvement when it comes to health insurance in India has been very obvious to me. When I worked in India, even though I had a group insurance via work, navigating health insurance claims was a nightmare. That’s one reason Loop’s mission to revolutionize the way health insurance coverage works has seemed to me to hold so much promise. Loop offers group health insurance plans from well-known insurers to businesses ranging from startups to large enterprises, together with a virtual primary care experience provided by an in-house medical team and a network of other service providers. By coupling insurance and primary care, Loop aims to realign incentives in India’s healthcare system. To better understand Loop’s journey and what’s next for the company I spoke with founders Mayank Kale and Amrit Singh.
Vedica: To get started, let me start from the very beginning - how did the idea of Loop come about?
Mayank: I, and actually the other co-founders as well, Amrit, Ryan and Shami all kind of arrived at the idea because of personal interests in healthcare and our desire to make healthcare better. We all have had experiences with our family members in the past that have been full of friction in terms of navigating the healthcare system. A lot of that friction and discontent with healthcare was caused by the quality of healthcare that we received personally or that family members have received.
My dad had a heart attack when I was at university and as the only son I traveled back to India and had to navigate the whole thing myself. I saw how broken the whole experience was. This could have been totally prevented with really good primary care. He was prescribed a surgery that we later found out he didn't need. At the time, I didn't know what a second opinion was. We were just taking the doctor's advice and going through it. It took him a long time to recover from surgery and there was no real support. And so they basically charged as much as they could. The whole experience made me really try to figure out why things were so bad. I ended up realizing that doctors and hospitals make more money the sicker someone is. In this kind of fee for service model that is based on volume of care doctors have revenue targets based on how many MRIs they prescribe, how many surgeries they prescribe and the blood tests that they do. That's really messed up because that is not really aligned with what patients want. You would want the doctors and hospital to be aligned to better outcomes. So that got me thinking - what is the best configuration so that the doctors and care providers are on the same side of the patient? That's where the obsession with managed care or value-based care started.
Amrit: The interesting thing here is that there is one kind of organization in the market that does want you to stay healthy. And that is your health insurance company. That's typically not a lens that most people take to their health insurance plans. If you go to a company and you ask if they have a group insurance plan, most people will say, yeah, I think the company has bought insurance for me. If you ask them who their insurance provider is, they have no idea. Because it's not something you want to think about until the day you use it. Insurance in general, in the market has largely been a push product and it's quite nascent in India. But fundamentally we see it as an important tool for financial protection. So if you bring these two things together - if you take the insurer model and allow them to provide care for the people they insure you're creating a system that's now incentivized to deliver great preventative and primary care. And that's essentially what we are - the first integrated payer provider in the country.
If you look at how Loop operates right now, we have a B2B sales motion, we sell health benefits to companies, we have bundled both insurance and care and got a lot of competency around providing really great care to people. We built an in-house medical team with ~35 doctors to care for the ~1.5 lakh lives we have insured. That's how we arrived at this model and why we care about the unique combination of these two things.
Vedica: The Loop co-founders met in the US - what was it about the Indian market that you felt was attractive or what was the gap you saw there that made you kind of want to attack that opportunity?
Amrit: I guess I'll say two things. One is a bit more emotional - it's that we all had family members and roots here. So we felt that connection. And having experienced really crappy healthcare in many ways, ourselves knew that there was a lot to improve on. But the second thing is that the opportunity in the market was a lot bigger compared to the US. The difference in the quality of care was massive. In the US actually a lot of people do receive high-quality care. It's expensive, but they have access to telemedicine and they have access to a great GP. A lot of folks in India, don’t. If you look at the number of GPs in India that are active, there's 1.3 million registered GPs in India, but only 20% of them practice allopathic care. So, the delta and care we could bring was much higher in India. In addition, in the US regulations prevent you from moving quickly in healthcare. You need state-by-state licenses to practice, you need to follow HIPAA rules etc. At a seed round, as a healthcare founder in the US you're going to spend a third of your seed round on a legal team. And so for us to be able to move quickly and to build the things that we imagined would be an amazing customer experience, we felt that India was really the best market to do that.
Vedica: You're obviously going at it from a B2B perspective. Say, if I’m a company and am looking to provide some kind of group health insurance for my employees, what does that interaction with Loop look like for me? Why would I, or why should I choose Loop over other providers out there when it comes to health insurance?
Mayank: It's the HR of companies that buy insurance. And the biggest companies have been buying insurance from legacy brokers, like Marsh, Aon Global, etc. An average company spends 50 lakh rupees on health insurance. It's one of the biggest expenses that they have as a company and often they look at it at the end of the year, they see 5%, 6% of their employees use this benefit. And 95% of the employees don't even know the name of the insurance company. So it can really feel like they're not getting value for their money.
And even the experience that employees have is often just awful. You really don't have a great digital experience for claims and so on and so forth. So when Loop comes in, the real value we provide is that you buy health benefits, health insurance from us, and you get free unlimited in healthcare on top. Often 95% of employees don't need to go to the hospital, but they do need primary care doctors, especially now during COVID. We provide free unlimited primary healthcare that allows you to text your doctors and the get responses 24x7. And you can consult with the top 10 specialties as many times as you want throughout the year. That really helps HR provide a health benefit that is actually useful to employees. Usually doctor consults and OPD are not covered under plans, but we ended up covering them. And so by the end of the year, 40 - 50% of the company starts finding value in the health insurance. It's an experience that completely changes how employees are interacting with care system. That's all core reasons that HR folks switch from older brokers to Loop, because they just see that this is obviously more useful and can really help employees.
Vedica: Can you speak more about how being an integrated health care provider works both from the doctor and insurance angles?
Mayank: I can quickly chat about the doctor's side - there’s a lot of talk about the dearth of doctors in India, which is a bit of a false statistic in the sense that if you take the population of the country and how many doctors we have, it does look like that. But if you look at where doctors are aggregated its mostly in major cities. So, doctors often don't have that much utilization unless they are a super specialist. Most primary care, even secondary care providers are not nearly at capacity. What we basically did is hire doctors - we give them a better salary, that's more consistent than running their practice. They work from home and they can consult virtually. And they also get 20 minutes per patient, not three minutes that they're used to practicing because we have a different kind of payment model. That really attracts the best kind of doctors to come and work with us on the primary care level. And if someone needs to go to an endocrinologist or a cardiologist, depending on the city they're in, we refer them out to those specialists.
Amrit: On the insurance side - we work with insurers to get quotes. I don't know if you know how the broking process works, but essentially we have to float an RFQ out from a company to insurers and then insurers decide if they want to take on the risk. And the way they do that today is that they look at every company we send them. They usually look at two or three factors - the number of people in the pool, average age and then they look at the split of gender, male, female. That's all they use to underwrite today, which is remarkably primitive from an underwriting standpoint. There's nothing preventing them from underwriting on more information - they actually just don't have more data to underwrite on. And so you can imagine the room for error there. If they don't know exactly how many, let's say diabetics are there in a population, it's very, very hard for them to underwrite the risk properly. What we're doing today is working with the insurance companies to show them that we can actually keep people healthy or use our preventative care to reduce claims. And not just keep people healthy, when they do get sick, make sure they get sent to the right hospital. So we do the routing part really, really well. And prove that these things can actually lower claims and create better outcomes and more profitable products for the insurance company. So that's step one in creating value.
The second thing is over time collecting the healthcare data so that we can start to underwrite these ourselves. And so there are certain populations or certain kinds of insurance products we would want to spin up. For example, top-ups. We discussed how HR decides which benefits to pick for the company. And for some people it's enough coverage, but for others its not. For example, if I want to be able to add on more and more coverage and be able to do that in a really simple way, it’s not easy today. So we have designed top-up plans to be able to give people the coverage they want. It's effectively like a slider scale.
We can create these new kinds of products because we have access to healthcare data, and we're pretty informed as to where there's risk that's worth taking and not worth taking. So we can selectively, over time, pick up and add these more customized, personalized insurance products that we can bundle in with the group health insurance plan. And maybe one day we can also provide the group health insurance plan. So that's where we're headed in the long run.
Vedica: And what’s the immediate plan for 2022?
Mayank: We want to grow our customer base four or five X this year. We have seen a lot of product success in our primary care product, where people keep coming back to get care for themselves and their family members. One third of the consults are for the employees. One third are for their kids and one-third for their parents. And so we're seeing this affinity towards our primary care, experience and doctors. We want to double down on that and basically see how we can bring it even closer to our members. Building offline networks to make sure that there's continuity of care, building a better diagnostics experience around primary care, etc.
Apart from this, we're also launching some disease-specific products. If you have diabetes, if you have hypertension, how can our doctors continue to help you across the year and not just through consults? Ideally we can help you in type two diabetes or can help you control your blood pressure and so on and so forth.
Vedica: How would you say you are differentiated from even other startups who are tackling the space, and tackling the health insurance market in India?
Amrit: The first thing that's important to say is that this market doesn't seem like a winner take all market by any means. There are some markets where there's clear first mover advantage - it's winner take all - but in healthcare and insurance too, we tend to see oligopolies form. I would say for the folks that are in this space, who are also starting up, a lot of their approach seems to be very insurance first. It seems to be about taking insurance broking online. Policy Bazaar has been in the market for a decade, but they were never able to really crack the enterprise sales motion. The purchasing behavior is so different for an HR making decisions on health benefits than someone buying retail online. And so the incumbents like insurance brokers were fine. Fundamentally what we're doing is building a healthcare system and that's something different. We will only take customers in the three metros because we know we have to build so much more for these folks since we see them as patients. We know that to deliver great care experiences you need things like strong relationships with certain health systems and hospitals, with tertiary care providers, with diagnostic providers, with medicine providers. And so there are these very local competitive dynamics that get built up over time.
What we have done is we have mapped the entire customer journey in healthcare. And we said, okay, the moment you feel sick you'll probably want to be able to text or call a doctor. And so that's the first thing we built. And then as you get more sick, let's say, you end up going to labs and seeing specialists, and then maybe at the end of your healthcare journey, ending up at the hospital and using insurance. And so we provide that insurance as well and help you get to the right hospital and use the right insurance card for the right treatment. We have virtual care at the very beginning and we have insurance for when things get really bad. And now we're building products and services that fill out things that you would need along the way. That's very, very different. We hope that what that looks like is, if you're in Bangalore or Mumbai and you get insured on a Loop plan, you have access to free unlimited primary care, but that also means you can walk into a Loop clinic and get free care, and you can get discounts with our lab partners and you can get medicines delivered to your home through one of our tie-ups and, and that's discounted too. In addition, you have really high quality specialists you can go and see. Your Loop doctor is checking in on you proactively because they know what your condition is. They have a plan to help you manage that condition and they can proactively recommend when you go to see a certain kind of doctor when, whether or not you're following a prescription or a diet, a plan for a lifestyle change.
Vedica: How do the big hospital networks fit into the landscape given what you are trying to do. Do you see yourselves competing with them further down the road or partnering with them? How does that relationship work currently and how do you see that evolving?
Amrit: What is really interesting is quality varies across even the reputed brands. People don’t really know who to trust in any market. Because we see all the claims, we get to see the cost per procedure, and we get to see readmissions over the year. So we get a sense for where there's high quality care and low quality care. It's really, really important that we pick the right hospital partners, because it allows us to direct people to the right care. One in three people before they claim will ask their Loop medical advisor or a doctor about where they should go. And we're fortunate enough to know what's in their policy, and so we know exactly where we can send them and where they're going to get the best care. That relationship is incredibly important and will only get stronger. So we do see hospitals as a partner.
On competing with hospitals — we joke about the thesis here being that if we're going to build everything from the moment you feel sick, that first symptom to when you use your insurance Loop may find itself building a hospital. It would be strategically aligned, but very, very difficult to do. So for the next decade or for a long time, it's probably going to be a really, really great relationship we build with healthcare systems and hospitals. And we'll really want to invest in choosing the best providers to be in our own network.
We know that insurers have created their own hospital networks - there are hospitals that are in network and out of network. We're building our own network on top of that, with the data we have access to that no one else has or uses effectively to really curate the list of the top five or top ten providers in any city. We have seen that when we recommend a provider, people are willing to travel an extra kilometer or an extra two kilometers down the road to go to the right provider, as opposed to just going to the closest one for a lot of their treatment.
Vedica: Finally, what are some of the more interesting healthcare trends that you are seeing right now?
Amrit: The willingness to start the care journey online. People in India are not afraid to use apps and the kind of behavior we have seen around payments is going to happen in healthcare over time. We have already seen it start - the willingness to start your care journey on your mobile phone and rely on a doctor over WhatsApp etc.
Mayank: On the employer side, employers are more and more mindful now of providing benefits to their employees than they were before. If an employer wants to succeed in their industry, they need the best talent or to get the best talent they have to one up each other on the benefits they offer. So, it's a great time to be building in the corporate benefits spaces.