Climbing India’s Technology Stack: As the Fintech Revolution Extends to Health Care, Will Emerging Markets Be Ready?
Chances are you’ve used a technology stack today without even realizing it.
Technology stacks are ubiquitous and include, for example, Uber, Dropbox, Pinterest, Yelp and Spotify. As its name suggests, a technology stack is a set of software components, programming languages and integrating interfaces (called application program interfaces, or APIs) that together comprise a complete and integrated platform (often an operating system) for running services or applications. Each layer builds onto the features of other layers, thereby creating a stack. Stacks have front-ends and back ends. The back ends are crucial, of course, but end users see and interact with the stack using only the front-end interface, often through a web browser or a mobile app. Other applications may also “run on top” of the platform, but to the end user they all come together in a seamless service.
Arguably many of the most promising technology stacks arise in financial tech, or fintech, which supports or enables banking and financial services. In its early days (just a few years ago), fintech was employed mostly by banks and other financial institutions to shore up the back ends of their businesses. Increasingly, though, fintech is disrupting all aspects of financial services, beginning with mobile payments, money transfers and loans, but soon extending to most aspects of business and commerce.
Among the many stunning aspects of fintech is its remarkably small scale, among both innovators and adopters, with financial disintermediation a critical competitive advantage of many successful fintech firms. Disintermediation involves taking one or a very narrow set of financial services, unbundling them from the hundreds of other services that banks have historically offered, and supplying just those narrow services to customers.
In just the past few years, thousands of fintech startups, nearly all small and agile at the outset, have sought to cherry pick specific aspects of these banks’ services (i.e., disintermediating); and in many cases they are turning their simple innovations into viable businesses. Collectively, these relatively small fintech startups suddenly pose an existential threat to the world’s banking behemoths.
There is reason to believe the same phenomenon is taking shape within global health care.
As one example, I recently had the opportunity to meet with the owner of a small Senegalese startup that works with that country’s banks and private health insurers to provide clinics, hospitals and other health care providers throughout Senegal with individual patients’ proof of insurance and credit scores. This startup requires little up-front capital and will take perhaps three years from conception to go live. At the outset, it will not extend credit, guarantee payment, process claims, or even offer up a vehicle for patients to make mobile payments. It takes on two modest tasks and nothing more. Yet the service has value to health care providers because it allows them to schedule patients for appointments at a later date, knowing that they have the means to pay for that care once they arrive. The value is modest, of course, but it can be monetized so that the enterprise is soon viable; and as it grows and matures the business can add other services and functionality.
The India Stack
This nascent revolution portends more than a legion of small startups. In India it is also advancing at scale through a bold initiative called the “India Stack.” The foundation of the India Stack is Aadhaar, which provides a free, unique 12-digit number for every resident of India. To enroll in Aadhaar, each resident provides their name, date of birth, age, gender, address, and (optionally) mobile phone number and email, along with biometric information (facial photo, ten fingerprints and two iris scans). The 12-digit number is then used online as reliable proof of identity and proof of address.
Aadhaar is very new. But since online verification began roughly five years ago, more than 99 percent of Indians aged 18 and above have enrolled. Using Aadhaar, the India Stack and their smartphones, India residents can today use e-signature protocols to transact online, open online bank accounts, utilize digital document lockers to replace paper, make mobile payments, apply for credit, send and receive invoices, enjoy encrypted data-sharing, and tap into various other digital financial services in a comprehensive and ultra low-cost financial ecosystem. Private parties can use the India Stack as a platform to write software and build businesses faster and more simply than even just a few short months ago. Governments can target taxes more effectively; and they can more directly, cheaply and reliably subsidize fertilizer, fuel, food, health care, and other goods and services for those most in need.
Even by itself, Aadhaar is a profoundly important breakthrough for social and financial inclusion – for fast and costless online identity authentication – and it opens up many opportunities to transform health care in India, especially for its poorest residents.
Fintech WIll Speak Volumes for Health Care Commodities – are we Ready to Hear It?
If India’s emerging status quo foreshadows what will likely unfold in most other low- and middle-income countries (LMICs) over a modestly longer time horizon, it is appropriate for those who work in global health to begin asking about the implications that fintech and other digital innovations will have for health care.
So how will fintech change the ways that we already do business? There are at least a few clear answers that point directly to urgent action items.
It seems clear that once Aadhaar and other tools make online identity and address authentications fast and costless throughout LMICs, their use in even the simplest business transactions will become ubiquitous and routine. In health care this means, for example, that whether or not patients pay for their medications at the time and point of dispensation, the encounter will be recorded with a simple bar code scan in all of its relevant details. These details will all auto-populate and include the identity of the prescribing professional, the name and location of the dispensary (i.e., the pick-up point), the date and time, dosage, wholesale and retail cost, and dozens of additional fields. These fields, in turn, will flow to the cloud and thereby link up to many other information systems (e.g., master facility lists, human resource information systems, and geographic information systems).
Abruptly, clearly, very soon, and at great scale we will surely see systemic problems with how medications in many LMICs are dispensed. We can reliably anticipate these problems because they are systematic even in high-income countries with their highly trained workforces, knowledgeable patients, well-resourced and mature supply chains, and decades-old health information systems. These problems include, for example, medication errors, non-standardized treatment guidelines, incomplete documentation, poor medicine administration, lack of compliance, drug interactions, and polypharmacy more generally. Common sense tells us that as intractable as these problems are in highly advanced and well-resourced supply chains and health systems, they may add up to a (so far largely hidden) debacle in LMICs.
Once these problems come to light, it is implausible they can remain unaddressed for even a short time. Donor organizations and in-country governments cannot operate supply chains to minimize stock-outs on dispensary shelves and having done so declare success. If the medicines dispensed from those shelves go to the wrong patients, or at the wrong times for the wrong conditions, the adverse consequences are huge. They cannot be ignored and they cannot be separated from the supply chains that stock them on dispensary shelves.
We cannot know for sure, of course, but we can reasonably expect that clear visibility to each and every individual patient encounter will persuade those who design and operate supply chains to attend to all of these details. That means following through to document that each parcel is prescribed by a licensed medical professional for just the right condition(s), and thereafter delivered and dispensed reliably and consistently to the right patient at the right pick-up point. The obvious means to ensure this is through direct delivery, even if there are other means to achieve these same ends.
As the global health community prioritizes investments in health information systems and makes plans to join many different health-related data assets, it is imperative to factor into planning those innovations that are coming from outside health care. The pace of change is accelerating. New and exciting opportunities abound, but those of us who work in this field must remain mindful that many of these changes will come from outside of our own IT domains and massively disrupt the ways that we have long operated. There will be remediation that goes along with innovation.
David Butz is Vice President of the Healthcare Initiative at the William Davidson Institute. He is also adjunct lecturer of Business Administration at the University of Michigan’s Ross School of Business.
Photo: Conducting an iris scan at a biometric data collection camp as part of the Aadhaar project of the Unique Identification Authority of India. Credit: Biswarup Ganguly.