There is a stark reality that India’s 1.2 billion citizens are beginning to grasp: Health care costs will continue to rise even as ‘miracle’ drugs ensure that people live longer. Exacerbated by low government expenditure, the private insurance premium market is expanding rapidly by about 30-35 percent every year, according to a 2014 healthcare report by PricewaterhouseCoopers.
It is in this backdrop that Medi Assist has emerged as one of the country’s biggest players in the more organised cashless insurance market, not as a policy provider, but a third party administrator (TPA). Its technology-driven, easy-to-use interface provides a platform where hospitals, patients and insurers can interact with each other and untangle the web of health-related claims.
Dr Vikram Chhatwal, director of Medi Assist, who previously worked with Reliance Health and Apollo Hospitals, says there is no escaping the need for specialised but affordable healthcare. “We spend half our lives off medication and half our lives on it.”
Medi Assist, which is licensed by India’s Insurance Regulatory and Development Authority, partners with insurance companies and through them reaches 4,000 corporate houses. It has the health of nine million people in its care, and charges an administrative fee for its service, paid either by the corporate or the insurance agency it works with.
What sets it apart from other TPAs is the range of services it offers: Claims administration and settlement, cashless hospitalisation, reimbursement, identification cards, hospital networks, pre-authorisation, pre-policy medical checks and specialised value-added services for corporate clients. Its revenue for the financial year ended 2014 was Rs 140 crore, and Chhatwal estimates a 40 percent jump by FY 2015.
The Men behind it
Medi Assist was the brainchild of Infosys co-founder NS Raghavan, who provided the seed fund in 2002 through his private investment firm, Nadathur Investments. B Madhavan, now CEO of Medi Assist, was one of its earliest members.
In 2006, Reliance Health, which is part of the Anil Dhirubhai Ambani Group, acquired Medi Assist. In 2011, the Medi Assist management, along with private equity group Bessemer Venture Partners, bought out both Reliance and the Nadathur Group’s stake in the firm. When the deal was done, Chhatwal, who was CEO of Reliance Health, quit his job to head Medi Assist.
The 45-year-old doctor studied medicine in both India and Singapore. At Reliance Health, he had been involved in setting up the Kokilaben Dhirubhai Ambani Hospital and Medical Research Institute. Prior to that, he was the CEO of Apollo Health Street and had a concurrent position as the CIO for the Apollo Group.
In 2013, IDFC became the second private equity player to invest in the company, with a Rs 85 crore funding. “We were looking for a first-generation promoter, who had the passion, and understood the business he wanted to grow,” says Satish Mandhana, chief investment officer of IDFC Alternatives, which identifies private equity investment opportunities.
(This story appears in the 25 July, 2014 issue of Forbes India. To visit our Archives, click here.)