Uber and Airbnb have long been the flagships of the sharing economy. Entrepreneurs in other parts of society are also trying to meet demand with unused assets and services. HDa startup from Bangkok, applies the economic model to healthcare in Southeast Asia.
HD operates a platform that helps three parties meet: surgeons with their own practice, patients who want to have their operations performed cheaper and vacant operating rooms in hospitals. The model may sound a bit counterintuitive to people in the West, but Southeast Asia’s medical system is based on very different patient-hospital dynamics.
Sheji Ho, co-founder and CEO of HD, got the idea when he saw surgeons in Thailand advertising on Facebook to attract private clients. Dual practice is “very common” for physicians in Southeast Asia, noted Ho, who previously co-founded the Southeast Asian e-commerce enabler aCommerce.
“They get the qualification by working for top hospitals, but they are poorly paid, so they also work at private hospitals where they get the money,” he says in an interview.
In Southeast Asia, people go straight to the hospital when they get sick. The problem with public hospitals, Ho thinks, is that they have very long queues, so doctors try to lure patients into the private institutions where they work. “Doctors [in the region] are like sellers who operate on different platforms,” he says.
Forty percent of healthcare expenditure in Southeast Asia was paid out of pocket in 2018, according to the World Health Organization, compared to 29.8% in Europe and 32.4% in America. Because there is no central platform that offers cost transparency, patients often pay a high price.
When the COVID-19 pandemic broke out, large surgeons’ rooms suddenly became vacant as Thailand, a popular medical tourism destination, lost international patients. The oversupply was exacerbated by hospital construction in the country before the pandemic, Ho noted, as the government gambles on an aging population and higher land values.
“Of course hospitals wanted to use our platforms,” says Ho. And since HD brings customers to them, it can negotiate lower room rates. Patients undergoing surgeries such as thyroid, hemorrhoid and orthopedic surgery through HD pay 15-20% less than market prices.
Why not provide a meeting place for all these needs? That’s why HD launched its HDcare private-label surgery service two months ago. The platform is now on a roster of more than 20 operating rooms in Thailand and Indonesia, according to Ho, with the potential to access more of the 1,500 healthcare providers already on the platform, and has more than 40 types of surgeries lined up . The plan is to scale the service to 200 operations per quarter by Q4 2023.
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Amazon for health services
HD’s surgery platform is a new addition to the established company, a marketplace for outpatient services. The model has proven successful in the huge healthcare market in neighboring China, where JD.com, Alibaba’s domestic arch-rival, runs a similar e-commerce operation that sells third-party healthcare services such as vaccinations, checkups, imaging sessions and minor surgeries.
The absence of primary care in Southeast Asia means people have to ask their friends for recommendations or do several hospital hops before getting to the right doctor and treatment.
That’s a contrast to the US, true 75% of adults had a GP as of 2015 to treat common conditions and are only referred to hospitals for urgent and specialized treatment.
Like Airbnb, HD began to onboard hospitals and clinics through a lot of heavy lifting, such as helping customers set up their product pages. “But that’s also our moat,” says Ho. “SaaS is too early for Southeast Asia.”
HD takes a portion from transactions and charges a listing fee from healthcare providers, similar to how a conventional e-commerce platform makes money. It also provides healthcare marketing solutions to providers on its platform, similar to how Amazon Ads and Tmall Ads empower brands to increase reach and performance.
Platform operator liability is an ongoing debate in the tech industry, and a company that can affect someone’s health seems to make matters even more tricky. As a marketplace platform, HD generally does not handle disputes; in the beauty space where the experience can be more “subjective,” HD takes an approach similar to Amazon’s, where it “puts patients first, refunds customers, and deals directly with the providers,” says the founder.
“In general, HD prioritizes minimally invasive, short-stay, elective surgeries with low output variation, such as thyroid and hemorrhoid surgery, in addition to outpatient procedures.”
Since its inception four years ago, HD has helped about 250,000 patients. It saw 7x revenue growth during the pandemic and aims to maintain its growth rate at 2-3x growth in the post-COVID years.
Optimism in recession
While the pandemic is take a toll on the global economy, Ho is optimistic about his own venture. “Whenever a recession started, we saw some companies take off. They took advantage of oversupply. Groupon took advantage of the excess supply of restaurants, and for Airbnb, that was vacant properties,” he suggests.
“So as we enter the recession there are plenty of opportunities – hospitals are sitting on surplus rooms. We have two to three years to grow that part of the business quickly.”
Despite the encouraging signs of growth, HD’s fundraising got off to a rocky start. As the pandemic swept the globe, investors turned to telemedicine startups as the go-to healthcare solution. Ho disagrees with the conjecture.
“Telehealth works well in the Western market. Basically you talk to the doctor [general physician]you get a prescription and you go to Walgreens to get your antibodies, which need a prescription,” he says.
“But in Thailand, Indonesia and Vietnam you can get that kind of medicine at pharmacies [over the counter]which eliminates the need for telecare.”
Investors are now waking up to the potential of HD, allowing offline medical providers to use digital platforms instead of competing with them. The startup recently closed a $6 million funding round from Partech Partners, M Venture Partners, AC Ventures, iSeed and Orvel Ventures. It’s also part of a recent batch accepted into Google’s Southeast Asia program for Startups Accelerator.