Uber and Airbnb have long been the flagships of the sharing economy. Entrepreneurs in other sectors of society are trying to balance demand with idle assets and services. HD, a Bangkok startup, is applying the economic model to healthcare in Southeast Asia.
HD operates a platform that helps three parties meet: surgeons with their own practices, patients who want to have their surgeries performed more cheaply, and free operating rooms in hospitals. The model may sound counterintuitive to Westerners, but Southeast Asia’s medical system is based on very different patient-hospital dynamics.
Sheji Ho, co-founder and CEO of HD, came up with the idea after seeing surgeons in Thailand advertising on Facebook to attract private customers. Dual practice is “very common” for doctors in Southeast Asia, noted Ho, who previously co-founded Southeast Asian e-commerce enabler aCommerce.
“They get the qualifications from working for top hospitals, but they’re badly paid, so they also work in 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 says, is long queues, which is why doctors try to lure patients into the private facilities where they work. “Doctors [in the region] are kind of like traders that operate on different platforms,” he says.
According to the World Health Organization, 40 percent of Southeast Asia’s healthcare spending was out-of-pocket in 2018, compared to 29.8 percent in Europe and 32.4 percent in the Americas. Since there is no central platform that offers cost transparency, patients often end up paying a high price.
When the COVID-19 pandemic hit, large numbers of surgeon rooms suddenly became vacant as Thailand, a popular medical tourism destination, lost international patients. The oversupply was exacerbated by the country’s pre-pandemic hospital construction, Ho noted, as the government bet on an aging population and rising land values.
“Obviously, hospitals wanted to use our platforms,” says Ho. And because HD brings customers to them, it can negotiate lower room rates. Patients receiving surgeries such as thyroid, hemorrhoid, and orthopedic surgeries for Huntington’s disease pay 15-20% less than market rates.
Why not provide a meeting point for all these needs? Therefore, two months ago, HD launched its private label surgical service, HDcare. According to Ho, the platform now has an offering of over 20 operating rooms across Thailand and Indonesia, with the potential to access more than 1,500 healthcare providers already on its platform and has more than 40 types of operations. The plan is to scale the service to 200 operations per quarter by Q4 2023.
Amazon for health services
HD’s surgery platform is a new addition to its established business, an outpatient services marketplace. The model has proven successful in the huge healthcare market in neighboring China, where JD.com, Alibaba’s domestic archrival, runs a similar e-commerce operation that sells third-party healthcare services like vaccinations, exams, imaging sessions and minor surgeries.
The lack of primary care in Southeast Asia means people either have to ask their friends for recommendations or make multiple rounds of hospitals before finding the right doctor and treatment.
This is in contrast to the US, where 75% of adults in 2015 had primary care physicians to treat common conditions and are only referred to hospitals for urgent and specialized care.
Like Airbnb, HD started onboarding hospitals and clinics by putting in a lot of effort, like helping customers set up their product pages. “But that’s also our moat,” says Ho. “SaaS is still too early for Southeast Asia.”
HD takes a cut of transactions and charges a listing fee from healthcare providers, much like how a traditional e-commerce platform makes money. It also offers healthcare marketing solutions to vendors on its platform, similar to how Amazon Ads and Tmall Ads allow brands to increase their reach and performance.
Platform operator liability is a perennial debate in the tech industry, and a deal that could affect one’s health seems to complicate matters further. As a marketplace platform, HD does not deal with disputes in general; In the beauty space, where the experience can be more “subjective,” HD takes a similar approach to Amazon’s, which “puts patients first, reimburses customers, and deals directly with vendors,” says the founder.
“In general, in addition to outpatient procedures, HD prioritizes minimally invasive, short-term, elective surgeries with little variation in performance, such as B. Thyroid and hemorrhoid surgeries.”
Since its inception four years ago, HD has treated around 250,000 patients. It has posted 7x revenue growth during the pandemic and aims to maintain its growth rate at 2-3x growth in the post-COVID years.
optimism in the recession
As the pandemic wreaks havoc on the global economy, Ho is optimistic about his own company. “Whenever a recession hit, we saw some companies take off. They took advantage of the oversupply. Groupon took advantage of the surplus supply of restaurants, and for Airbnb it was vacant apartments,” he suggests.
“So as we enter the recession there is plenty of opportunity – hospitals sitting on excess space. We have a two to three year window to rapidly grow this part of the business.”
Despite encouraging signs of growth, HD’s fundraising got off to a rocky start. As the pandemic swept across the world, investors turned to telemedicine startups as the go-to healthcare solution. Ho contradicts the assumption.
“Telemedicine works well in the western market. Basically you talk to your family 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 these drugs in pharmacies [over the counter]eliminating the need for telemedicine.”
Investors are now realizing the potential of HD, which enables offline medical providers to embrace digital platforms rather than compete 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 added to the Google for Startups Accelerator’s Southeast Asia program.