Health care transaction costs: lessons from India’s biometrics program

Over 1 billion Indians’ fingerprints are held in their government’s Aadhaar system. The biometric system quickly and cheaply verifies a citizen’s identity for government services and payments. The system is also open for companies in India to use for their own identity checks.

The economics of Aadhaar have useful lessons for understanding the value of patient-controlled infrastructure.

Without Aadhaar, getting and validating client identification data cost around $22.50 (1,500 rupees). The cost is the same for each transaction, whether it’s  adding a driver to a ride-hailing platform or accepting a new mutual-fund customer. Aadhaar reduces this cost to $0.15 (10 rupees). The Economist magazine explains the significance:

Bringing down the cost can vastly expand a firm’s target market. If a lending outfit, for example, can afford to spend only 0.5% of the value of a loan on such tasks, its smallest credit will be 300,000 rupees, an amount which will limit it to the richest 15m Indians. [At] 10 rupees […] you can viably lend to over 500m people.

Getting and validating a patient’s health care data is more expensive still. Much of a clinician’s time with a patient is spent doing this, and clinicians’ time is much of health care spending.

Which is why PKB’s single record is so important. Organisations send data about a patient and all the data end up in a single record in PKB: structured, validated, real-time, accurate data. A test result in PKB directly from a laboratory means the physician does not need to order a new test. Seeing the patient already has an appointment booked with the hospital specialist means the GP does not have to chase down a follow up. Having the latest medications from the GP means the emergency staff do not have to ask the patient or hedge against the patient’s memory.

PKB makes these transactions instant and free, so health care delivery can leap ahead. And innovation becomes possible with new services at far lower costs reaching far more patients.

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