Why Hospitals Are Targeting Health Insurance Buyers in India's Growing Market
In a strategic shift reshaping India's healthcare landscape, hospitals and startups are increasingly targeting health insurance buyers by combining medical coverage with treatment and care. This integrated model promises improved patient outcomes and lower premiums, capitalizing on a market expected to grow at a compound annual rate of 12.8% between 2024 and 2028, according to PwC.
The Rise of Integrated Healthcare and Insurance Models
Companies such as PB Health and Even Healthcare are betting that tighter control over care delivery can make insurance viable at scale. As India seeks to deepen health insurance adoption, these firms are merging treatment with coverage, addressing affordability concerns that often deter renewals. Non-life insurance premiums, including health coverage, are projected to grow at an annual average rate of 13–15% in the medium term, making cost-effective solutions crucial.
Ravi Vishwanath, director of Narayana Health Insurance, emphasizes, "The future of health insurance and care is where the provider is an active partner." Narayana Health launched its insurance business in 2024 as part of its integrated healthcare vertical. While this segment grew 90% year-on-year in Q2 of FY26, it currently contributes ₹190 million to the company's total revenue of ₹12,331 million, indicating significant growth potential.
Benefits of Integrated Plans Over Traditional Insurance
Unlike traditional health insurance, integrated plans offer outpatient department (OPD) services, leading to multiple advantages:
- Improved care as consumers visit hospitals only when seriously ill.
- Lower premiums due to preventive OPD services reducing illness frequency.
- Fewer claims, minimizing insurer payouts and enhancing sustainability.
Shruti Ladwa, partner and insurance leader at EY India, notes, "Advanced risk-prediction models, remote monitoring tools, and personalized clinical pathways will enable more proactive management of health risks and long-term care."
Key Players and Funding in the Integrated Healthcare Space
Narayana Health is not alone in this disruption. PB Fintech's founder Yashish Dahiya launched PB Health last year, raising $218 million in seed funding led by General Catalyst. Even Healthcare, a startup with total funding of $70 million from investors like Khosla Ventures, recently secured $20 million in January 2026 from Lachy Groom and Alpha Wave. Most funds will expand its integrated model through hiring and establishing more hospitals.
Mayank Banerjee, co-founder and CEO of Even Healthcare, states, "We're trying to ensure no one is more than five kilometres away from one of our hospitals." The startup, based in Bengaluru, plans to have six more hospitals operational by end-2026.
Challenges and Opportunities in India's Healthcare Market
Healthcare insurance penetration remains low, with only 29.8% of women and 33.3% of men aged 15–49 covered, per a Lancet study. Yet, it is the fastest-growing segment despite rising costs. Kosturi Ghosh, partner at Trilegal, explains, "The market is ripe for someone who can crack digital presence with regards to insurance, they will capture the market. This is because, at the end of the day, hospitals are recession-proof businesses, patients always come."
However, hurdles exist. Vishwanath highlights mutual mistrust between providers, insurers, and patients in traditional models. Ladwa points to technological barriers and urban-rural divides, with variations in hospital infrastructure limiting equitable access. Sunil Thakur, partner at Quadria Capital, adds that investors are cautious due to capital-intensive operations and strict regulations, though early-stage bets through ventures like HealthQuad show promise.
Investment Trends and Future Outlook
PB Health adopts a narrow-network strategy, offering fewer hospital choices but lower premiums and high care standards. Beams Fintech Fund is scouting for opportunities to back businesses embedding insurance into healthcare, with plans to invest up to $25 million across 10-12 companies. As the model gains traction in high-density metro areas, it could revolutionize how healthcare is delivered in India, making insurance more accessible and effective for millions.
