By Enbasekar D
India’s healthcare sector is undergoing a transformative shift, fuelled by technological advancements, post-pandemic digital adoption, and a heightened focus on sustainable growth. At the heart of this transformation lies the concept of unit economics—understanding the cost incurred and revenue earned per unit of service, such as a consultation, test, or transaction. For Indian healthtech startups, mastering unit economics is crucial to balance growth with profitability.
The COVID-19 pandemic accelerated the adoption of digital health solutions, with telemedicine platforms like e-Sanjeevani serving over 36 crore patients through online consultations as of April 2025. This surge highlights the critical role of AI and emerging technologies in reshaping cost structures while maintaining care quality.
Understanding Unit Economics in Healthtech
Unit economics involves analysing the direct revenues and costs associated with a particular business model. In healthtech, this pertains to the cost of acquiring a patient, delivering a consultation, or processing a diagnostic test, against the revenue generated from these services. Achieving favourable unit economics ensures that startups can scale sustainably without excessive capital burn.
In digital healthcare models, favourable unit economics are achieved by optimising operational efficiencies, reducing customer acquisition costs, and enhancing patient lifetime value. For instance, leveraging AI for diagnostics can reduce the need for multiple consultations, thereby lowering costs and improving patient satisfaction.
Why Strong Unit Economics Matter in Indian Healthcare Startups
India’s healthcare system faces challenges like cost sensitivity, a vast population, and the need to deliver affordable yet quality care at scale. Out-of-pocket expenditure (OOPE) remains significant. According to the latest National Health Accounts (NHA) Estimates for 2021–22, out-of-pocket expenditure accounts for 39.4% of India’s Total Health Expenditure (THE). While this marks a decline from previous years, the burden remains substantial, especially for those outside government health schemes. This financial burden emphasises the importance of startups achieving sustainable unit economics to offer cost-effective solutions.
Government initiatives like the Ayushman Bharat Digital Mission (ABDM) aim to create a robust digital ecosystem. As of February 2025, over 73.98 crore Ayushman Bharat Health Accounts (ABHA) have been created, linking more than 49.06 crore health records. Such integrations facilitate seamless data sharing, reducing redundancies and improving care coordination, thereby positively impacting unit economics.
Technology as a Catalyst for Operational Efficiency and Cost Optimisation
AI and technology play pivotal roles in reducing operational costs. Automation of backend processes, improved consultation flows, and streamlined organisational needs like customer support and supply chain management contribute to cost savings. AI, along with human-in-loop, enables handling millions of patients with consistent service quality; standardisation reduces variability in care, and personalisation enhances patient experience and outcomes.
Digital infrastructure reduces dependency on physical resources. For example, remote access to services through telemedicine platforms decreases the need for in-person visits. Additionally, automated insurance processing via platforms like the National Health Claims Exchange (NHCX) speeds up claims and lowers administrative costs, further improving unit economics.
Policy, Regulation, and Government Push for Tech-Driven Efficiency
Government policies are fostering a conducive environment for tech-driven efficiency. The Ayushman Bharat Digital Mission (ABDM) has registered over 3.63 lakh health facilities and more than 5.64 lakh healthcare professionals as of February 2025. The Unified Health Interface (UHI) facilitates the discovery and delivery of health services, streamlining healthcare interactions and improving service accessibility.
These policies indirectly support better unit economics through standardisation and data-sharing. For instance, the integration of telemedicine services under UHI reduces friction and operational costs for startups, enabling them to scale efficiently. Additionally, platforms like the Health Facility Registry and Healthcare Professional Registry are strengthening transparency and trust, further encouraging digital adoption among users and providers alike.
Building the Future of Healthcare, One Unit at a Time
AI and technology are not mere expenses but enablers of sustainable, inclusive healthcare. Indian startups are uniquely positioned to lead globally in frugal innovation. With the right mix of innovation, policy support, and AI integration, Indian healthtech can achieve impact at scale, sustainably.
By focusing on unit economics, startups can ensure that each unit of service delivered contributes positively to both the organisation’s bottom line and the nation’s health outcomes. This approach is essential for building a resilient, accessible, and efficient healthcare system for a Viksit Bharat.
(The author is the Co-founder and CTO, MediBuddy)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.