ET MSME Talks: Industry experts spotlight why healthcare is critical for ensuring MSME growth and building resilient MSMEs

“India has almost 50 to 60% of their medical expenses as out of pocket expenses compared to a global number of about 18%. And you can just imagine the kind of potential that we have in India today when it comes to health benefits. I think today not only insurance, but a well rounded healthcare benefit is what MSMEs are looking at” said Kulin Shah, Co-Founder Onsurity.

A healthy and secured workforce is the key to ensuring a robust and strong MSME ecosystem within the country. However, in the sector that comprises over 63 million micro, small and medium enterprises that employ around 111 million people across the country, 99% of the enterprises (especially the micro and small scale enterprises) struggle to provide basic healthcare benefits to their employees.

The Economictimes.com to discuss the issues concerning the criticality of healthcare in building resilient businesses, and ensuring availability of affordable healthcare solutions for a sector that is termed as the backbone of the Indian economy organised a panel discussion on the theme ‘Building resilient MSMEs: Why healthcare is critical.’ The discussion featured key industry experts and MSME entrepreneurs such as Kulin Shah, Co-Founder Onsurity; Mukesh Mohan Gupta, President of MSME association Chamber of Indian Micro, Small & Medium Enterprises (CIMSME); Parth Bhinde, Co-Founder, Asian Clays and Vijayalakshmi Swaminathan, Chief People Officer, Pine Labs as panellists.


Watch the full session here: ET MSME Talks | Building resilient MSMEs: Why healthcare is critical for MSME growth

Here are some edited excerpts from the panel discussion.
Economic Times: What are the challenges faced by an MSME business stakeholder, when it comes to providing accessible and affordable health care to their employees? What has been their experience with or without it?

Parth Bhinde: For a micro-scale organisation, the budget plays an important role and given the non-stability of employees and the staff in the micro-scale enterprises, it often becomes difficult for the employer to sustain healthcare benefits in the longer term. However, over time as the company grows, these things become a part of the organisation and one needs to find a balance between the two to create a stable organisational structure. In terms of staff, you need to provide certain facilities where they can have a sense of relief and a sense of security, because these people are at the lower end of the whole employee scenario.

Economic Times: Could you from your vantage point put a number on MSMEs in India that offer healthcare benefits to their employees and what's the outcome of that? Also, do you agree with Mr. Bhinde and see it as a key point when it comes to the relationship between MSMEs and employee healthcare benefits?

Mukesh Mohan Gupta: If employees are satisfied and feel secure that should they face a medical emergency in future, the cost of it will be borne by the insurance company, the services of which might in fact have been provided to them by their employer, then they could better concentrate on their productivity. If MSMEs could provide good health or other insurance facilities to their employees, not only would it improve productivity but also the rate of employee retention and hiring of new talent would witness an improvement.

Talking about the number of MSME providing health insurance covers to their employees, out of 6 crore MSMEs in India, only about 5-10% of the MSME are able to do that and this is as per a recent study conducted by KPMG in association with FICCI along with the data released by the IRDAI. I believe the reason for such a small percentage of MSME working towards providing health care packages could be both lack of awareness of this front and the high cost of these products.

Economic Times: What's been your experience with MSMEs with regard to the trends you’ve seen in the adoption of healthcare solutions, particularly in terms of the offtake of wellness insurance products? What are they looking for?

Kulin Shah: It’s true that only about 5% of the MSMEs in India have access to employee healthcare benefits. Among the MSMEs we talked to, possibly just 5 out of every 100 MSMEs had some kind of solution for employee healthcare. However, today, both large and small organisations are looking at providing healthcare benefits to employees, and we are now witnessing SMEs and MSME looking to hire from almost the same talent pool as a large consulting firm or a large conglomerate.

But there is a stark difference in terms of the benefits being given out. Hence, MSME are now looking for DIY solutions that are digital in nature and can help them take the mandate forward and easily provide it to their employees. And that is what Onsurity is working towards building - we are currently providing MSMEs with affordable monthly subscription plans instead of the high cost annual ones, which in turn is helping them reduce the out of pocket medical expenses for their employees in an affordable manner.

Economic Times: Would you also share some insights from your perspective on when it comes to businesses, which are dominated by women as workers or business owners, what's been the take of healthcare and where does it differ?

Vijayalakshmi Swaminathan: I don't have the numbers but from what I've seen, I think the offtake of healthcare products among women in the limited sectors that I have seen, has been higher. For example, even in Pine labs, the way we approach some of these is based on that community thinking. If I can bring a community of women leaders, women employees together to think about and talk about health, it could be physical health, mental health, and talk about what they can do differently, they feed off each other's energy and inputs. And of course, the trust in that cohort is very high, they depend on each other to provide the right kind of information and learn from each other. And that could possibly be driving the higher uptake in my experience, but I see health for women seems to be a very important topic, and hence the uptake is higher.

Kulin Shah: In the MSME sector a lot of employment is contractual, especially for women who prefer flexible timings. However, we have witnessed women's healthcare taking a big upswing with coverage for things like IVF, HPV vaccines etc being more in demand nowadays. There is a huge focus on mental wellness too both for men and women and with more women centric healthcare benefits now in focus, we have also witnessed a shift in terms of women being given more respect. They are now able to take home benefits of wellness packages for their families which was earlier mostly dominated by the male working members of the family.

For more such insightful conversations, visit the ET MSME Awards 2022 website