Financing Models: Can EMIs and Insurance Unlock MedTech Adoption?

India’s healthcare industry is valued at USD 372 billion (2025) and heading toward USD 500 billion by 2030.
Yet, adoption of advanced medical technology remains concentrated in metros.

The problem isn’t lack of demand - it’s lack of accessible capital.
With 39.4 percent of health expenditure still out-of-pocket, hospitals in Tier-2 and Tier-3 cities often delay equipment upgrades, and patients avoid critical procedures due to upfront costs.

Unlocking this ₹20,000-crore latent demand requires financing models that turn heavy CAPEX into affordable, outcome-linked OPEX.

Why Traditional Financing Fails

Conventional bank loans and equipment financing are structured for large corporate hospitals.
For smaller providers, they create debt risk rather than operational leverage.

Key friction points:

• High collateral requirements: Many hospitals lack fixed-asset backing.

• Slow approvals: Long credit cycles clash with urgent procurement needs.

• No link to utilisation: Repayments remain fixed, regardless of patient volume.

• Lack of bundled service coverage: Repairs and software updates become hidden costs.

As a result, promising technologies - even locally manufactured - fail to cross the affordability barrier.

1. EMIs for Hospitals: Shifting from CapEx to OpEx

Hospitals are now exploring EMI-based acquisition plans, mirroring consumer finance models.
Under this structure, vendors or NBFCs allow facilities to pay monthly instalments for high-value devices such as ventilators, imaging systems, or laboratory analysers.

Why it works:

• Spreads out cost over 2–4 years.

• Enables early adoption without disrupting cash flow.

• Encourages preventive maintenance bundled with payments.

What to watch:

• Interest rates (often 12–14 %).

• Need for vendor-backed warranties to reduce default risk.

• Transparent cost of ownership over device lifespan.

This OpEx-driven model allows even 50-bed hospitals to access equipment once reserved for metro chains.

2. Device-as-a-Service (DaaS): Pay Only When You Use

One of the most promising models emerging in the medical device market in India is DaaS - subscription or pay-per-use access.

Here, hospitals or labs pay based on utilisation (number of scans, tests, or procedures) rather than fixed instalments.

Advantages:

• Zero upfront cost.

• Payments tied directly to revenue generation.

• Continuous vendor responsibility for uptime and upgrades.

Example:
Diagnostic chains now lease MRI scanners under revenue-share terms, paying per scan rather than owning the machine.
This model aligns incentives - vendors ensure maximum uptime, while hospitals reduce idle asset risk.

3. Patient-Side EMIs: Democratising Access to Care

Fintech-driven healthcare lending is reshaping patient affordability.
Startups and NBFCs now offer instant medical EMIs, allowing patients to pay for surgeries, implants, or diagnostics in monthly instalments.

Platforms integrated into hospitals’ billing systems can approve loans in minutes.
With insurance penetration still below 40 percent, this model fills a crucial gap between medical need and financial readiness.

Impact Metrics:

• 20–25 percent rise in elective procedure uptake in financed hospitals.

• Average loan ticket size ₹25,000–₹1.5 lakh.

• Default rates below 3 percent due to hospital verification.

These patient EMIs create a win-win: hospitals increase utilisation, while patients access timely treatment without liquidity stress.

4. Insurance-Linked MedTech Financing

As health insurance coverage in India expands under Ayushman Bharat and private schemes, insurance-led financing can make devices more viable.

Two approaches are gaining traction:

• Bundled Device + Service Coverage: Insurers partner with MedTech OEMs to include device-based diagnostics (e.g., home ECG or glucose monitors) in premium plans.

• Outcome-Linked Reimbursements: Hospitals receive payouts tied to digital proof of device usage and recovery outcomes, incentivising adoption of validated technology.

This integration turns MedTech into part of the care continuum rather than a one-time capital purchase.

5. Public-Private and Impact-Finance Models

Government-linked credit programs and development finance institutions can play a catalytic role.

Examples:

• SIDBI and NABARD exploring healthcare equipment credit lines for MSME hospitals.

• CSR + Impact investors funding pay-per-use diagnostic infrastructure in semi-urban regions.

• State health departments leasing equipment under Build-Operate-Transfer models for district hospitals.

Such blended financing mechanisms make technology deployment sustainable while addressing equity in access.

The Digital Multiplier Effect

Digital health infrastructure like the Ayushman Bharat Digital Mission (ABDM) and unified payment interfaces are making healthcare transactions traceable and credit-worthy.
Lenders can now assess device utilisation data directly, reducing default risk and enabling dynamic pricing of loans.

The rise of embedded finance in healthcare will soon make equipment financing as easy as buying a car - real-time credit scoring, e-contracts, and automated collections.

Challenges to Scale

While promise is clear, execution requires stronger guardrails:

• Standardised ROI metrics for lenders to assess device performance.

• Credit-risk insurance for hospital-side loans.

• Regulatory frameworks defining DaaS ownership and liability.

• Awareness among smaller providers about financing literacy.

Without these, financing innovations could replicate old inefficiencies under new names.

Conclusion

India’s MedTech story cannot scale on innovation alone; it needs financial architecture that matches market reality.
EMIs, DaaS models, and insurance-linked financing can convert latent demand into measurable growth - especially across Tier-2 and Tier-3 India.

The question isn’t whether financing can unlock adoption - it’s how quickly stakeholders can align around it.

At GrowthJockey, we see financing as the new lever of healthcare innovation - designing business models that turn devices into outcomes, and outcomes into scalable ventures.
Because when affordability meets accessibility, MedTech doesn’t just grow - it transforms healthcare delivery for a billion lives.

FAQs

1. Why is financing critical for MedTech adoption in India?
Because most hospitals and patients lack upfront capital; EMIs and insurance make access viable.

2. What is Device-as-a-Service (DaaS)?
A pay-per-use model where hospitals pay for utilisation instead of ownership.

3. How do EMIs help hospitals?
They convert large capital purchases into manageable monthly payments, freeing cash flow.

4. What role does insurance play?
Bundled insurance products can include device costs and outcomes-based reimbursements.

5. Which markets benefit most from new financing models?
Tier-2 and Tier-3 cities where latent demand exists but affordability limits adoption.