The big picture
Across the world, providing quality healthcare to the poor is one of the biggest challenges and South Africa is no exception. Rural communities are poorly serviced with medical facilities and staff, while those who can’t afford medical aid or private hospitals face an overburdened and underfunded public health system. Could the answer to providing health care lie in social entrepreneurship that brings together social good and sustainability?
What South Africa’s health care landscape looks like
According to the World Health Organisation (WHO), the life expectancy of a South African man in 2009 was 54, while a woman’s life expectancy was 55.
The world average is 69 for men and 75 for women and the South African government’s goal is to improve life expectancy to 58 in 2014. When health is one of the key players in longevity, this presents a huge logistical challenge.
Good in action
Aravind Eye Hospital was founded in India in 1976 by Dr Venkataswamy (commonly known as Dr V) to diagnose and treat epidemic proportions of preventable or curable blindness. It’s grown to a large network that has seen over 32 million patients, performed over four million eye surgeries – 350 000 happened in 2012 alone – and 100% of its revenue is earned. How? It was inspired by McDonald’s.
“The McDonald’s franchise believes they can train people from all over the world, irrespective of religions, cultures and backgrounds, to produce a product in the same way and deliver it in the same manner in hundreds of places,” says Dr V.
“I wanted the same mechanism and efficiency of delivering eye care — the human eyeball is the same across the world and so are its problems, yet there is so much variation in the quality and service delivery of eye care, especially because of logistics and affordability issues.”
So Aravind Eye Hospital secured its own supply of intra-ocular lenses by building a plant and bringing prices down to 2% of the original cost. It now occupies 7% of the global market and supplies to 120 countries.
Consultation in rural areas costs around 20 rupees (R3) for three consults, thanks to retina cameras in mobile camps that feed back to doctors at base-hospitals; procedure and system efficiencies have quadrupled surgeon productivity; and the organisation runs internships and accredited diplomas for ophthalmologists, paramedics, eye-care managers and support service personnel.
“While we give a lot of medical services for free, those who can pay, pay local market rates or less (around $35). We’ve benefited from existing market inefficiency, and over the years the result has been expenditure increases with volume, revenue increases at higher levels, and a healthy margin while treating a large number of people for free. In absolute terms, in 2008 we earned $20 million and spent about $13 million with over 40% EBITA,” says Dr V.
• Visit: www.aravind.org
For more information on how a similar model is providing maternity care in Kenya for a fifth of the price of private care, visit Jacaranda Health.
A well-known Brazilian gastroenterologist, Dr Roberto Kikawa, started Project CIES in 2008 in order to help service the medical needs of rural communities in Brazil.
In 2011 the project – with an annual budget of $720 000 and using a leveraged non-profit business model by partnering with local government and private companies – had already directly benefited 33 000 individuals and earned 100% of its revenue.
Dr Kikawa developed three innovative mobile structures that have exam and surgery rooms applicable to between four and ten medical specialties tailored to the specific community needs, and on a single day can see 250 people for an average cost of $10 each.
The cost structure charges the same rate for a medical consultation to all clients to break down the culture of paying premiums for specialists’ services. Costs for medical events are reduced through partnerships with local government and companies to provide materials, equipment and professionals.
“The Health Truck event generates a gross income of $44 000 to $200 000. From this amount, 20% to 30% goes to fixed costs, 10% to new investments, 40% to cover costs of the event and 20% goes to cash reserves,” says Dr Kikawa.
The project also builds relationships with community organisations that recommend individuals to work as receptionists, cleaners, nurses, or as other paid employees in the clinics. Local companies sponsor the assorted expenses of moving, maintenance, insurance, transportation, food, and lodging for the crew.
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