7 Challenges to Health Entrepreneurship (and some interesting things being done)

In low and middle income countries (LMIC) scalable entrepreneurship in health services is elusive and often looked upon with curiosity and a dash of skepticism. The reaction reflects the reality that in LMIC, health services for the impoverished and working poor is provided almost exclusively through the public health system and predominately funded by international donors. But perhaps we need our skepticism to question not what there is but what there is not. So where are the health entrepreneurs?

Some of them (entrepreneurs) are in South Africa, and a growing in number . In the Spring 2017 Stanford Social Innovation Review Field Report, “Health Clinic Entrepreneurs” I write about the Unjani Clinic Network model in South Africa that was introduced to me by Johnson & Johnson SA in 2016. The Unjani model is an enterprise initiative of the Imperial Logistics Group and delivers high quality primary care at half the cost of comparable fee-for-service primary care clinics while creating a growing cohort of nurse-entrepreneurs. The model achieves this by utilizing task-shifting staffing principles supported by a mentoring system and business process methodology designed specifically for nurse-owners to become nurse-entrepreneurs. An early believer and investor of Unjani was Johnson & Johnson South Africa (J&J SA). J&J SA’s review placed great importance in evaluating Unjani’s business model sustainability and scalability as well as strong health outcomes that would strengthen the public health system. Although a fee-for-service model, affordable quality primary care improves the overall capacity of the public health system. Laura Nel, Communications Lead for Johnson & Johnson in South Africa explains (that),

“In our effort to deliver innovative approaches to public health challenges, we seek out strategic partners, such as Unjani, who are applying creative, proven, locally-driven health solutions that can be scaled nationally and regionally. The commencement of our collaboration with Unjani in South Africa is part of Johnson & Johnson’s broader commitment to improving public health. We are harnessing our collective breadth and scale, with support from the Johnson & Johnson Family of Companies in South Africa and the Johnson & Johnson Corporate Citizenship Trust, whilst partnering locally with organizations like Unjani, in order to deliver solutions that meet some of the world’s most crucial health challenges.”

Think about health entrepreneurs in two ways; first, broadly as entrepreneurs, and social entrepreneurs focused on health. Secondly, the ability to scale and the ability of the organization to continue beyond the founder or current management team.

7 Challenges to Health Entrepreneurship

1. One’s floor is another's ceiling: The United Nations - The Universal Declaration of Human Rights states, ““…the highest attainable standard of health as a fundamental right of every human being.” Therefore, health is not a value-add, it is a core modality. It is a very high bar to aspire to, much less to adhere to.

2. A profit penalty: Implicitly and explicitly a mission to improve health status is a social mission but considered less and less so if a profit (or too much of a profit) is part of the model.

3. Sustainability and profitability are lost in translation: Profitability in LMIC health systems is more readily scrutinized than profitability in other industries in LMIC.

4. Trust is the starting point: the health consumers believe that providers are trustworthy so the challenge is not to lose their trust versus other industries where you must gain trust.

5. Entrepreneurship in health has the highest risk: When mistakes are made the consequences are people, not products.

6. Need doesn’t mean market: This goes directly to sustainability. If there is no market, a service is a solution that is looking for a problem rather than a solution capturing the value that exists.

7. Scarce capital: start-up capital and capital to scale are expensive or hard to access. Commercial loans at 20% or more is not uncommon and forces a service to target high value (wealthy customers) or be able to capture significant market share.

Reuben Coulter, CEO of Transformational Business Network (TBN) explains that entrepreneurs do not succeed in a vacuum. "There is no shortage of brilliant ideas but sadly too often they fail. We partner with African entrepreneurs to grow ideas into businesses and together scale their impact. An African proverb says 'If you want to go fast go alone, if you want to go far go together'. This is particularly true for health entrepreneurs." TBN’s mission is to identify, connect and facilitate the introductions and leverage the interaction of entrepreneurs, investors (financing) and expertise to achieve sustainable impact.

TBN’s Scale for Success program model
TBN’s Scale for Success program model

Leverage Organizations and Systemic Capacity Building

Amongst the challenges cited one of the most intractable is the need for affordable financing coupled with capacity building support. With good reason, in health, regulatory oversight is more pervasive and stringent than other industries; thus connecting and aligning policies, people and resources is not only critical but essential. Organizations such as the Transformational Business Network (TBN) and the Johnson & Johnson Corporate Citizenship Trust (JJCCT) are examples of a multi-dimensional tact to enable success by directly supporting entrepreneurs as well as strengthening “leverage” organizations working with entrepreneurs.

The Johnson & Johnson Corporate Citizenship Trust has been actively supporting the creation of sustainable entrepreneurial health service delivery models and businesses through a combination of direct support and capacity building. Benjamin Davies, Partnership Director at the JJCCT explains, “(with) the decision to fund the Transformational Business Network we wanted to maximize and accelerate the impact of the Trust’s support. Providing seed funding through TBN for a locally based innovation gives budding health and social entrepreneurs in East Africa, and especially Kenya, the ability to take their ideas into practice with the guidance and knowledge of the expertise, know-how and connections that TBN can bring. J&J and the Trust believe that providing an enabling environment for new business models to be tested and tried is key to finding new solutions to greater delivery across the care continuum.”

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