Archive for September 2012

Is Kenya’s healthcare sector ready for a take-off?   2 comments

Last month had me traveling around the world courtesy of Saïd Business School’s capstone Strategic Consulting Project and our multinational corporate partner who is currently looking to become more invovled in healthcare innovation in developing countries. I just finished my second short stint in Nairobi, and I am thoroughly impressed by a number of developments in Kenya. The current macroenvironment for healthcare in Kenya combined with individuals’ entrepreneurial efforts has produced palpable excitement in the sector that may well signal a new dawn for healthcare in the country. Most interesting, the opportunities for Kenyan private sector healthcare may be the best they have ever been.

One of the most important macroenvironment trends is the improving political stability since the post-election ethnic conflict of  2007-2008. Since then, a new constitution has been ratified and the upcoming elections will be preceded by a number of bureaucratic improvements that will streamline the alignment of commercial ventures with committed policy-making. This political normalization has also allowed for an increasing amount of “business as usual” from the administrative arm of the government including more direct financial management of HIV/AIDS spending and a new eHealth strategic plan. Although the next round of elections scheduled for 2013 may well herald a new wave of vote-rigging and subsequent violence, the two rival political parties from the last election have learned to work together through power-sharing and the knowledgeable city-dwellwers I have spoken to in Nairobi seem optimistic.

mPESA Transaction

Many groups are trying to repeat mPESA’s success in mobile money payments by coming up with similar mobile-related leapfrog applications for healthcare. (Courtesy of OpenIDEO)

Another trend occurring in Kenya is the overwhelming success of modern mobile telecom infrastructure. Nearly every business venture I met with in Kenya includes in its business model a component related to mobile technology. Mobile technology in developing countries has been shown to be a major catalyst for healthcare development but where Kenya stands out is in its mobile phone penetration. Over 70% of Kenyans own and use a mobile phone and nearly a 1/4 of the country’s GDP is transacted through Safaricom’s mPESA mobile payment service (see more).

All of these trends have directly stoked the entrepreneurial efforts of many Kenyans. Zoe Alexander Ltd is a new technology start-up who is leveraging automated telephone systems (“robo-dialing”) and Kenya’s high mobile penetration to deliver personalized audio messages to pregnant mothers that time appropriate antenatal visits and warn mothers’ of “red flag” warning signs during pregnancy. Zoe Alexander and others have also focused on bypassing the existing healthcare infrastructure because of the its overly bureaucratic nature in Kenya. Another example is Changamka Microhealth’s use of health savings accounts to incentivize individuals to save rather than trying to expand the relatively small population footprint of the country’s national social insurance plan. The latter’s bureaucracy was unable to design a means of participating in the plan for individuals that did not work for major Kenyan corporations.

While such initiatives will not radically change the health and wellbeing of the average Kenyan overnight, these efforts should be complimented for their inventiveness and aspirations for self-sufficiency. Through my travels last month, I have heard far too many stories of companies seeking overly traditional approaches to reaching low- and middle-income healthcare consumers. Marketing techniques designed for industrialized countries will not work elsewhere unless modified to local conditions. Home-grown, for-profit healthcare in Kenya may be the first sign of lessons learned.

Disclosure: I, nor my summer employer, have any financial positions in the companies listed here. However, my trip to Kenya was funded as part of business development field research for a multinational corporation.

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