Archive for the ‘Kenya’ Tag

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.

Posted September 15, 2012 by Ira Leeds in Global Health, Healthcare as a Business

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Micronutrient powders as a sustainable solution for child malnutrition   5 comments

The World Health Organization rates malnutrition as the foremost threat to global public health. Each year, over six million children die of starvation, and more than one billion people suffer from vitamin and mineral deficiencies requiring medical attention. Media coverage of malnutrition tends to highlight starvation, but micronutrients (e.g., Vitamins A through E, iron, and zinc) are equally important for child wellbeing. Substantial medical evidence suggests “micronutrient malnutrition” in the first two years of life has a lasting impact via physical and cognitive impairment.

A “Sprinkles”-branded Single-use MNP Sachet

Micronutrient food fortification — adding micronutrients to a person’s everyday food — is one of the most cost-effective public health interventions available today. Unfortunately, most children suffering from micronutrient deficiencies live in rural, subsistence economies that are not easily reached by traditional industrial food fortification (e.g., iodized salt, fortified flour). As opposed to manufacturers adding micronutrients through industrial food processing, at-home fortification with individuals adding their own micronutrients have also been successful.  Studies by the U.S. Centers for Disease Control and Prevention(CDC) in rural Kenya demonstrated that at-home food fortification – using micronutrient  powders (MNPs) (see photo at right) – was effective in substantially reducing rates of micronutrient malnutrition in these communities. Most interesting, these MNPs were provided using a market-based model where mothers were paid a  near-market retail price for the product from door-to-door sales agents. Despite this proven demand, there is currently no on-going supply of MNPs in most countries of the world because of limited coordination between commercial distributors and public health advocates.

A community education tool for teaching mother’s how to use MNPs safely and effectively. (Courtesy CDC)

In January 2012, the Global Alliance for Improved Nutrition (GAIN), industry partners, MBA colleagues of mine, and I met in Nairobi to discuss how to introduce micronutrient home food fortification products to Kenya through a market-based mechanism. The consensus reached was that although support from health authorities existed, the collaborative nature of public health interventions in under-resourced areas would required a very unique business model for market-based MNPs to succeed.

Our team of MBA students helped craft a business plan for GAIN and its private partners that demonstrated the economic feasibility of a public-private partnership model that could provide micronutrient powders across Kenya through a market-based, financially self-sustaining process. Armed with the proper cash flow models, marketing plan, and risk analysis, GAIN’s Kenya Fortified program is currently in the process of securing start-up financing and locating Kenyan commercial operators with the appropriate logistical capabilities for distribution and sales (see video below). Delivery of the first locally-branded micronutrient powders to Kenyan communities is expected in early 2013 (with future production scaled to up to 300 million sachets per year).

Even more exciting than this particular project’s success is the potential for future efforts to deliver similar programs around the world. The basis of the solution above was taking existing opportunities and capabilities and reshaping them to fit a unique market macroenvironment (i.e., rural Kenya).  This project demonstrates that although such radical rethinking of business models may be difficult, successful new methods of achieving healthcare goals often lie at the other end of the process.

Disclosure: I have received no monetary or in-kind compensation from my work with GAIN or in promotion of MNPs more generally.

Posted August 15, 2012 by Ira Leeds in Global Health, Healthcare as a Business

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