NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

One of the harsh realities of the current state of global health is that the quality and supply of life-saving innovations exceeds the capacity of many health systems to deliver them.

Exciting new innovations are being developed. But for many low-income countries, gaps in the underlying infrastructure to support their delivery – especially for rural areas – limit the potential of these innovations to improve health care.

In our experience at VillageReach, looking at the problem from the point where health care is delivered to patients ensures that capacity development focuses on the weakest link – the last mile – but also where underlying infrastructure is most limited. We’ve determined that private enterprise has a significant role to play in developing the infrastructure necessary to achieve sustainable improvements in health care.

Vaccine development – arguably global health’s greatest innovation – is a case in point. With billions invested, the aggressive introduction of vaccines has saved millions of lives. But subsequent gains have been more elusive: Many low-income countries have seen immunization rates essentially stuck at 80 percent. GAVI Alliance CEO Seth Berkley estimates that today as many as 22 million children are unable to access vaccines. More than two million die from vaccine-preventable diseases every year.

Efforts to reach the remaining 20 percent – the Final 20 – have been insufficient, largely because much of this neglected population is rural and remote. For many of these communities, long travel distances, minimal transportation services and high poverty rates prevent mothers from making their kids available for immunization and other basic health care measures, raising the cost of health services. Families with sick children find it more difficult to exit poverty, and their communities have fewer opportunities to advance.

Investing in Community Infrastructure

With so much investment and innovation in vaccine development, we should be looking to where leverage can be applied to fulfill that promised value. Much of VillageReach’s work has focused on improving vaccine delivery by increasing frontline health worker productivity and capacity, and making information technology more useful and practical in the field in order to improve data reporting and performance measurement. Our model also leverages private enterprise to develop common infrastructure that both health systems and the communities require.

In creating opportunities for investment in infrastructure, we look at gaps in key community services – transport, communications and energy supply, for example – that limit health care delivery. The intent is to address the health access and capacity problem by creating enterprises that also serve commercial customers in order to achieve financial sustainability.

This focus on infrastructure isn’t only to provide single solutions for common problems. The economic multiplier is higher for investments in infrastructure than in other sectors, since the construction of roads, bridges, communications, and energy supply networks employ workers and enable commerce. World Bank President Jim Yong Kim acknowledged the importance of this link recently, noting that investment in Africa’s infrastructure increased from 16 percent to 22 percent of GDP over the past decade. Africa’s 5 percent annual GDP growth during the period is greater than for any other region worldwide.

Supplying Energy for Mozambique’s Health System – VidaGas

Mozambique and its health system have faced many of the same challenges of other countries in sub-Saharan Africa. Much of the population lives in remote communities that are difficult to reach. Less than 35 percent of the country has access to the electrical grid – access is much lower for rural communities. Health services are also impacted: The supply of vaccines to rural health centers is irregular due to the great travel distances involved, and limited refrigeration results in wasted vaccine stock. This lack of reliable energy also impacts health center performance well beyond vaccine delivery, making it difficult to sterilize medical equipment and provide the necessary lighting for procedures conducted after dark.

(Left: VidaGas trucks)

We set a goal of improving the capacity and reducing the cost of health care delivery in Mozambique. It was clear that a solution was required that would address the critical gap in energy supply affecting the performance and economics of the cold chain for the health system. It was also clear that the solution must be sustainable by attracting broader demand for the service.

In 2002, we established an energy services company, VidaGas, in partnership with Fundação para o Desenvolvimento da Comunidade (Foundation for Community Development). When VidaGas was created, the initial network of rural health centers comprised 100 percent of gas shipments. Today, that percentage is 17 percent. The majority of VidaGas’ service is now directed at enterprise customers – restaurants, hotels, small factories, and a growing retail network that enables households to replace traditional wood and charcoal that produce harmful indoor pollutants. The message is that without revenues from the private sector, the company wouldn’t have the resources to support its obligations to the health system.

The company’s growth – in excess of 35 percent annually since 2010 – has accelerated with additional capital investment from Bamboo Finance/Oasis Fund. Today, VidaGas is expanding its operations into new geographies and market segments. The company is now the largest independent energy services provider in northern Mozambique, with three large-tonnage storage and filling facilities across the region serving five provinces and more than 50 percent of the country’s rural health centers.

We anticipate similar growth in the future, as the business expands its base of enterprise customers, builds a larger retail network to reach more households, and expands operations into new provinces in order to supply more rural health centers.

John Beale is director of strategic development and group lead, social business, at VillageReach, a non-profit social enterprise focused on saving lives and improving well being in low-income countries by increasing access to quality health care for remote, underserved communities.