Jenny Melo

Combining Profitability and Social Impact: Salud Fácil makes a commitment to health in Mexico’s low-income communities

Editor’s note: This post first appeared in NextBillion en Español and can be found in Spanish here.

In many Latin American countries the capacity of public health services is overwhelmed by the large demand. Yet many low-income residents lack the financial resources to seek health care in the private sector, where there is excess capacity. To address this problem in Mexico, Fernando de Obeso developed Salud Fácil, a social enterprise that combines financial and health services, and seeks to give middle- and low-income communities more options for their health care.

NextBillion en Español Editor Jenny Melo recently spoke with Fernando to learn more about the Salud Fácil model and its history.

Jenny Melo: What situations caused you to think about and develop Salud Fácil?

Fernando de Obeso: According to an OECD (Organisation for Economic Co-operation and Development) study, Mexico has (too few hospital beds) to serve the current population. For example, in Mexico for every 1,000 inhabitants there are 1.7 hospital beds (those that can be used for preoperative treatment and recovery of patients), compared with the average of 5 beds per 1,000 inhabitants in OECD countries.

Based on this situation, and considering the great difficulties the population is having accessing the government health system – they must wait on average six to eight months between reaching the health system and the time they are served by a physician – we created Salud Fácil. Initially we financed only a specific type of surgery – limb salvages for patients with a diabetic foot. In this new phase of Salud Fácil we finance all types of surgeries.

J.M.: What is the goal of Salud Fácil?

F.dO.: Our objective is to support the health of the more disadvantaged classes and give an opportunity to people who today have to access health services in the public sector, with a wait of six to eight months. We take them to private clinics through low-cost financing.

We are taking people from where there is an excess demand for services (public-sector hospitals) to where there is an (excess) of beds and hospitals, which are the private, low-cost clinics. We do this through the funding. Our focus is 55 percent of the Mexican population who earn between $350 and $500 a month, and need a treatment that can range from $1,500.

J.M.: How did the Salud Fácil launch go?

F.dO.: In 2012 we launched Salud Fácil. We contacted Fonacot, a big microfinance group of the Mexican federal government whose mission is to improve the quality of life of workers. This contact materialized into an alliance which provides us with funding that comes from the public sector and allows us to handle very low interest rates.

J.M.: Tell us how the Salud Fácil operating system works.

F.dO.: We have agreements with hospitals and doctors, who send us patients to obtain financing. But in the same way, if a person approaches Salud Fácil and has a doctor of choice, we also provide funding for surgeries in clinics with doctors with whom we have no agreement. In short, we offer financial advice to the patient so that they can know the options they can access.

I will tell you about a case to illustrate how we work:

A worker who was a lathe operator (was diagnosed) with needing cataract surgery, but they scheduled the operation for eight months later. This worker, about 55 years old, was very worried because his livelihood depended on his lathe work, and waiting eight months for surgery would expose him to losing more vision and the possibility of having a labor accident. So I decided to ask for a second opinion at a low-cost private clinic, knowing this person didn’t have the ability to pay for this surgery. He came to Salud Fácil, where we processed his credit.

J.M.: What is your financial plan?

F.dO.: Right now we have equity investors and an agreement with Fonacot. With Fonacot we have an almost unlimited capacity for growth because they offer us all the resources we need. With the resources of investors we develop a marketing strategy that allows us to overcome the main obstacle we have right now, which is that people in our market do not know we exist.

J.M.: What are the interest rates that Salud Fácil handles? How does that contrast with the available formal and informal rates?

F.dO.: We handle 10 percent annual rates; these rates are quite different from those that manage microfinance in Mexico, which are between 150 percent and 200 percent annually.

J.M.: If that is the average of the market, why did you decide to have a low rate?

F.dO.: We can have rates of 10 to 30 percent annually because we are handled by Fonacot, a public entity. Their mission is not to make higher profits, their mission is to support the population. Similarly, we believe that it is a responsible rate, consistent with our mission to support the population.

If the idea is to become a millionaire in a few months, this type of business is not possible. Our mission is to generate value and gain a return value, all through a long-term view.

J.M.: Give us some figures of population coverage and the amount of credits that Salud Fácil handles.

F.dO.: We manage an average of $2,000 per credit. The lowest credit we offer is in quantities of $400, with the highest at $10,000. The latter has to do with major surgeries like cardiac surgeries.

Our coverage goal this year is 7,000 people. Our projection is to cover between 17,000 and 20,000 people within 36 months. Considering that 4 million surgeries are left undone by the lack of capacity, this indicates that we still have much to do.

J.M.: What was your personal path in coming to Salud Fácil?

F.dO.: I have spent nine years in a field of business that focuses on the bottom of the pyramid. I studied industrial engineering and I worked in marketing at Procter & Gamble. Later, I was at Harvard Business School doing my MBA, and once I finished I went to work in investment banking. After spending some time in the United States, in 2002 I returned to Mexico and I started giving business advice to small and micro enterprises. One of my clients was a microfinancing institute, and there I began to realize the potential of microfinance and especially the social impact that it can have. In this case I started to dabble in the base of the pyramid, and Salud Fácil arose from there.

I think it is possible to combine profitability and social impact, so I am working on it.

Health Care
financial inclusion, public health, public-private partnerships