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

Editor’s Note: As part of our series, Advancing Healthcare With the Base of Pyramid series, this is the second in a pair of articles focused on reaching BoP markets with healthcare innovations. This article addresses the perspective of a social enterprise start-up while the previous piece presented the perspective of several multinational corporations.

In the previous article in this set, I wrote on the experiences of two large companies with reaching BoP markets with healthcare products and services. Their perspectives can be found here.

That article covered the issue of getting good stuff to people who need it from the corporate perspective – with big budgets, thousands of eager employees, and the ability to use philanthropy as a tool. But what about when the innovations are just emerging, the organizations building them are small, and you’re based in an entrepreneurial team with social impact motives? For this perspective, I spoke with Al Hammond, Ashoka entrepreneur, NextBillion advisor, author, and founder of Healthpoint Services.

From biotech startups to North India

Distribution often is the crux of engagement with BoP markets.

In every village where Healthpoint operates, it builds a permanent clinic, which costs roughly $50,000. Through the clinic, the organization provides North India residents with access to technology in the form of telemedecine, a diagnostics lab, provision of medicines and clean water. Local people are trained in the provision of all services with doctors in other locations answering queries via telemedicine technology. Like Pfizer and GE, Al deeply understands the value of partnerships. “Partnering is critical. These are complicated problems and any one organization is unlikely to have the skills it needs. So you need to build an ecosystem that supports scale, lowers the risk and increases likelihood you can succeed.” In the case of Healthpoint, this meant “building partnerships with every start up building these technologies that we could find.” For example, start-ups produce the “labs on a chip” Al’s team hopes to use to remotely conduct DNA analysis on a sample and receive a readout in about 5 minutes for the cost of $10. It’s a good fit: biotech startups need distribution and testing; Healthpoint needs the technology to make Healthpoint attractive and affordable to rural clients.

While Pfizer and GE’s programs both rely on local partners such as government ministries and LCS’s for distribution and access to patients, Al’s team built a distribution channel from the bottom up. One can argue about the effectiveness of each approach (and we certainly plan to in future NextBillion posts) but to Al’s team, there was no question about how to do it. “We started with distribution for our core services,” says Hammond, “and will later figure out what additional products and services to use in that distribution system.” Al points out that where most distribution systems fail is that they are not economic particularly for single-service provision. He predicts that in the coming years, the four services Healthpoint provides now will probably double. Only partially joking, he notes that since Healthpoint has broadband wireless access, they might someday enter the education market. The Healthpoint model is unique (and capital intensive) precisely because of the permanent infrastructure that the organization builds in each community. But despite that risk, for Healthpoint, “its how we become a part of the community – how they know to trust us and that we are going to stay around.”

Although Healthpoint builds its own distribution system to get its services out to those who need them, not unlike Pfizer and GE, Healthpoint relies on partnerships (including those with Ashoka, P&G, local governments, and with other entities) to get things done. (We look forward to providing more details on its partnership with P&G shortly). And given similar to obstacles faced by large companies, effective distribution systems are critical to the success of the organization.

… And back again

For reasons we discussed in the previous piece in this set of articles, moving tech solutions from emerging markets to developed markets is a tough business. Many thought leaders (Al Hammond included) believe that the real potential lies in the workflow innovations that don’t require the same level of regulatory scrutiny to implement. Hammond speculated that Walmart could someday take on point of care (POC) diagnostics care that Healthpoint uses today in North India as an add-on to its existing in-store clinic services. Walmart’s strongest markets are in the rural parts of the U.S., where we have the lowest rates of healthcare provision and lowest numbers of qualified doctors, not unlike India.

If Walmart could use the the POC innovations we’re proving viable now in India to provide a 20-minute, $20 diagnostic result and give the patient the medicine they need, we could dramatically change healthcare access in this country.