Lisa Smith

McMedicine: Is Social Franchising the Next Big Thing in BoP Health Care?

Editor’s Note: This week we’re launching NextBillion Health Care, a new blog focused on deliverying medical services and products to low-income patients and consumers.

On average, half of all people in developing countries turn to the private sector for health care – even though public facilities are generally cheaper or even free. Why?

Two words: consistency and convenience. Private health care providers often have access to a consistent supply of medicines and other treatments that public sector providers lack. And private facilities are often located closer to the communities that use them than their public-sector counterparts.

Due to the strengths of these health care providers, investments in the private sector can play an important role in improving access to medicines and other quality health care services in low-income communities.

But to meet this goal, investors need to strike a difficult balance: maintaining the private sector’s advantages in consistency and convenience – while also keeping quality high and prices affordable. How can this be done?

One business model has proven particularly promising: health care franchising through a network of standardized service providers.

Burgers, Pizza… Health Care

Social franchise networks follow a familiar model. Just like commercial franchises like McDonald’s or Domino’s, social franchises design a successful business concept, then replicate it using a brand name. The only difference: they focus on delivering social benefit along with profit.

In health care, franchise owners may include both previously trained medical providers and entrepreneurs who are new to health care. For owners who lack a medical background, the company typically provides training in diagnosing illnesses, selling treatments, and facilitating long-term disease management for patients. Often extending to both urban and rural regions, these franchises have resulted in reliably improved access to quality services and commodities in low-and middle-income countries.

Most health care franchises include:

  • Training – both in clinical practices (which may vary in comprehensiveness) and business management
  • Standard treatment guidelines and management
  • Standardization of quality supplies and equipment
  • Consistent branding – including recognizable logos on signs, products, or garments
  • Ongoing monitoring and reporting of progress to franchisers
  • Network membership, or in some cases licensure

A franchised medicine shop Some health care franchises are building networks of medicine shops, while many focus on clinical services. For instance, Smiling Sun in Bangladesh is a USAID-supported network of providers that provide quality-assured health care, including prenatal care, family planning, malaria treatment, tuberculosis case management, and other general treatments and lab services.

In Africa and Southeast Asia, the Blue Star network includes over 4,000 community-level medical practitioners that focus on family planning, nutrition-related indicators and other general health services.

(Left: An example of franchise branding on a local Accredited Drug Shop in Uganda.)

Partnerships Ensure Sustainability

Private sector health care franchises may be accredited and regulated by the public sector to maintain certain quality standards. In some cases, partnerships between businesses, public entities and non-governmental organizations are creating new networks of private sector health care providers.

Private networks like Uganda’s Accredited Drug Shops and Tanzania’s Accredited Drug Dispensing Outlets receive training from the international non-profit Management Sciences for Health (MSH), and comply with health care and business standards overseen by their respective governments. Through this collaboration, shops receive a regularly updated list of medicines approved for sale.

Reports and Resources

Though social franchising has become a buzzword lately, health care franchises and accredited drug shops are not new approaches to health care delivery. In fact, they’ve been reported on and promoted in depth, by a number of different organizations.

The Global Health Group at the University of San Francisco puts together an annual compendium of clinical health care franchise programs that they track. The most recent report reviews 52 different clinical franchise models from across the globe, and includes specific information on each program’s target populations and disease area focuses. It also tracks the evolution of each franchise’s business model, including the number of outlets, number of states/provinces, and number of clients served per year.

Population Sciences International is a U.S.-based organization that helps promote a number of health care social franchises. It was an early investor in this approach to health care delivery. Marie Stopes International is another organization heavily invested in this area, particularly as it relates to family planning and reproductive health care services. Abt Associates and USAID promote networked private providers and franchising through the Strengthening Health Outcomes through the Private Sector (SHOPS) project. This initiative provides technical assistance to develop new franchises, and also assists individual franchisees with business management, financial planning and monitoring systems.

As I mentioned earlier, Management Sciences for Health offers tailored accreditation programs and multi-sectoral partnerships to improve access to quality health care services – particularly within rural communities. Their current program, Sustainable Drug Seller Initiatives, builds on two of their previous programs, Strategies for Enhancing Access to Medicines and East African Drug Seller Initiatives. In addition, MSH’s work describing drug seller initiatives through its Managing Access to Medicines and Health Technologies publication is key to the ongoing promotion of this delivery approach.

(Right: An Accredited Drug Dispensing Outlet in Tanzania.)

At the William Davidson Institute, we have partnered with MSH to examine the sustainability and day-to-day business practices of the accredited health care franchise model in Tanzania and Uganda. Our recent report focused on retail shop owners’ access to working capital and day-to-day shop financing to ensure consistent access to quality medicines.

The Center for Health Market Innovations (CHMI) also plays an important role in aggregating information on different franchise models. The organization has posted a number of analytical pieces on health care social franchises. And Rose Reis, a communications lead at CHMI (and NextBillion contributor), covers this topic regularly on CHMI’s website.

The Next Steps

Health care franchises and accreditation programs are an area of continued and growing international interest. Many organizations have gotten behind this model and sought to apply it appropriately to different contexts. But further rigorous research is needed to systematically assess the impact of health care social franchises over time. Surprisingly, a 2009 systematic review of this topic found no rigorously designed impact evaluations of the overall effectiveness of this approach.

Though social franchising in general has been discussed on NextBillion, the franchising approach to health care certainly deserves further coverage. As we develop NextBillion Health Care, innovative ideas like social franchising and accreditation for health care and drug shops will be an important part of the conversation.