NB Health Care

June 28

James Militzer

No Fortune at the BoP?: Economist Paul Clyde on the challenges of health care delivery in emerging markets – Part 2

Paul Clyde is on the business economics faculty at the University of Michigan, and he has worked as an economic adviser for public and private institutions in countries throughout Africa, Asia and Eastern Europe.

His recent focus has been on health care delivery to the poor in rural markets. He has advised or run over 40 projects in 10 emerging markets, helping develop financially self-sustainable health care business models.

I spoke with Clyde about the ongoing evolution of BoP health care. In part 1 of our conversation, he spoke about some fundamental changes the sector is experiencing, and the promise (and limitations) of existing business models. In part 2, he discusses the primary challenges BoP countries’ face in health care delivery, and how their health systems’ evolution could reshape their economies.

James Militzer: You mentioned the emergence of chronic care as a top priority for the BoP’s developing health care systems. How important will primary care physicians be to the process of diagnosing and addressing chronic care needs?

Paul Clyde: My hunch is that primary care physicians are going to decrease in importance, relative to where they are in the United States. So for instance, with diabetes care, it could start with nutritionists or diabetes counselors who have some clinical training, but who are instead focused on behavioral patterns and health habits, and who know enough about the clinical to know when they have to refer patients to the next stage.

Right now, in the U.S., if you look at the information flow in diabetes, you’ll see that the center is sort of the primary care physician, at least in the earlier stages. And there’s a constraint on the amount of time that a physician has. So if you can shift some of those tasks to another individual, you can free up the clinician for other work

Physicians are less likely to be out in the local communities. So if you can develop some sort of training and identify a protocol that could be conducted by someone at a local level – not only for diabetes but for all sorts of different conditions – the entire system can be much more effective. We see that to some extent even in the United States, where you see different categories of nurses, like nurse practitioners, that are taking on roles that used to be for doctors.

JM: What’s the biggest challenge in BoP health care, and how can it be addressed in a cost-effective way?

PC: I see the principal challenge in health care as one of information flows. And what I mean by that is, if you think about the vast majority of the clinical problems and challenges that are out there – we know how to deal with them, and in most cases, we know how to deal with them at a very low cost. Think of malaria, and increasingly HIV/AIDS, and diarrhea, which are some of the big killers – we know there are medicines for them, and we know processes you can use to avoid them, and to deal with them if you get them. The problem is in getting that information out to rural communities, and obtaining the information that needs to be obtained from the patients in those communities.

But that’s where we see some of the more interesting examples coming up. Aravind has these mobile clinics that go out to local villages, and work with the local leaders to offer free screenings for eye care to anyone who wants to come in that day. Mothers2Mothers engages expecting mothers who find out they’re HIV positive. It does this by having other mothers who are HIV positive, and who have had a child, interact with the expecting mothers and relate to them in a way that only they could relate to them. Because when I’m talking about information flows, I’m not just talking about data on blood pressure. I’m talking about trust and judgment and what I call highly complex information flows – these require different mechanisms that understand the patients’ motivations and constraints.

Paul Clyde, NextBillion Health Care

If we think about a hospital the way we’ve always thought about a hospital, we can put one there and it will have no effect because — with diabetes, for instance – if a patient reaches the point where they need to get to a hospital, you’ve lost the game in some sense. You can treat that patient, potentially, depending on what it is. But it’s going to be very costly and, particularly in the rural parts of emerging markets, it’s not sustainable.

With something like diabetes, you need someone working at the village level with a community health worker, on things like planting gardens, because diet and other aspects of lifestyle have a huge impact. So I think you’re going to need much more local contact going out to the patient, rather than having the patient (or potential patient) come to the health center.

Left: Paul Clyde

JM: What role you think government should play in encouraging health care systems in developing countries to be self-sustainable?

PC: India is a country where there are an enormous number of innovations in health care that are coming out right now. And I think there’s an argument to be made that part of the reason is because the government has not played much of a role. There are good sides and bad sides to that, but the good side is that it’s given health care institutions opportunities to develop models that they might not have been allowed to develop otherwise, to see if they work.

JM: But isn’t there a need for government regulation of health services and pharmaceuticals, for example?

PC: I think it is worth looking at what governments have had some success with. For example, with pharmaceuticals, fake drugs that come into a country are a significant problem. But I haven’t seen an example of a solution by the government alone that addresses that very effectively. There are some market mechanisms out there that try to deal with that. For example, Sproxil is coming up with methods that allow patients to verify the authenticity of a drug, where you call a phone number and type in the ID number that’s on the pharmaceutical product’s packaging, and they will verify whether it’s a legitimate batch or not.

So I think there is a role for governments to try to ensure that fake drugs are not used. But it may be that the most effective way to do that is to work with the market in providing those solutions.

JM: How do you think the health care systems in BoP countries will look 20 years from now?

PC: I think there is a real chance that we will start to see some of these models taking off in a significant way. And part of the reason I’ve been focused on health care is that it is a basic infrastructure issue, and it can be a backbone of a country in a number of ways.

There aren’t many industries that are as pervasive throughout a country as health care is. You’ve got hospitals and clinics all over the country. And there are examples of organizations that are starting with basic health care, and then they’re adding other components to it, like a convenience store, to help fund the other things they’re doing. And when you think about it, you also have this distribution network that is set up for health care, but that once established can start playing an important role in the development of other sectors of the economy.

Another example is energy. It is a huge challenge when you don’t have a reliable source of electricity. So a lot of health care providers are coming up with creative solutions, like using the manure from their livestock to provide electricity to their facility. And it’s not that they’re trying to be green, it’s that they have no other choice. So if health care institutions are able to develop solutions like that, think of the implications. If they’ve developed a reliable source of energy in that community, others can start tapping into it too, and they can use the same methods that are developed by the health care provider.

So it could be energy, it could be convenience stores, it could be water supply – I don’t even know what all the possibilities are. But there are all sorts of things that are important to the development of a local community that could start with the health care system, just because the health care system needs them. Once it develops there, there could be spillover effects in other industries and markets that could be appreciable.

And with profitable health care models, as the population develops and becomes healthier, the health care system will also bring some affluence to the local community. As that develops, the business sector can develop more effectively. So I think there’s real hope for significant change to take place in some of the poorest parts of the world in the next 20 years.

Entrepreneurship, Health Care
Base of the Pyramid, health care, public health, rural development, social enterprise