Weekly Round-up 11-20-11: HealthPoint’s Push to Meet, Exceed Expectations
I hope you’ve had a chance to read the two-post by Sadna Samaranayake this week on the Aravind Eye Care story. (If not, check out part one here and part two here). What amazed me the most was the persistence of founder Dr. Govindappa Venkataswamy (Dr. V) and his family. After all, Aravind’s model took the better part of three decades to hone before it could be scaled, let alone reach profitability.
Dr. V was forging the Aravind concept well before the term “social entrepreneur” entered the popular lexicon. But something changes when your industry, your profession, or your sector acquires a name. Regardless of what name you attach to this space, the answer to the question of what’s in a name? is simple: Expectations – and lots of them.
When will your venture reach scale? Where and how will you see impact? Where are the profits at the end of your elevator pitch, replete with breathless superlatives of social change? If there isn’t an answer today, well, there may not be one down the line – or so the thinking would follow.
With that in mind, it was good to hear from Healthpoint Services, which over the spring, rounded a two-year anniversary – and a busy two years it’s been. In that time the venture, comprised a network of medical clinics (E Health Points or EHPs) and clean water access points, has provided 22,000 medical consultations, filled 28,000 prescriptions, and provided more than 50,000 people a day with drinking water. This growth has provided the initial clinics with positive cash flow in the first quarter of 2011. It’s mounting evidence to verify the sustainability of a pay-and-use system for health services.
“We hope to overturn several expectations by demonstrating first, that people will pay for high quality services at affordable prices; second, that we can make money at those prices; and thirdly that a multi-service platform is the key to both significant social impact and sustainable (profitable) operations,” Al Hammond, the company co-partner and Ashoka Senior Entrepreneur, told me over email. “We haven’t proven all of those by any means yet-our third party outcome/impact study is just getting underway. But we intend to. We may even overturn recent skepticism about the viability of franchising in the BOP.”
The EHP clinics provide safe drinking water, health care that brings together local, trusted village health workers with modern telemedicine video consultations with distant doctors and specialists. These clinics provide a wide range of diagnostic tests, patient health information that is electronically integrated and maintained, licensed pharmacie.
Hammond notes the company now has more than 90 free-standing water points and eight EHP clinics in the Punjab region of India, and is adding 20 water units per month. It creates between five to eight full-time jobs per village. With the model demonstrated, the company will begin to scale its clinics next year, building on the “water beachhead” strategy. Hammond told me that the expansion is proceeding pretty much in line with plans, as they began scale out this past April.
“We intend to show that we have the business in hand and can manage rapid scale-up, preparatory to increasing the build rate next year and adding new geographies,” he wrote.
Thus far, Healthpoint Services has raised $3.75 million in equity investments from two rounds, plus $600,000 in soft loans from the impact investing community, plus competitive grants and in-kind support from government. To gain additional flexibility to source funds and deliver services, HealthPoint is establishing a foundation in India and taking over one in the United States.
Hammond and partners Amit Jain and Chris Dickey incorporated eHealthPoint in April 2009. Recently, David Aylward, the former director of the mHealth Alliance and an expert in mobile solutions, joined Healthpoint partner Ashoka to help bring together a supporting ecosystem for clinic systems, such as Healthpoint.
The company was honored in September at the Tech Awards gala in Silicon Valley and affiliated with the Center for Science, Technology, and Society at Santa Clara University, along with 14 other global Laureates developing technologies and innovations to improve the lives of others. In July 2011, eHealthPoint won “Saving Lives at Birth Grand Challenge,” organized by a collaborative group of donors seeking the most promising innovations to reduce the risks related to childbirth, including the Bill & Melinda Gates Foundation, USAID, the World Bank, Grand Challenges Canada and the Government of Norway. They plan to invest more than $50 million over five years to support sustainable projects with the potential to have a transformative effect on the lives of pregnant women and their babies in the hardest to reach corners of the world. And in May 2011, eHealthpoint was chosen by the Sankalp Competition for Innovative Social Enterprises Awards as the most innovative and promising health-oriented social enterprise in India this year.
Beyond these prestigious awards … when do they anticipate seeing a profit?
“Being able to predictably get units to positive cash flow is an important milestone; for Healthpoint India to become profitable will take about another year of steady growth, so possibly near the end of 2012 if we raise the required capital in a timely manner and if all goes well,” Hammond wrote.
Dalberg’s Call for Survey Participants
Dalberg Global Development Advisors is working with Harvard Business School’s new “Innovation and Entrepreneurship” course to survey leaders of innovative social enterprises on their recipes for success and views about the sector. The survey’s results will help the next generation of social entrepreneurs and bring urgent issues to the attention of policymakers. Leaders who would like to receive the survey should contact Daniel Altman, Dalberg’s director of thought leadership, at firstname.lastname@example.org. All respondents will receive the analyzed results of the survey and may choose to be acknowledged in the culminating report. Individual responses will be kept confidential.