Given the billions of aid dollars spent on improving the health systems of Africa, it may surprise you to learn that the majority of Africans still turn to the private sector for their healthcare. Not because the private sector provides great service or cheaper prices. But rather, for many, it remains the only option. Public health centres are all too often understaffed and short on important supplies. The private sector may be filling the gap, but it is not solving the problem. Private healthcare providers are plagued by excessive fragmentation and little to no oversight, resulting in high prices and poor quality. The retail price for basic, essential medicines is often over 300% of the manufacturing cost. Store shelves are stocked with expired and counterfeit drugs. And poorly trained, poorly monitored outlets are the norm. In short, health systems across Africa are chronically sick.
Sounds pretty grim, doesn’t it? It is. But healthcare in Africa is also an enormous opportunity. Excessive fragmentation, high prices and low quality are the telltale signs of a market ripe for radical disruption. Dysfunctional markets provide fertile ground for innovation. The opportunity to reinvent healthcare in Africa is there for the taking. And social entrepreneurs are leading the way.
Powerful, mission-driven models focused on market-based solutions are disrupting broken health systems throughout the developing world. The world’s largest eye care provider, Aravind Eye Care System, built a fully self-funded model for eye care by adapting the corporate management practices of McDonald’s and an innovative cross-subsidy model of tiered pricing. Aravind has treated more than 32 million patients, with 60% of them paying very little or nothing at all. LifeSpring Hospitals uses a similar approach to achieve sustainability and scale for its chain of high-quality maternity hospitals. World Health Partners creates market efficiencies by organizing local resources and leveraging telemedicine to connect rural patients and care providers to skilled care professionals. At Living Goods, the social enterprise I founded, we harness the buying power of large networks of franchised agents to deliver lower prices on high-quality health products and services to the half a million poor customers we serve in Uganda. In addition, we use mobile technology to track impacts and drive demand for health products and services, all the while reducing the costs to market and monitor. At scale, these models will improve the quality of life for millions of healthcare consumers and reduce the resource burden on public health systems.
As African economies continue to improve, the demand for healthcare across all sectors is sure to grow. The International Finance Corporation estimates that the market for healthcare will increase to US$ 35 billion by 2016. Those who create, support and invest in powerful new models stand to benefit – as do the millions of healthcare consumers all across the continent.
Author: Chuck Slaughter is Founder and CEO of Living Goods
Image: A doctor attends a child in Nigeria REUTERS/Afolabi Sotunde