Is it possible to make healthcare in the developing world ‘cheaper than free’ while delivering the h

Rebecca Irani
Jul 20, 2016
2 min read

One of the new sustainable goals is to ensure healthy lives and promote wellbeing for all at all ages. The 20 top OECD countries spend $3-7,000 per capita annually on health while in the 10 worst off countries, spending runs at a paltry $30-50 per year. [i]The lack of adequate funding for community health workers and access to medicines across the highest child mortality countries represents a towering obstacle to improving health outcomes.

A new and quick to implement model is offering healthcare at less than $2 per person annually. The private-sector model established by Living Goods, a social enterprise launched in 2008, focuses on needs that drive 70 per cent of child deaths where the solutions are simple and affordable and on products that are difficult to access. It empowers micro-entrepreneurs to deliver life-saving products to the doorsteps of the poor in their own communities - a sustainable entrepreneurial platform.

A soon to be published five-year randomized control trial (RCT) from MIT, Yale, and Stockholm University has just been completed. Of significance, the RCT results demonstrate that charging reasonable fees is consistent with driving significant reductions in child mortality. And importantly, the data show that the clients are equally distributed across economic strata so the model does not bias serving the better off. The study was independently sponsored by the Children’s Investment Fund Foundation IPA, and surveyed over 8,000 households over 5 years across 214 villages.

How can a social enterprise be this nimble and achieve this cost effectiveness?

They offer an always-in-stock distribution platform for products like malaria and diarrhea treatments, deworming pills, anti malarial bed nets, safe water filters, and fortified foods they provide so target communities will always have what they need at a price that is cheaper than free because the door-to-door delivery saves them time, money on transportation costs, and ensures that they do not waste money on counterfeits. Living Goods also offers product delivery using delivery drivers, saving agents money for transportation.

They train and support networks of health entrepreneurs from local communities who earn a reasonable margin on the life-improving products, and are paid for results. They also provide a ‘business-in-a-bag’ to the micro-entrepreneurs with all the tools they need to launch a thriving franchise. The kit includes a branded duffle bag, uniforms, signage, a display locker, thermometer, smartphone loaded with Living Goods apps, and basic health and business tools. Indeed, they were one of the winners of the 2014 GSK, Save the Children Health Innovation award.

Like any wholesaler, Living Goods earns margin on the products sold to agents. In this way the system recovers 100 per cent of the cost of medicines, agents earn a motivating income, and Living Goods earns wholesale margins to cover a portion of the costs to support the platform. Agents who serve their customers well over time earn loyalty, repeat business, make more money, and drive significant health outcomes.

Not only are healthcare products being provided, but other life essentials. In Uganda, estimates show Living Goods clean cooks stoves save families up to $100 a year on charcoal and solar lights can save $20-65 per year on kerosene and mobile charging.

[i] OECDhttp://www.oecd.org/els/health-systems/