Sustainable Delivery of Essential Healthcare through Micro-franchising

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Sustainable Delivery of Essential Healthcare through Micro-franchising

Kenya
Project Summary
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The Sustainable Healthcare Foundation's micro-franchising model addresses poor access to essential healthcare for rural communities and those living in urban slums. We work with professionally trained health workers to assist them establish clinics in their communities providing a standard list of health products and services. The Health workers are subject to franchise controls to assure quality, affordability, accessibility and availability, and also receive business support in form of micro-loans, training, reduced prices on products, mentoring and supervisory support. The franchised outlets are called CFW (Child and Family Wellness)shops or clinics, and are all branded to have a similar look. The organisation designs community health out-reach programs for health education and promotion. These are managed by the franchisees in their communities. CFW outlets sell both curative and preventative health products, and through community out-reach, are engaged in interventions for improved reproductive health, maternal and child health. These activities raise the profile of the CFW outlet and the health worker in the community, whilst also leading to improved health outcomes for the community. In this way, health workers, as independent business owners, are assured of a good income that can be sustained for the long term.

About You
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Your idea
Focus of activity

Healthcare Delivery

Start Year

1999

Positioning in the mosaic of solutions
Main barrier addressed

Limited reach of healthcare infrastructure

Main principle addressed

Adopt market-based models as a scaling-up strategy

Innovation
Description of health product/service offering:

The Sustainable Healthcare Foundation's micro-franchising model addresses poor access to essential healthcare for rural communities and those living in urban slums. We work with professionally trained health workers to assist them establish clinics in their communities providing a standard list of health products and services. The Health workers are subject to franchise controls to assure quality, affordability, accessibility and availability, and also receive business support in form of micro-loans, training, reduced prices on products, mentoring and supervisory support. The franchised outlets are called CFW (Child and Family Wellness)shops or clinics, and are all branded to have a similar look. The organisation designs community health out-reach programs for health education and promotion. These are managed by the franchisees in their communities. CFW outlets sell both curative and preventative health products, and through community out-reach, are engaged in interventions for improved reproductive health, maternal and child health. These activities raise the profile of the CFW outlet and the health worker in the community, whilst also leading to improved health outcomes for the community. In this way, health workers, as independent business owners, are assured of a good income that can be sustained for the long term.

Description of innovation:

Communities rely on either public facilities, mission facilities and private practitioners for provision of healthcare. The public facilities are limited in number, may be at some distance from the community, and require lengthy waiting times sometimes with poor availability of products. Mission sector outlets are considered to be of good quality and affordable, but may not be available in the community. Private practioner outlets are relatively few, are considered to be expensive, and not usually reliable as many times they are not open on a full-time basis. Our approach is geared to ensuring that CFW outlets are placed at market centres close to where the communities live, are open regularly on a full-time basis, and have to adhere to franchise standards for quality and pricing of products and services. Franchising is a tested, successful business model, and we are applying it in provision of essential healthcare to under-served populations. Whilst other healthworkers are employees, our franchisees are business owners, and are highly self-motivated to apply themselves and achieve good returns and success in their ventures by serving their communities. Their rewards for the work they do extend beyond basic monetary remuneration, and include other social/status benefits.

Operational model:

Our activities are focused on support for CFW clinic franchisees. This involves identifying and establishing new CFW outlets, initial training and continuing education; supervisory support; logistics support for procurement, supply and delivery of products; health promotions, technical support for clinical services; interactions with other partners e.g. the Ministry of Health and community groups. The Sustainable Healthcare Foundation (SHEF) head office is situated in Nairobi, the capital city. Senior technical staff are located here, and two regional offices are established in the central and western parts of the country. The regional offices hold warehouses for products, and field officers are based there. Field officers visit outlets at the community levels according to schedules agreed with head office. Logistics officers at the field warehouses receive orders for products and arrange for deliveries directly to franchisees. Franchisees also come to the regional offices at any time in need to purchase products or seek other forms of support. Field Officers are available for franchisees at all times and can usually be reached through short-message texting on mobile phones. Currently there are 65 CFW outlets, all carefully selected to be in locations that serve low-income rural and urban populations.

Human resources:

A Board of Directors with expertise in Pharmaceuticals, Community Initiatives, Law and Finance supports the Country Director. Liza Kimbo is the Country Director and runs the Kenya operations. She has a masters degree in Health Systems Management and an MBA. She has worked in this position since the organisation was registered in 1997. The Senior Management team comprises 5 technical and professional staff, including two pharmacists, one medical doctor with public health specialisation, a Certified Public Accountant, and Trainer. 4 Health Services Field Officers are trained as nurses, with another 3 Field Officers having business management and sales skills. In total the organisation has 28 members of staff.

Key operational partnerships:

Our key partnerships for operational delivery of healthcare is the Kenya Ministry of Health, particularly the Division of Malaria Control. The Ministry of Health sets policy, and we participate in their technical committees. Over the last two years we have worked closely as the country prepared to change malaria treatment guidelines. About 30% of the patients we see suffer from malaria, or purchase insecticide treated bed- nets to prevent malaria. SHEF has supported the work of the Ministry of Health by chairing the Coordinating Group for NGOs working on malaria in the country. The District Medical Teams of the Ministry of Health are responsible for inspection and licensing of outlets, and we also call them in to participate in training and continuing education for the franchisees. In this way, we contribute to the meeting of public health targets in the communities where we work. On the business development side and for business technical skills we have partnered with the Acumen Fund and the Grassroots Business Initiatives Group at the IFC. These two partners have been especially beneficial to us in refining the business model and addressing issues for scaling up.

Impact
Financial Sustainability:

<ul><li class="entry-label">Fees charged to clients?: <span class="entry-text">Yes</span></li><li class="entry-label">How do you assure affordability?: <span class="entry-text">We procure only good quality generic products and negotiate for the best prices on all health supplies. By making deliveries directly to franchisees, the organisation meets a large cost element for delivery of healthcare, which is passed on as savings to the customers. As CFW outlets are closer to communities, we save the patients the cost of time and travel to seek healthcare at more distant locations. </span></li><li class="entry-label">Earned incomes as a percentage of operating costs: <span class="entry-text">8%</span></li><li class="entry-label">Other funding sources: <span class="entry-text">At the moment the organisation is not self-sustainable. Donor funds are relied on to fund the initiative at this stage of network growth. </span></li><li class="entry-label">Strategy for long-term sustainability: <span class="entry-text">The strategy is three-fold: 1. Ensure a high level of profitability of franchised outlets, aiming at 80% being profitable each month. 2. Expand and increase the number of outlets to reach 200 by 2008 and 500 by 2012. 3. Continuously review unit returns and build economies of scale for the network to achieve sustainability in the long-term.</span></li></ul>

Current and Future Impact:

<ul><li class="entry-label">Total number of clients: <span class="entry-text">over 800,000</span></li><li class="entry-label">Clients in the past year: <span class="entry-text">435,000</span></li><li class="entry-label">Percentage of low-income clients: <span class="entry-text">100</span></li><li class="entry-label">Impact: <span class="entry-text">Our community out-reach is focused on preventative healthcare. Examples of the types of promotions we run are: - water treatment to promote use of clean water to avoid diarrheal diseases - bed-net promotions for prevention of malaria - growth monitoring and immunisation campaigns for child health - hand washing campaigns with free soap to encourage cleanliness - bed-net re-treatment campaigns for prevention of malaria - hygiene and birth control product campaigns to educate the community, encourage use of general hygiene products e.g. toothpaste, toothbrushes, and birth control products including condoms</span></li><li class="entry-label">Overall "market": <span class="entry-text">In a country of 30 Million people, about 57% of Kenya's population is classified as poor, and lives more than one- hour walk away from a public health facility. This translates to at least 17 Million people that could be served by the CFW Clinics in Kenya alone. At 200 outlets, we estimate that we will reach about 1.7 Million people, thus there is significant growth potential. Outside of Kenya, most developing countries have similar issues related to poor access to essential healthcare, and we already have several other groups in other countries interested in adopting the model.</span></li></ul>

Scaling up strategy:
Stage of the initiative:

<i>Scaling Up</i> stage.

Expansion plan:

In the next three years we aim to increase number of outlets to about 225, with an average increase in sales of over 100% compared to current levels. Between 2004 and 2005, we were able to increase sales by 120%, through increased focus on promotions and community out-reach. We will maintain this strategy to continuously review the product and services offered, and improve our marketing strategies for higher returns.

Origin of the initiative:

Scott Hillstrom, a philanthropist for many years and Managing Partner of the Guardian Law Group in Minneapolis USA founded the Sustainable Healthcare Enterprise Foundation (SHEF, now HealthStore Foundation USA) in 1997. Scott dedicates himself to actively work at reducing the needless deaths and suffering of children around the world. After meeting with Dr. Eva Ombaka, a pharmaceutical advisor to the World Council of Churches in Kenya, Hillstrom and Ombaka formed SHEF, modeled on the principles of a franchise system. SHEF was founded as a non-profit organization, while the individual franchise outlets operate as for-profit enterprises. The foundation operates as Sustainable Healthcare Foundation in Kenya, where it is registered as a non-Governmental organization, and HealthStore in the USA, now engaged in supporting the development of franchise networks in other parts of the world.

Sustainability
Policy change:

Currently, nurses must practice for ten years post qualification in order to get a license for private practice. This significantly reduces the pool of available nurses for the non-public healthcare sector. A policy that supports nurses to establish private clinics within associations such as the franchise network with about 5 years post-qualification experience would accelerate the provision of healthcare to needy communities.