Innovate or Die

About a year ago, I reviewed one of the more interesting foundation-funded projects in global health.  Thanks in part to the fortunes amassed by the former robber barons, Bill Gates and John Rockefeller, the Center for Health Market Innovations (CHMI) started in early 2010 and “identifies, analyzes, and connects programs working to improve health and financial protection for the poor.”  In my post (“Market Tested and Not-Yet Approved,” 9/7/10), I noted that CHMI focused on the identifying function, that connecting function was not likely to happen (after all many of the “innovators” are competing for the same grants and have their own agendas), and the analyzing function was the most valuable but needed strengthening.  The central feature of the Center is a database of profiles of organizations, programs, and companies (yes, for-profits are welcome) that CHMI says allows users to “connect,” organizations to self-promote (since all entries are self-reported), and “donors and investors … to identify candidates for funding,” but I think its real utility is as a framework for comparing the effectiveness of the programs.  Such comparative performance measurement is sorely needed for the organizations to know if they are meeting their goals, to learn from others what may improve their performance, and to justify the public and private funding they receive.  A basic lesson of business is:  if you don’t measure what you do, you can’t get better.

CHMI recently released its first annual report (Highlights:  2011), and I was pleased to find that one of the highlights was the launch of a Reported Results Initiative (Initiative).  The strengths of the initiative are that the performance measures are well-thought out (they include decreasing costs, increasing access and quality, achieving a health output, even “sustainability,” see the self-reporting Template) and that the database’s results category is featured on the home page.  But its weaknesses are that participation is voluntary, complete answers are not required (the most complete are apparently from publications or reports to donors), and evidently, CHMI is trying to figure out what to do with the data.  From the Highlights report, page 24:  “[while] it is also important to understand which programs are actually ‘working’- improving the access, quality, and affordability of privately delivered health care for  the poor … [the results of the] initiative will inform [sic] longer term activities such as the development of program performance metrics and the facilitation of formal program evaluation.”  How?  When?

I visited the database and used the nice browsing tools to check out the programs that reported their results and noted:

  • only about 10% of all programs reported results (about 100 out of 990);
  • very few of the reports are complete;
  • the average operational age of reporting organizations is about nine years, which looks longer to me than the larger group’s average;
  • 14 of the 100 are actually geographic variations of the same program (which implies to me that it is a successful franchise and any other programs offering similar services should emulate it);
  • there are nine private, for-profit organizations but none seem to be reporting typical measures of for-profit success (revenues, investors, etc.);
  • most are dependent on donors (45/100), a slightly smaller percentage than the overall group (515/909);
  • other than donor support, nine are supported by membership fees, three by “other third party (e.g., debt, equity),” and 23 by revenue; and
  • only six provided “evidence of sustainability,” I guess, an implied admission of unsustainability by organizations supported by grants or government appropriations.

The majority of the Highlights report summarizes the data in various ways (by location, type, health focus, funding, and organization) and, of interest to me, reports on the way in which 200 of the organizations provide financing for health care, either for their operations or to their customers.  CHMI identifies five methods:

  • government health insurance;
  • micro and community health insurance;
  • cross-subsidization (redirecting revenue from wealthy patients to cover those unable to pay);
  • vouchers; and
  • government contracting.

Also of interest to me is the chapter on “Five Innovative Models” which, since it is not stated, I take to mean “five organizations whose operations are worth emulating.”  Three organizations/programs are profiled in each category, and, briefly, they are:

  • low cost retail pharmacies (all are for-profit);
  • affordable primary care clinic chains (all for-profit);
  • voucher programs (two are public-private, one government);
  • telemedicine outfits (two non-profit, one for-profit); and
  • health hot lines (all for-profits).

It looks to me like these may be models for successful health care businesses.

Clearly, CHMI is gathering a vast amount of potentially useful information about the ROW health care markets, that is, those outside the overly-exploited and -expensive markets of the “developed” countries.  I’ll be using it for business planning purposes and hope others do, too.  And, as I recommended in my first posting, CHMI may also consider adding someone with business experience to their panel of advisers, or even hiring someone with a business background, to facilitate and accelerate the identification, emulation, and growth of those programs that work and are self-sustaining.



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