Sector Drilldown: Healthcare Thursday, 9 May 2013 Panelists: Stephen MacMohan, Principal Director, The George Institute for

Global Health Amir Khan, Director, Glocal University Lee Poh Wah, Chief Executive Officer, Lien Foundation Josephine Price, Director, Village People Project John Forsyth, Group Managing Director, Viva Healthcare Summary: There is a gap and a need for innovation and risk-taking in the development of the health sector. There seems to be a general expectation that healthcare is a government-provided public service, which has left three billion of the poorest four billion without essential healthcare. Problems arise where there is a lack of adherence to standards and a lack of quality control, causing a large variability in the quality of care. A lack of financing schemes then requires out-of-pocket payments. As a result, the local health industry loses credibility and its patients to health tourism. This sector is in need of development of new models and systems that can lead radical changes, lower costs, new technology-driven tools, financing schemes, and the development of a pharmaceutical industry that can thrive on low margins and high volumes. The call-to-action for venture philanthropy is to support early stage development of health projects where the time-to-market needs to be as short as possible. These models need mentoring and funding to iterate on tools and continually lower health costs. In this session, panelists spoke about a variety of ways to look at improving health and taking risks to look for a model that works. Their examples included projects that supported preventive care, localizing services, technology that supported more efficient and effective care, and developing tools that reduced harm to the patient. Amir saw a gap in how the health sector lobbies for health funding and sees a lack of investment from governments, particularly in comparison to the advocacy in education. The private sector and the government cover almost all expenditures in the health sector. Funding in health happens through discussion on specific health conditions, illustrating the specific gap, and communicating progress on the KPI. Poh Wah of Lien Foundation discussed several health models they have invested in to improve the quality of care. For the National Cancer Hospital in Hanoi, they found an overly subscribed hospital without clean water for patients, families, and surgeons. To improve health outcomes and to support these families, they focused on providing clean water to the hospital. In the area of end of life care, the Foundation advocates better palliative care by creating awareness, research, and training. Third, through electronic medical record systems, kiosks, and iPads for home care teams, they are building capabilities for clinical information coordination for seven nursing homes that have 20 percent of market share. Moreover, investing in the development of IT systems allowed their teams to care for more people. Josephine talked about how Village People Project started in rural townships where baths were hard

to access, with 1 bathhouse serving 25 townships. The lack of bathing can cause higher incident of chronic infections. Village People Projects solution is building community bath houses. Each bathhouse cost 250 RMB to build, with solar powered generators, and has operational costs of 2.2 RMB per shower. They charge 5 RMB per shower. It is free for kids in order to inculcate in them the habit of bathing. This allows the community to shower once a month, instead of once a year. John said Viva Healthcare has 14 health care companies in 10 countries, with different models and products in different markets. They see that there is a place for every kind of provider. Their focus is on the aspiring middle class in emerging and frontier markets, and not the poor. They have closed 50% that had a low return, intensive resource investment, or challenging barriers. It is a high-risk business, with a high likelihood of failure. But when they find the right set up, there is a high impact, he said. Examples of Vivas businesses: In Kenya, Viva focuses on specializing in maternal health clinics. In Indonesia, Viva Generic is a chain of 240 pharmacies outside of major cities. It started 2 years ago and is aiming to add on a diabetes management one stop shop. In Vietnam, Viva is building poly-clinics with about five physicians each. Vietnams licensing process is challenging, John said, and Viva has had to approach the Ministry of Health to proceed. In Hyderabad (India), Vivas operations earned more from its pharmacy than its clinic. Foreign-owned companies cannot own pharmacies. So that operation has closed. In emerging countries, the panel suggested that both governments and consumers are willing to spend more on education than on health. While education is often talked about as being underfunded, health may be much more so. Development of better tools and technology can be beneficial across geographies and it is possible for philanthropists to lead in some markets and not all. One of the audience questions focused on corruption and the need to work with governments. In response, Amir said there is anticipation that corruption increases with an influx of funding. Poh Wah talked about how government doctors and officials are paid very little and hence, encountering corruption is likely. Hence programmes should be transparent about the situation with donors. Another question focused on what gaps venture philanthropy fills that traditional philanthropy does not. Amir was of the view that the sector needs innovation and research to develop technology that can work with more limited resources. Venture philanthropy can work in areas that are neglected, he said. Josephine, on the other hand, talked about how venture philanthropy can help take programmes beyond their initial set up through operationalising. Wrapping up, Stephen said that there is a general expectation that governments will provide healthcare series. The reality, however, is that they have not funded the sector well. As such, venture philanthropy can invest in services, drug development, technology and in solutions that fit specific markets.