Al Hammond's blog

eHealth: Transforming Global Healthcare Delivery

Al Hammond — Fri, 08 Aug 2008 07:40:48 -0500

I've been spending the week at one of a series of 8 conferences on eHealth, brainstorming with other entrepreneurs, venture capitalists, health informatics specialists, and policy experts. The setting could hardly be more lovely--the Rockefeller Foundation's Bellagio center looking down on the deep waters of Lake Como and looking up at the sheer granite cliffs of the Alps.

The scale of the scenery seemed to match the scale of our task, to figure out how to unlock the eHealth marketplace—that is, unleash entrepreneurship and market forces combined with technology—to provide better health care, or for many rural communities in developing countries, any health care at all.

The barriers are well understood. Very limited access to health care facilities in rural and many peri-urban areas. An absolute dearth of doctors, nurses, and pharmacists in rural areas. Low quality care—few diagnostics, widespread fake drugs. High costs for drugs, doctors, and hospital care that can bankrupt poor families. Can technology help—especially information and communications technology? And how to jump start its use in poor countries when even rich countries have not yet adopted systematic eHealth strategies?

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Trust, Mobile Banking, and Urban-Rural Remittances

Al Hammond — Thu, 29 May 2008 10:45:02 -0500

During a recent workshop at the M-banking conference in Cairo, Egypt, a number of practitioners and interested parties discussed the state of mobile banking or-more properly-mobile transactions. One of the interesting insights that emerged comes from the experience of the Vodafone company Safaricom in Kenya with its M-PESA mobile transaction service.

Launched in March, 2007, the service has been an astounding success, reaching 2 million customers by May of 2008. New field research by Olga Morawczynski on use of M-PESA's by low-income customers in the Kibera slum of Nairobi-now posted in our resources section-sheds some light on both the how and why.

The dominant use of M-PESA by Kibera residents is to transfer money home to their native rural villages, underscoring the importance of internal remittances in virtually all developing countries. A user registers with an M-PESA agent, who establishes an electronic account for the customer.

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Taking BoP Strategies To Scale Pt. 5: Concluding Thoughts

Al Hammond — Mon, 19 May 2008 08:18:42 -0500

This post is the last in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I address the six preceding guest posts that commented on this strategy and offer some concluding thoughts.

I welcome these thoughtful comments on the transformative sector model I am proposing to scale service delivery to the BoP. Sagar Gubbi thoughtfully extends the sector-based scaling model. His examples illustrate the richness of potential solutions that are springing up and that can be learned from and replicated across a sector. I think he is correct that any transformative model will need adaptation to local conditions and policies. But mostly his examples encourage me in pushing ahead to implement the approaches I have outlined. The comment by Paul Rigterink on the potential of using a pharmacy platform to also distribute veterinary medicine and thus improve livestock supplies underscores the synergies that a sector approach can generate.

John Paul suggests that the sector approach can adapt to local conditions by integrating existing entrepreneurs or service providers, which is certainly worth considering. In one country, we and our local partners are looking into partnering with and upgrading local outlets that sell medicine informally.

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Taking BoP Strategies To Scale Pt 4: Building New Business DNA for the BoP

Al Hammond — Fri, 09 May 2008 14:49:52 -0500

This post is the fourth in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I discuss the common characteristics that make BoP business models in different sectors scalable solutions.

Searching for Transformational Models in New Sectors

If building the missing infrastructure could transform rural connectivity and health care, what about access to clean drinking water, especially for smaller rural and peri-urban communities? That's a proposition that WRI and Santa Clara University's Global Social Benefit Incubator are researching. There are some promising models in the field, such as Water Health International, that are beginning to scale. There are a number of additional enterprises, five of which will be mentored intensively in this year's incubator class. There are some promising new filtering technologies that use less energy than existing technologies, as well as other interesting approaches that have yet to be applied in emerging markets; we are undertaking a detailed comparison of both existing and newer technologies.

A number of community-initiated business models have produced good results, but they aren't easily replicable and don't scale. So we are analyzing both franchising and public-private partnership business models. Many of the elements that make rural connectivity and rural health care promising appear to be present in the water sector. It is too early to say what will emerge out of the research, but the scale of the unmet need is clear - a billion people without access to clean drinking water.

And after water, why not BoP energy? Our preliminary thinking is that there at least three sub-sectors of interest: Off-grid power and lighting, from mini-hydro to LED lighting; efficiency improvements in energy-using devices, such as cook stoves and motorbikes; and locally-grown, produced, and consumed biofuels that don't compete with food. We know of prototype enterprises and projects in each sub-sector, some of them already beginning to scale. We believe that the recent, rapid evolution of technology options will continue and can be adapted for the BoP. And we know that the unmet need is very large.

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Taking BoP Strategies To Scale Pt. 3: World-Class Healthcare for the World’s Poor

Al Hammond — Thu, 08 May 2008 08:16:48 -0500

This post is the third in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I describe how this strategy could transform the health sector in emerging economies.

Last Mile Health Care Delivery

Talk to people in the rural communities of southern Mexico, in the new urban communities on the southern edge of Bogota, or in almost any village in rural Africa about getting decent access to healthcare, and their answer is the same: it usually costs more to get to a clinic, a doctor's office, even a pharmacy, than the cost of the service itself. In Bogota, most of the government-supported health services are in the north of the city, such that it can cost people in these new refugee communities a day's work plus bus fare across town and back to get help. Lack of access defines part of the last mile health care dilemma, and that means distributional business models, such as franchising, can be important.

Talk to Health Stores in Kenya, an enterprise trying to staff small pharmacies with nurses, and another part of the problem becomes clear: the sheer lack of doctors, nurses, and pharmacists in emerging markets. There are not anywhere close to the number of skilled professionals needed to cover rural areas, and these health workers overwhelmingly refuse to live either in rural areas or in urban slums. So technologies, organizational models, and legal changes that enable local diagnosis and remote practice by doctors and pharmacists could play a critical role.

Still a third factor leaps out from the data in The Next 4 Billion report that shows clearly that low-income households spend between a third and a half of their out-of-pocket health care expenditures on drugs. They typically don't go to doctors or clinics or hospitals, but rather to pharmacies or some other source of medicines and seek to self-medicate. That means they often get a guess as to what's wrong with them instead of a diagnosis.

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Taking BoP Strategies To Scale Pt. 2: Connecting Rural Communities

Al Hammond — Wed, 07 May 2008 08:31:17 -0500

This post is the second in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I tell the story of a rural connectivity pilot project; an example of this new model for development in action.

A Last Mile Model for Rural Connectivity

Son Tay commune, Quang Ngai Province. I was sitting across a table in a remote rural outpost of Vietnam, negotiating (via a translator) with the manager of a local radio station about access to his tower. He asked a series of technical questions and seemed satisfied with the answers, but then he wondered aloud: "Can we get Internet access here?" He didn't just want it for the radio station, it emerged, but for the surrounding small community - even though nobody there yet owned a computer. The manager understood that internet access could help transform their opportunities. And when we agreed to mount a small antenna to serve the community, the tower was ours.

The negotiation was part of a two year long process to pilot a novel approach to rural connectivity. It involved building an advanced, broadband network in three communes (groups of villages) in a very poor province in central Vietnam to provide Internet-based phone service and Internet access. Quang Ngai Province has no Internet access for its million-plus population outside of the provincial capital, and phone ownership is about 3 percent.

But the province does have an AUSAID-funded rural development project (RUDEP) that had built trust by doubling farmer's incomes in many communes, and optical fiber to every district capital (owned by the national electric utility, EVN, which also owns a mobile phone company, EVN Telecom). Ultimately all of these became partners in the effort, as did USAID's Last Mile Initiative, Intel and other equipment providers.

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Taking Base of the Pyramid Strategies To Scale Pt.1: An Introduction to Transformative Sector Strategies

Al Hammond — Tue, 06 May 2008 08:03:26 -0500

This post is the first of a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I introduce the conceptual framework for this innovative poverty-alleviation model.

"It doesn't exactly keep me up at night, but I do think about it a lot." Jacqueline Novogratz, head of Acumen Fund, and I were talking about getting to scale - about expanding private sector business development and investment aimed at empowering and providing basic services to the poor to the point of making a real impact.

I felt exactly the same, and I've had similar conversations with colleagues at Santa Clara University, at Ashoka, at private investment funds, and elsewhere. Ever since we finished our report on The Next 4 Billion, the numbers haunt me. How do you meet the unmet needs of four billion people?

Convincing a dozen multinational companies to take this market seriously isn't enough. Doubling or quadrupling the capacity of the organizations that mentor social enterprises and BoP-serving small and medium businesses won't do it either. Even investing hundreds of millions of dollars in individual enterprises in this sector doesn't guarantee success. I think the goal has to be to transform whole sectors in ways that catalyze mainstream investment in BoP economic activity and unleash market forces. To get there, I think we need a more systematic approach.

A Next-Generation BoP Approach: Transformative Sector Models

In this and subsequent posts, I'm going to suggest one such approach that I and my colleagues at WRI and elsewhere have been developing for several years, and that we are now starting to take into the field. I'm proposing this scaling model tentatively, and asking for feedback and for comparisons to other scaling models.

The approach builds on the perception that there is a growing amount of public and private capital available to fund BoP strategies - almost every month now I hear about a new BoP private equity fund - and the conviction that the bottleneck is a shortage of solutions in the form of investable enterprises. In venture capital jargon, what's missing is the "deal flow." And I'm suggesting that the way to create that deal flow and unleash a rising tide of investment is to focus not on individual entrepreneurs, not on individual companies, but on economic sectors.

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Utilities at the Base of the Pyramid

Al Hammond — Sun, 04 May 2008 19:12:32 -0500

It was sunny, and tempting to sit outside at the University of San Diego to enjoy the weather. Inside, however, a group of global practitioners and scholars - organized by Patricia Marquez of USD and Carlos Rufin of Sussex University and Babson College - were discussing the role of utilities at the Base of the Pyramid. (See 'attachments' at the end of this post, where I have uploaded the meeting's full agenda as a PDF.)

Utilities provide basic services - telecommunications, water, power - that are essential to people's lives and increase their productivity. But a decade ago, many utilities in emerging markets were failing—service to low-income communities was poor, and many of their customers simply didn't pay or acquired the service informally.

The picture that emerged in San Diego, however, was more optimistic. A number of utility companies have engaged BoP communities and increased their willingness to pay, in return for investment that improved service quality. Codensa, a power utility in Columbia with 400,000 non-paying customers (out of a total of 2 million), reduced non-paying customers dramatically. Manuel Bueno has an excellent analysis of the Codensa case in his post, "The Codensa Case: Electricity and Related Services for the BOP in Colombia," from December, 2007. And mobile phone companies improved service and access to service dramatically compared to legacy fixed-line telecom companies (sometimes another branch of the same company).

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Making Biofuels Work for the BoP in Haiti

Al Hammond — Wed, 09 Apr 2008 12:36:58 -0500

A new paper posted in our resources section gives a specific regional example of the potential benefits of biofuels for the BoP (this adds to our previous discussions on the subject here, here and here).

The paper - by Kathleen Robbins of the GreenMicrofinance Group - tells the story of a small NGO, aided by GreenMicrofinance and an enlightened multinational company, that is piloting an environmentally sound and economically sustainable approach to biofuels. The key element is a jatropha nursery that is incubating young plants and teaching a group of Haitian farmers how to grow them.

The oil squeezed from the plant will be burned in lamps and cookstoves and the remaining seedcake used as fertilizer. As supplies grow, a small refinery will be built to process the plant oil into biodiesel-and the local mobile company is willing to buy it to fuel the diesel generators on their cell towers.

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New Report: How to Make Mobile Phone Banking Secure

Al Hammond — Thu, 06 Mar 2008 09:54:05 -0500

Mobile phone banking is already fully commercial in the Philippines, South Africa, and Kenya. It's about to happen in perhaps a dozen additional countries. With more than 1.5 billion mobile phones deployed in the developing world, the potential market is large and growing. The need is equally apparent-most of the BOP have no access to modern financial services, despite the success of microfinance.

So what is keeping this from becoming a revolution in financial services for the poor? In a word, regulatory hesitation. Central banks-and behind them, the U.S. Treasury-want to be sure that the democratization of financial services does not also lead to widespread money laundering and consumer fraud. And a key part of current security systems-the SIM card that gives each phone a unique ID-is device-based and potentially hackable.

Today we report new research that assesses the potential of biometric security systems-user-based, not device-based-for mobile phones. It turns out there is an obvious candidate, and that phones with this technology are already in commercial production.

I won't give away the story-read the report, Biometric Security for Mobile Banking-but the cost of including this technology in low-cost GSM or CDMA phones appears to be low, well within the buying power of most of the BOP. The report also places this new capability in the context of broader technology trends that could extend the reach of mobile phones-and mobile banking-into rural areas.

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