Global Social Venture Competition: Weighing the Health of Children in Mali

Editor's Note: The following article profiles one of the finalists at the 2009 edition of the Global Social Venture Competition, held last week at the Haas Schol of Business at UC Berkeley.

Around one in five children in Mali dies before his or her fifth birthday. Imagine preventing half of these 117,000 annual deaths with a few cell phones and scales. I interviewed the founders of Pesinet - a new non-profit organization and 2009 GSVC finalist - and I'm excited about the ability of their new micro-insurance program to accomplish just that.

"Around 70% of child mortality is caused by easily treatable illnesses such as diarrhea, malnutrition and malaria," Pesinet CEO Anne Roos-Weil told me. "We are trying to create a culture of preventative care."

To make this culture shift possible, Pesinet harnesses the tailwind of high mobile phone coverage (85% worldwide by 2010 according to the GSMA) and exploding mHealth services with a simple business model. Families subscribe to the service for about $1 per month. Health workers make regular house calls and transmit basic health information via SMS to a doctor who reviews the data, and brings children in if any warning signs are detected.

This sounds like the right approach. While living in Mauritania, I accompanied health workers on a door-to-door polio vaccination campaign. I was struck by two things: first, the ability of the workers to visit an incredibly large number of houses per day, and second, the willingness of households to receive health workers in their homes.

Pesinet should be able to take advantage of this dynamic across most of West Africa, and it already has 500 paying customers in its pilot program after one year of operations. The biggest challenge will be making ends meet at such a low price. Anne estimates the break-even point for a single site at around 600 clients. With four health workers ($70/month each), one doctor ($140/month), and one administrative staffer ($100/month, my estimate), that's already $520 per month in costs, which leaves a thin $80 per month to cover other costs including cell phone airtime and transportation.

Charging for pharmaceuticals or increasing the monthly fee could improve the balance sheet, and data on Mali's private health care spending indicates that the average Malian is already spending around $2 per month on health care. Another idea is to reduce the frequency of visits through a hotline approach, but Pesinet's goal of creating a culture of prevention may require a more hands-on approach.

It's not an easy problem to solve, but Pesinet has one other trick up its sleeve: tapping into the millions of Malian migrant workers who send an average of 160 Euros back home each month. The organization is seeking $50,000 in support, which it plans to use to expand its program from Bamako to some of the 50 high potential sites it has identified in Mali.

Rob Katz

May 2, 2009

Pesinet - will it ever be for profit?

Dear Luke -

Thanks for your post and for your analysis of the Pesinet model. Interestingly, the World Resources Institute's (now-defunct) Digital Dividends project did a case study on Pesinet waaay back in 2002. So this isn't a new project.

That doesn't mean it isn't doing some great work. Many NGOs are doing amazing things in terms of preventative care. But the case study identified the inability of Pesinet to turn a profit as its main barrier to growth. To the best of your knowledge, have they resolved this?

The case was available on the Digital Dividend web site, which is currently down. Here's a link to some information on the WRI site:

http://www.wri.org/publication/what-works-afrique-initiatives-attempts-combining-social-purpose-and-sustainable-bu

I hope to hear more about Pesinet, because I hadn't heard about it since 2002. What's changed in the last 7 years? Will it ever be for profit?

Thanks again for your post.
Rob

Anne Roos-Weil

Updates and clarifications on Pesinet

Dear Luke, dear Rob,

Thank you very much for the article on our project and your comment.

I am one of the co-founders of Pesinet. I wanted to give some clarifications on the business model and project history.

As Rob mentioned, the project started in 2002 in Senegal, with the same founding principle that weight was a good health indicator to monitor young children's health and a good basis for early remote detection of diseases.

At that time, health workers where not using mobile technology to collect data and the service did not include access to medication.

I got involved in Pesinet when the project had stopped in Senegal following failure to make it self-sustainable. I was at that time part of a team of students that was tasked with re-thinking the whole operating and business model to address the challenges identified in this first experimentation.

What has changed since then?

- health workers now use mobile phones to collect and transfer data (a much more cost-efficient system) - we developed the java application that allows them to send the info through the GPRS network to the database
- the price of the micro-health insurance has been increased but now includes discounted medication (families pay them 50% of the public price with 25% being taken in charge by Pesinet and 25% being saved thanks to our partnership with the healthcare community center that allows us to get drugs at the wholesaler price negociated for all public healthcare structure's drug stores).
- the partnership with the public health community centers is also a new strategic change. The service positions itself as a partner for public health. In doing so, we access the coverage of these structures across the country and can envision a large-scale deployment of Pesinet.
- the co-financing mechanism by the Malian diaspora is also a new feature of the project and will help us reach a great number of subscribers.

Transportation costs are not included because the whole project is designed to work with families being at an a-hour walking distance from the doctor.

Pesinet has been launched as a not profit organisation. In its new form, we estimate that the project will break-even with some 35 sites deployed. As most BoP projects that rely on proximity work, fixed costs are pretty high and thus volume is the main factor to make it self-sustainable.

We are currently exploring the opprtunity to transition to an hybrid model. We'll welcome any advice on that from the next billion community as you probably know better than us other social ventures that implemented this type of model and that we could learn from.

Thank you for your comments and hope to share and exchange more ideas with you soon.

Anne

— Rob Katz replied over one year ago

Thanks Anne, for your detailed response. Just so folks have the link, here's the 2003 Digital Dividend case study on Pesinet and its for-profit partner, Saint Louis Net. http://digitaldividend.org/case/case_afrique_initiatives.htm As you can see, a hybrid model has been tried before. I hope to see the same kinds of changes made to the hybrid model as have been made to the non-profit model. At the end of the day, what Pesinet is doing is of great import to the children and families of Mali. If it can serve more families more effectively as a for-profit company, then great. But if it is more effective as a non-profit - which might be the case - then let's understand that before we push hard to the hybrid model discussion. Not every social benefit activity has to be a business. There is a role for aid and charity - and when it comes to preventive healthcare of low-income children whose families are making $1 or $2 per day, perhaps the best role of business would be to step aside. What was the outcome at GSVC?

Austine Gasnier

May 4, 2009

Case Study on Pesinet

Dear All,

This is indeed a very interesting project and as part of the Growing Inclusive Markets Initiative we have also commissioned a case study on Pesinet in 2008, which explains the main differences between the original project in Senegal, which failed to become self-sustainable, and the one currently being developed in Mali.

The case can be accessed at http://www.growinginclusivemarkets.org/images/pdf/english/Mali_Pesinet%20FINAL.pdf

Best,
Austine

Jay Davidson

May 6, 2009

Lower child mortality - higher food and water production

It is shocking to read that as many as twenty percent of the children in Mali die before they are five years old. From our Western perspective, this is unacceptable and preventable.

In addition to the Pesinet approach to helping save children's lives, as I see it there are at least two other considerations for workers in this field to ponder:

1. THE INSHALLAH FACTOR

Mali's population includes a high percentage of Muslims. Intinsic to Islam is the concept of Inshallah, which refers to "God's will."

I met Luke in Mauritania. During my two years there I had many a discussion with Mauritanians about the Western proactive approach to life, as compared to theirs, which we see as their sitting back and just letting things happen.

People don't wear seatbelts in cars. They don't want to appear as if they are trying to prevent "God's will." If they die in a car accident, well, that is as Allah wanted it to be.

This perspective is deeply ingrained in their culture, religion, and daily lives.

My first question concerning this writing, then, is how will the Pesinet workers will overcome this sentiment on the part of the people they are serving?

2. GREATER DEMAND ON SUPPLIES OF FOOD AND WATER

While decreased child mortality is generally a good thing - at least from our Western perspective - having more mouths to feed is going to put a strain on many people's budgets. People are struggling to buy food and supply clean water to their families. To feel more people, they will need more money. And even if they had more money, will there be enough food and water available so that the now-surviving children can be fed?

My second point, then, has to do with addressing the need for increased income to the families as well as increased food production and clean water supply. If Pesinet isn't directly working on these issues, has it partnered with people who are?

Helping people who need it is ALWAYS a good thing! Bravo to all who are doing this critical work in our world.

Saving one life is like saving the entire world.

Jay Davidson
Peace Corps Mauritania, 2003-2005
American Jewish World Service India, 2006
American Jewish World Service Ghana, 2007
Teach With Africa, South Africa, 2009

Luke Filose

May 7, 2009

A few thoughts

Thanks for all the comments, everyone. I think it's great that Pesinet is tweaking their model and giving it another shot in Mali. A monthly fee of $1 is 4x the amount $0.25 charged in Senegal... it's doesn't sound like much, but with the other factors considered (drug sales, remittances) I hope it can be sustainable, whether you're calling it a non-profit, a non-profit business, or a social enterprise...

In response to Jay, I have sometimes wondered about the millions of lives saved through what is arguably the most successful initiative in the history of "international development": vaccines. Just to take one example of many, worldwide measles deaths reduced from 750k per year in 2000 to 200k thanks in large part to UNICEF and other organizations working to administer vaccines.

So many factors need to be addressed simultaneously to get out of the cycle of poverty. If you have education but cannot get a job, then what? If you can grow enough food but suffer from disease, then what? Etc, etc.

I have many interesting memories of the "inshallah" factor Jay refers to in Mauritania. I don't really attribute that to Islam, per se, though, as much as poverty. I think you'd be likely to find that people in poverty, without much education, whether Christian or Muslim or anything else, tend towards fatalism. I hope that's not too much of a generalization!

Development through Enterprise

Luke Filose

MBA Candidate

Haas School of Business

San Francisco, CA