Healthcare
5 questions for building resilient health systems in underserved markets
Written by Stefan Amokwandoh, CrossBoundary Advisory
Healthcare in emerging markets’ premier conference, the IFC Global Private Health Conference, was held in Cape Town early last month. CrossBoundary Advisory’s healthcare team was pleased to join the dedicated group of investors, operators, and leading healthcare experts to discuss the private sector’s role in building resilient health systems.
Reflecting on the conversations, we wanted to share some key questions raised during the event, and how CrossBoundary sees these questions playing out in market activity.
How can local-level resilience and self-sufficiency strengthen healthcare systems?
In the shadows of lockdowns and protectionist policies, the COVID-19 pandemic highlighted the primacy of domestic and national concerns during a crisis. Overdependence on global supply chains crippled healthcare stability in developing countries, a fact if left unaddressed, will reoccur during future global health crises.
Health stakeholders have realized the need to build up indigenous capacity that starts at the local level, from investments in education and local clinical capacity through to in-country production of healthcare provisions and pharmaceuticals (where feasible).
Particularly interesting to CrossBoundary is the role private sector businesses and investors can play to strengthen healthcare resilience in vulnerable markets.
For example, due to COVID-19, we have seen a marked increase in interest from investors (both public and private) in local pharmaceutical and health provisions manufacturing in Africa. This comes off the back of the recognition that local supply chains need to be strengthened and that in many cases this can be done commercially today. But there is also a growing market opportunity for local manufacturers as large global health players like PEPFAR, GAVI, and the Global Fund are all increasingly looking to procure medicines destined for Africa from local manufacturers.
However, there are still many hurdles on the path to achieving local manufacturing including gaps in financing of new projects (many are still quite small and early stage), innovative public sector/donor funding structures to incentivize new market entrants (e.g., results-based financing), significant project times for greenfield developments, and need for greater coherence around regulatory issues. This market will continue to evolve, and we expect major investments to be required to meet the demand coming online from these large procurement bodies as well as local governments.
What tactics can improve government-investor-community dialogue and cooperation to build resilience and improve health?
Public and private sectors cannot operate in silos to be able to achieve viable, sustainable, and quality-assured health systems for developing markets. Companies like Vantage Health Technologies and Afya Rekod are working to digitize healthcare systems and better connect the entirety of the healthcare ecosystem.
In addition to managing patient healthcare data at private and public clinics, insights generated can be used to understand healthcare needs at the community level. As an example, a company like Biobot Analytics can detect COVID-19 and other pathogens through wastewater at the local or enterprise level. Providing local data for more coordinated epidemiological responses between public and private sectors is one such example of how this technology can be transformational, but also how it helps to better integrate the public and private systems that critically need to be in dialogue.
How can we develop and retain high-skilled health workers in underserved markets?
The global shortage of skilled health workers has created a strong pull of medical professionals from talent-producing countries, such as Kenya, South Africa, and Nigeria, to developed countries such as Canada and the United Kingdom. In talent-producing countries, neither the public nor private sectors are currently able to domestically retain the mass of talent available due to a lack of funding to the public health sector, and salary constraints.
While pay is a major factor in retaining talent, it is not the only factor that comes into play for medical professionals seeking to leave their home countries. For many, career advancement and advanced training in their specializations of choice are also key factors. To that end, ensuring that there are opportunities to advance technical skills via state-of-the-art facilities is key.
Major investments are being made into markets like Nigeria to offer services that many patients would normally seek via medical tourism — substituting that market is a major opportunity in many countries and would offer professionals the opportunity to have these career advancement opportunities.
Additionally, we have seen platforms like Rema being developed to create communities of practice among healthcare professionals in Africa to offer training and ongoing education. Given the demand, we think there is an opportunity for these types of services to gain product-market fit and mass adoption among health professionals.
Can performance metrics help keep emerging market healthcare providers accountable?
Another major question is how we drive more efficiency and accountability in healthcare in emerging markets. If there is a lack of performance, directors and managers should be held accountable. Increased transparency can drive down corruption, improve quality assurance, and ultimately improve efficiency and profitability of public (and private) systems.
We have seen a rapid uptick in companies looking to digitize healthcare systems in emerging markets — including Elephant Healthcare, Helium Health, and others.
What we see as promising in this space is companies moving beyond just a service fee approach to a value-based pricing model where providers are paying based on the efficiency they are creating for partners (e.g., hospitals, pharmacies, insurance companies, and government health departments). This creates the right long-term incentives for service providers, while also making the product stickier with clients. With competition in this market increasing, we expect an even greater shift to this value-based approach.
How do we nudge the system to center around prevention?
In emerging markets, the burden of disease is shifting from communicable to non-communicable diseases. As populations grow and live longer, this trend is only set to continue with the increasing incidence of diabetes, cancer, and cardiovascular disease. Building a robust healthcare system fit for the future should focus on monitoring health and preventing disease before the dependence on expensive chronic or acute care.
This shift has necessitated a need to re-orient health systems to be increasingly proactive in the face of this burden of disease.
Companies like Tricog in India are building tools to enable practitioners to catch these diseases early to make treatment more effective. Additionally, companies like mPharma are focusing on bringing community health workers closer to patients to do screening for cardiovascular disease and diabetes, then enabling care through their pharmacies and clinics.
Given the wealth of health data that can be collected, technologies that can guide patient behavior away from non-communicable and chronic diseases, like individualized wearables and EMR macro trend analysis, could be leveraged to create more effective preventative measures.
HealthifyPro, an offering from the Indian-based company HealthifyMe, allows patients to holistically manage their blood glucose and other body metrics to mitigate non-communicable diseases like diabetes.
The energy surrounding the IFC Global Private Health Conference is just one example of the cross-sector interest in tackling these challenges globally. CrossBoundary continues to see an increase in activity in the health sector across the markets we serve, and we are keen to engage with investors, companies, and health sector organizations working on these challenges.
We’re interested in hearing other viewpoints — what questions are you asking on developing, improving, and effectively deploying resilient healthcare systems in emerging markets?
About CrossBoundary
CrossBoundary is a frontier and emerging markets-focused investment advisory firm with a global presence. Our mission is to unlock the power of private capital to make a strong return and a lasting difference in frontier and emerging markets. We have advised foundations, private equity funds, impact investors, local enterprises, development finance institutions, development organizations, and government agencies to support capital mobilization into sustainable transactions in emerging markets. Our teams have advised on over US$1 billion of closed transactions across a broad range of impactful sectors, including agriculture, health, education, manufacturing, ICT, infrastructure, and clean power. We have 170+ experienced investment and advisory professionals across 23 offices globally. Our advisory experience spans the Middle East and North Africa, Central, and Southeast Asia, Eastern Europe, Latin America and the Caribbean, and Sub-Saharan Africa where we have 10 offices spanning Central, East, North, West, and Southern Africa. Find out more at www.crossboundary.com
