A New Model for Health Innovation in East Africa
How our social enterprise providing life-saving medical oxygen responded to the pandemic, and showed the market opportunity for other inventors and entrepreneurs
UPDATE: Since this article’s publication, Hewatele was awarded the inaugural Rotman Innovation of the Year Award by Grand Challenges Canada as one of its supported initiatives with the largest sustainable increase in lives saved or lives improved over the past year.
By Dr. Steve Adudans, Executive Director, Center for Public Health and Development (CPHD), CEO, Hewatele
We all know that oxygen is an essential part of life. As the CEO of a social enterprise in Kenya that provides low-cost, medical oxygen to poor populations, I’ve seen how issues of access can mean life and death for those whose health conditions require it. For years we’ve worked to increase that access to rural and remote villages where specialized care and equipment like ventilators are scarce.
Now introduce a global pandemic that attacks the lungs to this equation. Suddenly we had a situation where a large segment of the population was potentially in need of this therapy. At the same time, the normal systems of government services, NGO donations and global supply chains were being overwhelmed. The New York Times recently featured the dire need for oxygen in resource-poor countries, as well as some of the challenges faced by traditional aid organizations, including long delivery times.
The COVID-19 pandemic has shown us that we need a paradigm shift in addressing health in resource-limited settings, one that embraces local social enterprises and innovative small and growing businesses (SGBs), that are based on viable partnerships.
Typically, those who are working on health issues embodied by the Sustainable Development Goals (SDGs) are focused on the efforts of NGOs, philanthropy and governments. But for-profit, social entrepreneurs have a vital role to play in the health sector, particularly from my vantage point in East Africa. Market-based business models can address some of the issues of health care delivery and ease the burden on the public sector. And these businesses have shown they can adapt quickly to address urgent health issues like the pandemic from a local context.
Our company, Hewatele (Swahili for plentiful of air), was created to address three challenges in distributing oxygen to low-resource settings. First, despite the fact that oxygen is all around us in the air we breathe, purified oxygen for medical purposes is very expensive in Kenya. There are few producers, and the cost was high to deliver it to remote facilities. But it is relatively cheap to extract oxygen from the air using Pressure Swing Adsorption (PSA) technology, clean it through filtration, and distribute it through cylinders and bottles.
Next, we addressed high-delivery costs by creating deposits for the cylinders, reducing the market price by 20–30%. We used a bottled milk delivery model for last mile delivery to far-flung facilities and we initiated trainings for health care workers to empower more people to prescribe and administer oxygen safely.
It’s been a highly successful business model, but COVID-19 provided new challenges that forced us to adapt, and quickly. We knew that we had to help make oxygen both safe and plentiful for a much wider population during the pandemic. But we realized that the handling of the oxygen cylinders could become a nexus for infection in and of itself, especially when used at bedside. We adapted by minimizing the piping needed and ensuring that the oxygen comes directly through wall sockets with cylinders secured in a manifold. We increased the capacity of our plants, and we initiated remote training of healthcare workers for safe oxygen administration and cylinder disinfection, running a webinar series on Zoom that reached 100 clinicians at every session, many more than we could typically do in person.
It took being on the ground with a deep understanding of local supply chains and local markets to adapt quickly to these needs. And we’ve seen other businesses in Kenya make a similar pivot. For example, ambulance hailing and referral systems have been developed specifically in response to pandemic curfews, and there is even one app designed for pregnant mothers to hail a taxi if they go into labor at night during the lockdown.
The pandemic has illuminated areas where government and NGOs alone cannot fill the critical health needs we’re experiencing in Kenya. Donations of Personal Protection Equipment (PPE) coming from multilateral organizations can skew government priorities and actually cost more in the long run. Add in the disruption of global supply chains and the high costs of importation, and the government is recognizing the importance of being able to build local supply chains to produce PPE locally for sustainability and suitability.
Social enterprises can help fill this gap and increase efficiency with good partnership and public-private models. For example, Hewatele is now collaborating with Rice University’s Rice 360° Institute for Global Health to tackle the problem of PPE shortages by developing and deploying a decontamination chamber in Nairobi using UVC emitted through specialized bulbs to disinfect and recycle N95 masks.
But there are several changes in the long term that are needed to help grow and sustain innovators in the health sector in East Africa. To start with, we need more local funding for R&D that entrepreneurs can leverage. Currently most investments to local innovators and incubators are coming as seed grants from the U.S. and Europe. Regular engagement with local investors to show how seed grants for innovations are done can help spur even more invention-based businesses in-country.
And there is a financial gap and market opportunity in this sector that is ripe for impact investors. Currently, there is a lot of focus from donors and grant providers on rural populations and the “bottom of the pyramid” (BOP) for basic health needs and infectious diseases. There is also traditional private equity and debt seeking high returns from urban and suburban high-income populations requiring more specialized care for chronic conditions like diabetes.
In between is a gap where both the BOP and middle-class populations can be addressed via debt and equity investment models. In particular, low-margin, high-volume models for the BOP and higher-margin models for the middle class could be particularly suitable for social enterprises that could balance return and impact.
Because we can’t predict the next pandemic, the market environment has changed and we’re in a new normal that is here to stay. This is a learning period for host governments in Sub-Saharan Africa about how to interface with industry, social entrepreneurs and philanthropy in the health sector to prepare for the next health crisis and address the SDGs.
In every emergency there is opportunity. During the COVID-19 crisis, we’re seeing a call to action for entrepreneurs to come forward with local ideas and innovation. This is not only an active crucible for inventors, but shows the way to a sustainable model for health innovation in resource-limited settings. With more support from government and philanthropy, social enterprise can thrive, and so can the health and economic wellbeing of our communities.