Laying the Foundation of Social Health Enterprises (SHE) in Developing Countries. Paving a way for Universal Health Coverage?

I have been tinkering around with this concept called “Social Health Enterprise”, finding ways for it to be applied to Hospitals Beyond Boundaries. Social Health Enterprise is actually a new term that has never used it before in literature or research. It just struck me that they always use the term 'social enterprise within health care' in literature and researches, figured it would be too long to write. So for the purpose of brevity, I shall introduce the term “Social Health Enterprise”, in short SHE.

Social Health Enterprise is derived from the concept of Social Enterprise. Many of us are not yet familiar to the basic concept of ‘social enterprise’ itself, so here's me trying my best to put it in simple terms:

Social business / enterprise is a midway between a charity and a business. It is like a charity in terms that it does good and solves a social problem, but it is business-like in which it operates as a business, generating profits from sales of products or service. The unique feature is that all profit cannot be taken as dividends by investors/shareholders, instead it is reinvested in the business, for the improvement and extension of services or used for programs that benefit of the wider community. In his book, Nobel Prize Winner Professor Muhammad Yunus characterizes social business as an enterprise created and designed to address a social problem, and it is a non-loss, non-dividend company, i.e. it is financially self-sustainable. All profits generated by the business are reinvested in the business itself (or used to start other social businesses), with the aim of increasing impact on the community.

Now you may ask why am I alternating between the terms ‘social business’ and ‘social enterprise’? People have long discussions on the use and differences between these terms. I am not going to elaborate on these discussions, but simply put, social business is the brainchild of Professor Muhammad Yunus and the business has to stick to these 7 principles:

1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization

2. Financial and economic sustainability

3. Investors get back their investment amount only. No dividend is given beyond investment money

4. When investment amount is paid back, company profit stays with the company for expansion and improvement

5. Gender sensitive and environmentally conscious

6. Workforce gets market wage with better working conditions

7. ...Do it with joy

I believe that social enterprises are similar, but they hang more loosely around these principles. For the sake of discussion, I stick to Social Business when describing business in relation to Prof Yunus’ endeavor, and social enterprise to describe those businesses in general. Generally, I am referring to the same thing. 

So, when it comes to business and charity in healthcare, I like to ask this question:

“Why is it that you can find thirst-quenching 1 dollar can of Coca-Cola anywhere in the world, but not life-saving 12-cents malaria medicines?

In his book ‘The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good’, William Easterly poses a similar question (he used Harry Potter book analogy, not a fan, sorry!) that becomes a central theme in his book. Easterly hails Professor Muhammad Yunus as a ‘searcher’ who can afford to solve these kind of problems by combining innovative entrepreneurship skills to solve a public problem, through his breakthrough idea on microcredit, and later social businesses.

Actually, I have been thinking about this concept of social business within health care since HBB's inception in 2012. I think HBB was born at the right time when social entrepreunership was at its infancy and growing well in Malaysia. Thanks to myHarapan, HBB's mentor organization, I managed to meet Professor Muhammad Yunus the father of social business himself. I met him in South Africa on October 2013, at the back of a stage, at a moment when I was freaking out because it was nearly my turn to talk to more than 1000 audience in the hall. I did not have much time and explained all about HBB to him as brief as I can. I asked him a few things about his theory on social business. I asked him where I can go to learn best about social enterprise. He told me the best place to learn is to go back to the community I am trying to serve and learn from them. Wow, okay that was profound. I was thinking of Stanford or something. That is the beauty of social business. It is innovative and tailors to the community that the best way to learn is to be on the ground. It is not rigid that you have to go and sit in classes all day long.

Professor Muhammad Yunus and I at the backstage during One Young World Summit in South Africa. Seconds before my turn to talk

The hype of social enterprises escalated when Obama came to Malaysia, the first sitting president to do so since 1966, for the fourth Global Entrepreneurship Summit (GES) in Kuala Lumpur. It was then that the Malaysian Global Innovation & Creativity Centre (MaGIC) was first announced, and in the Budget 2014 proposal later that month, Prime Minister Najib Razak announced an RM50-million (US$15.3-million) allocation for it. 

MaGIC's mandate is to encourage innovative start-ups and entrepreneurship in general, however a lot of attention was given to social enterprises as a way to solve community's problems. Unfortunately, health care in social enterprises was quite in the side line. For example, a statement from the Secretary-General of the Treasury at MoF during MaGIC's launch was: 

"MaGIC would be an independent body that will act as a one-stop centre for all kinds of entrepreneurs – not necessarily just high-tech and those related to ICT, but also entrepreneurs dedicated to the services sector, agro-based products, logistics and so on,” 

...And so, health care is part of that ‘so-on’ sector.

Since then I spent a lot of time researching social enterprises in healthcare throughout the years. They are quite a lot actually, and it has been around for quite some time in the developed world. For example, it was being promoted in the UK in 2005 by former NHS Chief Executive Sir Nigel Crisp, followed by statement by the Secretary of State Andrew Lansley declaring a wish to transform the NHS into ‘the largest social enterprise sector in the world’. However, despite from various efforts from the Department of Health, such as Social Enterprise Investment Fund (SEIF) and The Right to Request programme, there is still inadequate evidence to support the effectiveness of social entrepreneurship within healthcare in the UK. One of the main reasons being the UK already has a strong public-funded healthcare provided by the National Health Service (NHS), putting the private healthcare sector, in which social enterprises operates in, considerably smaller and less extensive than its public equivalent. 

Furthermore, many social enterprises are public service mutuals or ‘spin-outs’ from the NHS, which are organisations which have left the public sector (i.e. spun out) but continue to deliver public services. As a result, the responsibility of initiating social enterprises within healthcare in the UK are put to mainly former NHS staffs, clinicians, those who mostly don’t have the courage to start their own social business when they are already comfortable in the NHS. Because of the public’s accustomization to the NHS branding in which the majority of health services in the UK are under, social enterprises also lacks the confidence that the NHS branding provides. 

I believe that social entrepreneurship can play a more effective role in the health care of developing countries, like most countries in Southeast Asia, including Malaysia. This is because, in contrast to developed nations, many developing countries adapt a two-tier health care system where they have a quite seperated public and private funded health care system. Those who could afford purchase additional health care services or receive better quality and faster access thorough the private health care. Those who could not afford will have to go to the public healthcare, which are multiple times more crowded than the private. 

To date, there has been no coherent and strong effort to utilize social enterprise in health care in two-tier health care systems, when in fact, developing countries have a backdrop of public institutions becoming increasingly viewed as inefficient, ineffective and unresponsive, and the private sector becoming more profit-oriented and only caters to those who could afford health care. So there is a huge gap here and there is a need for a health care system that bridges between the two. Even in Malaysia, the private spending for health has overtaken the public spending since 2004. In absence of health financing reform, our health system will likely become increasingly privatized both in funding and service delivery. The public sector has only about 10% of primary care clinics but handle almost 40% of outpatient visits. The public clinics manage larger proportions of chronic diseases as compared to the private sector. We have tried to solve this problem by proposing 1 Care for 1 Malaysia system, but it got a strong opposition from the public, because perhaps it is too big a change to happen in an instant. I think a social health enterprise can be an alternative by bridging the public and private one step at a time, encouraging private practitioners to play a role in public service, and benefiting their business at the same time. 

So here is my definition of Social Health Enterprise (SHE):

A social health enterprise is a healthcare business with an objective to fulfil a public health purpose. It uses market-based mechanisms to operate, but its aim is to solve a community’s health problems. Profits are reinvested for the improvement and extension of services or used for public health programs for the benefit of the wider community.

Inspired by Prof Yunus' 7 Principles of Social Business, I came up with the characteristics of a 'Social Health Enterprise', in which HBB clinic will operate like:

1. Starts as a primary health care facility, with operations guided by a Family Medicine Specialist (FMS) and a Public Health Physician

2. The objective of the healthcare business is to overcome a community’s public health problems; not for profit maximization

3. The health care business attains financial and economic sustainability without depending on continuous donations

4. Profits are reinvested for the improvement and extension of services or used for public health programs for the benefit of the wider community

5. Investors can only get back their investment amount. No dividend is given beyond investment money.

6. Staffs receives monthly salary based on the country’s market wage with increments based on time or performance. No bonuses are given as any surpluses are reinvested

7. Strives to achieve Universal Health Coverage (UHC), by working with other private sectors and the local government.

Now point number 7 is very important as I find it missing from the many social enterprises in health care in developing nations. I find that many social enterprises in healthcare in developing countries too disease-specific. They usually focus on eradicating a single disease, like malaria, HIV, TB, treat cataract, saving children with thalassemias. SHEs must be more than that, it has to provide a social safety net, so that the poor, no matter what disease they have, can afford health care for their disease. This is in line with the concept of Universal Health Care (UHC). 

UHC is defined by the World Health Organization as:

"Ensuring that all people can use the promotive, preventive, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardship"

UHC is firmly based on the WHO constitution of 1948 declaring health a fundamental human right and on the Health for All agenda set by the Alma-Ata declaration in 1978. The DG of the WHO, Dr Margaret Chan went as far as to say: 

"Universal coverage is the single most powerful concept that public health has to offer. It is the best way to cement the health gains made during the previous decade. It operationalizes the highest ethical principles of public health. It is a powerful social equalizer and the ultimate expression of fairness"

My former boss at the WHO in Geneva loves discussing about UHC when I was there, and he gave me an article written by a health economist called David Stuckler, discussing a lot about the three dimensions of UHC. Upon reading his article I was interested in the financing part of UHC. There are many methods to finance UHC, most commonly used are social health insurance, tax-based, single payers, but what interest me the most is: "community based health insurance". I think it best fits what we are trying to do at HBB .

Dr Eugenio and Victoria, former bosses at the WHO

As with everything, theories must be tested and tried, and that is exactly what HBB will be trying to do. For our clinic, we are going to devise a community based health insurance system that works best for vulnerable communities. Since currently we are focusing on maternal and child health, perhaps we will start by insuring pregnant mother and their newborn child against catastrophic healthcare cost in the event that complications arises. Then we can extend to the general population. Step by step, we are going to keep revising the system until it is workable and replicable to other communities at large, until it can be adapted to the whole nation; which is the aim of UHC.

I think this field of SHE can be grown and tried on small communities, and extend from there. I would like to develop further this concept of SHEs and find out its challenges. I would like to spark a discussion on this. For example, if we can get all private practitioners to run SHEs and play a role in public health, what is it that they get other than satisfaction in helping patients who could not afford? The government has to come out with an appealing agreement or incentive, like NHS's 'The Right to Request programme' and their health departments's Social Enterprise Investment Fund (SEIF).

I believe this concept of SHE looks promising can be further developed (if I am not optimist about my own idea, nobody will, right?). Healthcare sector is also a very promising sector for social entrepreneurship because it affects the livelihood of a person directly. I am no expert in health financing and health economics. Maybe if I become one someday I can start publishing papers in journals, or better yet write books about SHEs. But for now I do need your opinions. There might be organizations out there that is doing something similar, and maybe everything I wrote above has already been thought up by another organization. But it doesn't matter and that is the beauty of social businesses. We do not compete with each other because we know that we are all trying to achieve the same objectives. So if you have any feedbacks, comments, suggested case studies, do let me know