Overcoming Healthcare’s Last Mile Through mHealth

SolutionsmHealth Summit

November 2015Anne Katharine Wales

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1/3 of all health

expenditures will occur in emerging economies by 2022

Over the next two decades, the middle class is

expected to expand by another three Billion, coming almost exclusively from the emerging world

84% cell phone ownership in emerging and developing nations

Innovations in Healthcare is focused on identifying, scaling, and learning from innovative healthcare delivery solutions around the world

Nonprofit organization founded by Duke Medicine, McKinsey & Company, and the World Economic Forum and hosted at Duke.

Aims to improve health worldwide by supporting the scale and impact of promising innovations.

Supported by and collaborates with a global and diverse group of organizations that are committed to strengthening and increasing the scale of health innovations.

To date we support 55 healthcare innovators, with an average of $2M in annual revenue and 9 years in operations

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We have curated a network of 55 organizations that:

Provide significant improvements in cost, quality, and/or access, as measured against comparable solutions

Address critical health needs

Can be implemented via a sustainable business model

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Brazil India Kenya Mexico United States

Population 202 million 1.2 billion 45 million 123 million 318 million

GNI (per capita, PPP)

$15,900 $5,760 $2,890 $16,160 $55,860

Nurses (per 1K people)

7.6 1.7 0.9 2.5 9.8

Internet users (per 100 people)

57.6% 18 % 43.3 % 44.4 % 87.4 %

Rural Population 15 % 68 % 75 % 21 % 19 %

Health expenditure, total (% of GDP)

9.7 4.0 4.5 6.2 17.1

Three main causes of death

1. Heart disease

2. Stroke 3. Diabetes

1. Heart disease

2. Diarrheal diseases

3. Lung diseases

1. HIV2. Influenza3. Diarrheal

diseases

1. Heart disease

2. Diabetes3. Kidney

disease

1. Heart disease

2. Cancer3. Respiratory

disease

Out-of-pocket health expenditure (% of total expenditure on health)

29.9% 58.2% 44.6% 44.1% 11.8%

Radical healthcare innovation is cropping up differently in key markets, with important economic factors driving entrepreneurial opportunity

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• Get close to the patient (consumer) and follow their established behaviour patterns

• Borrow someone else’s assets

• Confront professional assumptions and ‘right-skill’ the workforce

• Standardize operating procedures wherever possible

• Reinvent the delivery model by using proven technologies disruptively

Across our network, we’re seeing innovators that focus on these opportunities utilizing key principles

Technology plays an incredible driving force in this innovation

Strategic Planning

Performance Management

Should I franchise to maximize my impact? Is acquisition the right path?

How can I collect data in a cost effective way to prove my impact? What about measuring clinical quality?

Product/ Service Innovation Development

What product changes should I make to best serve my customers?

Organizational Leadership & Talent

How do I hire, train and retain talented clinical staff?

Leveraging the Ecosystem What’s the best way for me to partner with a pharma company?

Funding & InvestmentHow can I best position my organization for a series A round? Are grants ever seen negatively by investors?

If healthcare innovators already exist in a proven way, why aren’t they scaling faster? What areas of support do they need to increase their impact?

1There is a need for more coordination between active parties across the system

2There is currently a mismatch between available capital and needs on the ground

Silos of investors

Hard for investors to work

with Foundation

s and Donors

Investment timeframes

are too short

Debt is unavailable or available

at crazy rates

The market is flooded

with early stage free

money

Banks don't

understand the

business models

Healthcare is too

political

Difficult to manage

regulatory environment

s

What’s stopping more investing in this space? Need for more coordination and availability of the right types of capital at the right time.

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Rural BoPUrban/peri-urban

middle-incomeUrban/peri-urban

high-incomeUrban/

peri-urban BoP

Delivery system

Medical Device & Supplies

Payment Systems

Mobile & Tech

Pharma

Inadequate volumeInfrastructurePrice sensitivity

Last mile distributionInadequate volumePrice sensitivity Last mile distributionInformation asymmetryPrice sensitivity Information asymmetryPrice sensitivity

Infrastructure AccessPrice sensitivity

Quality for costInfrastructurePrice sensitivity

Price sensitivity

Information asymmetryPrice sensitivity

Information asymmetryPrice sensitivity

AccessPrice sensitivity

Quality for costInfrastructure

Price sensitivity

Information asymmetryPrice sensitivity

Information asymmetry

Infrastructure

Su

b-s

ecto

rs

Populations

Logistics & Distribution

Last mile distributionInadequate volumeInfrastructure

InfrastructurePrice sensitivity

Infrastructure

GrantImpact capital

Traditionalcapital

Healthcare ventures respond to different market challenges- each requires a unique type of capital depending on population served

Implications for Innovators

Seeking Customer Revenue

Seeking Grant Funding Seeking Equity

• Demonstrate ease of use for all users (CEO, clinician, etc) with current workflow

• Low-up front cost• Understand all

unintended consequences

• Illustrate increased revenue

• Demonstrate increased ability to reach more patients with higher quality care or at lower costs

• Demonstrate ability to increase care for specific population segments

• Show clear customer growth

• Set and reach revenue milestones from a diversified set of payers

Spotlight on Relief Watch

Discussion:

For Innovators: What has been your biggest challenge on your path to growth? What types of resources or partners do you need (other than

funding?)

For Corporates: How are you engaging with emerging markets and does technology

play a role?

For Funders: Are you currently funding mHealth solutions? Grants? Equity? Given the many solutions currently in the market, what makes them

stand out to you?