Industry Watch

Using the franchise model to improve African health care

Standardized quality can save lives

By Brian Martucci
03-24-2016

Drive down the nearest commercial strip and just try not to pass a franchised business. (Spoiler alert: you can’t.)

Franchising has changed the game in many consumer-driven industries, from food service to child care. That’s because it’s a simple, seductive concept. Franchisors develop standardized systems and procedures, build a brand, and find franchisees willing to shoulder the costs of starting and running individual business branches. Franchisees get the assurance of a (usually) proven concept, plus ongoing quality control and marketing support. Some of the world’s most recognizable brands, including McDonald’s, rely heavily on franchisees.

Franchising might work for French fries in Minnesota, but what about healthcare in Africa? Can a local franchisee network help a small social enterprise improve Kenyans’ health outcomes?

The HealthStore Foundation, which does business in Kenya as CFWclinics (Child and Family Wellness), thinks so. Actually, it knows so, because it’s been setting up franchised, nurse-run health clinics across Africa for nearly 20 years. This is how CFWclinics makes its mark. 

CFWclinics today

The HealthStore Foundation operates just over 60 CFWclinics locations in Kenya, all franchised through a nonprofit “NGO franchisor” intermediary. Since its inception in 1997, CFWclinics’ network has served about 5 million patients, mainly in desperately poor rural areas. Between 85% and 90% of its patients pay between $1 and $5 for routine care visits; the rest receive free or reduced-cost care subsidized by charitable grants.

CFWclinics seeks licensed nurse practitioners to buy into its franchise system, tapping professional networks and informal connections that are all but invisible to other NGOs. The franchisees own and operate their own locations, with training and coaching from HealthStore Foundation staff, who also are the providers of compliance and the franchisees’ supply chain.

“Our ideal nurses are legally and professionally qualified, demonstrate strong leadership, have ‘soft skills,’ and are financially ready to make the commitment,” says Greg Starbird, CEO of the HealthStore Foundation.

Though it’s challenging to find nurses with all those attributes, he adds, it’s not impossible. Doctors are far scarcer, and pharmacists nearly nonexistent; both work almost exclusively at modern urban hospitals, not poor rural clinics.  

“It’s simply not practical to install physicians or pharmacists at every clinic,” says Starbird.

The HealthStore Foundation faced down similar hurdles in Ghana and Rwanda, where it built and operated similar clinic networks. The Ghana network sold to South Dakota-based nonprofit Sanford Health; the Rwanda network sold to U.K.-based pharmaceutical firm GlaxoSmithKline.

The CFWclinics difference

CFWclinics is built on two key differentiators: “two things that frame what we do,” says Starbird.

Number one: trust. Kenyan healthcare has serious problems: “bad drugs, dysfunctional incumbent providers,” and more, says Starbird.

Patients don’t trust the system.

“So we come in with a recognizable brand, better equipment, better medicine, competent staff, more attractive clinics and solutions to vexing technical issues,” he says. In other words, the building blocks of lasting, trust-based, patient-provider relationships.

Number two: the network. CFWclinics’ 60-plus locations make it one of Kenya’s largest independent clinic systems. In a country of 45 million, that’s a surprise. It’s also a big advantage. Even though CFWclinics isn’t huge, says Starbird, “[O]ur size gives us deep visibility into a diverse range of communities” in Kenya.

That’s valuable, he adds, because “no one from the outside really knows how [Kenyans] make economic decisions,” particularly in underserved rural communities. Whereas most NGOs make decisions using haphazardly gathered, often anecdotal information, CFWclinics leverages a wealth of hard market data.

CFWclinics tomorrow

The HealthStore Foundation has big plans for CFWclinics. This year, the foundation is easing the burden on its NGO franchisor and launching a for-profit subsidiary that will enable CFWclinics to “scale to the size of a large commercial franchise network,” according to a HealthStore Foundation executive summary outlining the shift.

The new for-profit subsidiary is targeting 350 new clinic openings, all in Kenya, within 10 years. Many new clinics will be in urban areas, where the patient population is more affluent. HealthStore plans to deliver a “double-bottom-line” for investors: a financial return, with the possibility of a future sale or IPO; and a demonstrable social impact for as many as 3 million people per year in store at scale.

“This is our Version 2.0,” quips Starbird.

Even before the growth spurt begins in earnest, CFWclinics is modernizing and cleaning house. The company’s clinics now accept M-PESA, a mobile payment system used by more than two-thirds of Kenya’s adult population. The switch improves clinic safety by limiting the amount of cash held onsite. A simultaneous shift from paper orders to phone orders sharply reduced CFWclinics staffers’ field visit frequency, cutting costs and freeing up labor.

And, as it expands, CFWclinics plans to leverage its market data — the second big differentiator — to forge lucrative, visibility-boosting relationships with larger organizations.

“We believe that the World Health Organization will be interested in our ‘front-line’ data, which is hard to collect on an ongoing basis,” says Starbird, noting that most WHO data is collected in “one-off” fashion. CFWclinics’ broad, diverse patient population has Starbird optimistic about research and market-testing partnerships, too. CFWclinics recently received a grant from ExxonMobil to test new malaria drugs and diagnostics, and is currently doing something similar for Procter & Gamble.

Treating thousands of at-risk patients daily and testing life-saving medications to boot? Talk about making an impact.

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