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Global Collaborative Healthcare - Continental Shift

Summer 2014

Continental Shift

By: Juan Carlos Negrette
Date: June 20, 2014

Continental Shift
Illustration by PushArt

Consider a scene: Olubunmi crosses the busy, dusty street, gracefully avoiding bikes and cars. Her daughter, Bukola, jiggles a bit against her back, to which she is firmly tied. Entering a pharmacy, the Yoruba woman approaches a clerk and explains that Bukola is feverish and has diarrhea. The clerk recommends medicines for the girl, which he provides. Olubunmi counts out the bills and coins, and leaves with a relieved smile.

This scene takes place in the burgeoning Nigerian city of Lagos and illustrates a growing trend: the rapidly increasing accessibility of at least routine health care to the bulk of the population in many sub-Saharan African nations.

Now consider another scene: Sarah climbs out of the magnetic resonance imaging machine (MRI) and dresses. A clinic assistant sitting at a computer gets the billing information she needs, asking for Sarah’s insurance card. The assistant explains that the MRI results will be emailed to her and her doctor.

It may sound like a routine medical encounter in the U.S., Europe or Japan, but, in fact, this is another scene from Lagos, and one that’s becoming more common every day. It illustrates another trend: the growing availability of high-end medicine to a more affluent, better-insured segment of some populations in Africa.

Both these trends embody components of an overarching progress in sub-Saharan Africa toward better health care of various levels for a fast-growing percentage of the population. For health care businesses and investors, that progress spells out a compelling opportunity to get in near the bottom half of what is likely to prove a very steep and potentially rewarding curve. For mission-driven, nonprofit health care institutions, it suggests a need and an obligation to help spur and guide the development of projects and health care systems that are even now springing up on that continent.

In the 1990s and in the early 2000s, Africa was widely treated by scholars, journalists and other observers as a place with no hope. But in more recent years, many parts of Africa have begun to modernize, leaving poverty behind. Today, it’s not uncommon to see busy women and men hurrying down the streets of Accra and Nairobi while talking on mobile phones; crowded malls, gleaming airports and office buildings are already part of the African landscape in many sub-Saharan cities. In fact, for the last two decades, the continent has grown at a pace that might provoke envy among richer economies in Europe and other parts of the world. This economic growth has been fueled by rising prices for the commodities that African nations produce, better governance practices, larger aggregate demands and unaccounted-for wealth.

Africa’s economic dynamism is not even all that recent. Poor statistical practices and the difficulty of accessing reliable data largely hid a growing accumulation of wealth and obscured real improvements in overall living conditions, ranging from access to education to increased exposure to modern media. Ghana’s long-standing status as a low-income country, for example, was suddenly upgraded to lower-middle-income in 2011 when it became clear that considerable wealth had been created but not accounted for.

The most evident outcome of that largely unnoticed growth is the surprise ascendance of an African middle class, which is increasingly demanding better products and services and is willing and able to pay for them. What’s more, many African nations are beginning to invest heavily in still-underdeveloped infrastructure. These and other factors make Africa a potentially important growth territory for almost any global industry, especially those that are capable of innovating to meet this new, large, fast-growing middle class’ needs for relatively modest-priced but reasonably high-quality products, or those capable of building modern infrastructure at relatively low cost.

These factors may especially apply to health care. Demand is skyrocketing for better care of all types, and the money is there to pay for it. Yet the infrastructure to provide that health care remains well behind the curve—and that presents a major opportunity. It’s one that is already being addressed by a burgeoning diagnostics industry in Senegal, Nigeria and elsewhere, and other segments of health care are popping up quickly.

None of this would matter if Africa’s growing wealth represented a fluke of bad statistics or an economic bubble. But the gains have moved beyond the 10-year bonanza caused by a jump in commodities prices, with prices having stabilized at relatively high levels. What’s more, the economic ascendance is not confined to the resource-rich countries that have, for example, built strong extractive industries. Rather, the growth is fairly widespread and has reached countries such as Ethiopia and Rwanda, where soaring economies have relatively little to do with commodities. Substantial structural reforms have played a large role in helping to lock in the growth and make it sustainable. These reforms have provided room for increasing levels of democracy and accountability, which provide yet more stability and room for growth.

As health sector reforms address access and quality, public-private partnerships are on the rise, creating interesting opportunities for investors and social entrepreneurs alike in areas that range from management contracts to coinvestment. Today, sub-Saharan Africa governments pay for half of the health services provided in the region, and that number will almost certainly rise in step with increasingly larger and more urban populations. Becoming efficient contractors for governments genuinely interested in serving their populations makes better solid social and financial sense.

Further feeding health care growth will be a rising percentage of a growing population base that is willing and able to pay for health care services. More Africans than ever live in cities, and in just 20 years the majority of the region’s population will be urban—a population much easier to reach with health care services than one that is widely dispersed in rural areas.

Opportunities for health care investment in the region are vast and not limited to service delivery. For instance, the need for trained and educated health care staff in Africa, while currently an obstacle, is also a significant opportunity. Sub-Saharan Africa has only 3 percent of the world’s health workers but endures one-quarter of the global disease burden, leaving it with 2.3 health workers per 1,000 people, compared to 18.9 in Europe. That spells a significant opportunity for those organizations capable of training and educating health care professionals; nascent private universities are already involved in creating new schools of nursing, medicine and technical areas. Private investors from Ghana, Nigeria, Tanzania and Kenya, among other countries, have received handsome returns while providing an essential social service.

As existing health care-related enterprises and projects expand and collect experience, they will become a source of innovative ideas and service models better suited to the markets there. These lower-cost, reasonable-quality models will not only win more business in the region—they may also prove transferable to more developed markets.

Building health care infrastructure will require sharing experiences and methodologies, as well as adapting management approaches to less sophisticated but fast-improving users. Integrated expertise with health care quality—especially patient safety and satisfaction—will be in steep demand and may allow many countries in the region to leap ahead in these areas faster than developing countries did when they started tackling these issues a few decades ago.

Juan Carlos Negrette is the managing director for sub-Saharan Africa for Johns Hopkins Medicine International.