A New Wave of Public-Private Partnerships: Examples from Health Care

Social ventures are set up by entrepreneurs looking to fill a need for social services that would normally be provided for by the government—but that government might be negligent, despotic or simply asleep at the wheel.  They also tend to develop innovative products or business models, which allows them to sustain themselves differently than traditional charities.  Where they tend to struggle is in reaching the millions, usually hundreds of millions of people that require that service.  How does an organization quickly and effectively educate the 100 million illiterate children in India or provide safe drinking water to the 1 billion people on the planet that lack access to it?  Attempting to recreate the services of a government, and that too in a self-sustaining capacity is daunting to say the least.

Few would predict that once a social venture has demonstrated impact in a small geography, that its ultimate scaling partner could become the government, even the most notorious of them.  Driven by innovation, social ventures that are successful start attracting attention from constituents to policy institutes to the media.  Increasingly, governments won’t want to be “left out” and with their reach could help social ventures scale disproportionately.  This post outlines two early stage examples in the field of health care where this is happening—1298, a private ambulance provider in India, and Partners in Health (PIH), a health care provider operating in 9 countries.

1298 was set up in 2004 by a group of young professionals determined to make a dent in unnecessary deaths in emergency situations in India.  30% of accident victims in India die due to a delay of transportation or during transportation, primarily because of primitive service. In 2004, the city of Mumbai had only 50 life support ambulances.  That compares to 600 in the city of London, which has half the population.  Since its inception, 1298 has commissioned over 90 life support ambulances (which includes a defibrillator, ventilator, E.C.G., and cardiac monitor) in Mumbai, Kerala and Bihar.  The company has made an impact in saving over 50,000 lives in Mumbai alone.  1298 has a cross-subsidy model, where the wealthy pay a premium and in turn, subsidize the poor with free service.  This model has proven profitable and attracted several rounds of private equity in the business.  Though it currently only services a small percentage of India’s population, 1298’s success has not gone unnoticed and state governments are waking up.  The government of Rajasthan just awarded 1298 a contract to manage over 300 ambulances in the state.  This would involve upgrading existing ambulances in the state, procuring new ones and managing calls through 1298’s high-tech call center.  In a short period of time, the number of ambulances operated by 1298 will quadruple and the population served with high quality emergency care will double to up to 100 million.

Partners in Health (PIH) was set up in 1983 by medical visionary Dr. Paul Farmer in Haiti.  While still a student at Harvard Medical School, Farmer made frequent trips to Haiti to set up his first clinic.  As an infectious disease doctor and medical anthropologist, he pioneered a variety of unique community-based approaches to health care.  For example, in Haiti, many people believe the source of disease is voodoo and stop taking their medicines once they feel better.  This can be detrimental in the case of diseases like tuberculosis.  So, PIH would send local community workers to administer drugs, provide stipends and nutrition-rich food at the household level.  Over the years, this approach saved hundreds of thousands of lives and PIH’s impact has been the source of much literature including the best-seller Mountains Beyond Mountains by Tracy Kidder.  From its grass-roots beginnings in Haiti, PIH now operates in 9 countries and has funding from the Bill and Melinda Gates Foundation and the Clinton Foundation.  In recent years, with its track record and influence, governments have taken notice.  Today, partnering with the government in the countries it operates in has become central to PIH’s strategy.  In Haiti, in partnership with the Ministry of Health, PIH operates 10 hospitals and clinics and is probably the largest health care provider in the country.  It set up operations in Peru in 1994 in the slums of Lima and now serves an estimated population of 700,000.  It also advises the Peruvian government on national policies for the prevention and treatment of multi-drug resistant tuberculosis and HIV; and provides the training required to help implement those policies.  PIH has similar government partnerships in Russia, Rwanda, Lesotho, and Malawi.  This is allowing PIH to drive change both “bottom-up” and “top-down” addressing both short and long-term issues.  As social ventures continue to innovate and change lives, a little bit of attention certainly doesn’t hurt, particularly if they can wake up governments to fulfill their fundamental duties.