Health care non-profit models - comparing 3 Business Models

In the previous two postings I looked at three business models for non-profit health care that were identified and documented in this wonderful article from MIT Global Health:

Heart Institute of the Caribbean (Jamaica)

Nyaya (Nepal) and Smile Train (India)

 

In this posting I would like to bring all three of the approaches together in one canvas (using the Business Model Toolbox app for the iPad).

By putting the three models (in high form) on the same page we can see how each has individualized their approach to delivering health care to specific populations. This is what I have seen in the models:

Note: the cream coloured notes are elements common to all, or two of the 3 business models.

Common elements:

  • All of the organizations rely heavily on Non-Government Organizations (NGO's) to manage their relationships with the communities and segments.
  • The NGO's and community organizations also form their key channels for connecting and communicating with the communities, and their service delivery is through localized medical services (originally Smile Train was to be a mobile service, but was dropped in favour of funding local delivery). All organizations rely heavily on an electronic communication backbone to reduce costs and increase effectiveness of delivery.
  • All the groups have key activities around gathering and sharing data on their service delivery, though Smile Train really emphasizes this for fund raising. All organizations are involved in training local doctors and service providers.
  • As a common key resource, the organizations have shifted from physical to electronic patient records to reduce costs and improve communications.
  • All three BMs rely on partnerships with NGOs and local organizations and have close ties with local hospitals and medical staff.
  • To varying degrees they all rely on donations as a revenue stream

HIC (blue-ish)

  • for a specialized segment of cardio-vascular patient HIC delivers care at costs that are reduced (for people with income) or subsidized (for low income). This creates a form of multi-sided platform where success of delivery to one group (low income) is contingent upon success in delivering to another group (high income)
  • they use a specialized consultation channel for sharing expertise across the organization and for linking with foreign consulting doctors.
  • their fee structure allows for patients with resources to subsidize patients without resources, while still delivering a lower fee for the first group compared to treatment from services external to the country
  • the production of some pharmaceuticals in house and the use and modular equipment (also their two key resources) makes their core service delivery of treatment and preventive programs more efficient by reducing costs
  • HIC is a little different than the others as they have outsourced the fundraising activities to a partner (separate arm) organization. They also make use of foreign consulting doctors to support their internal staff through electronic consultations.

Nyaya (green)

  • Nyaya provides a full range of health care services to a geographically isolated and low income segment on behalf of the Nepal government. Again we see here a multi-side platform approach with the government forming one of the sides.
  • This model is predicated on Nyaya operating a government owned facility on a multi-year agreement. Nyaya is very dependent on the government grants to fund the operations of the facility. Additional grants are received for the services they deliver.
  • In order to effectively deliver their healh services, Nyaya is required to manage a supply chain for pharmaceuticals and materials to keep the hospital operating and this, along with salary costs form the bulk of their cost structure.
  • There is more emphasis in this BM on the training of local service people than in the other models as they become a staff resources.

Smile Train (salmon)

  • One of these things is not like the others. Where the first two were forms of multi-sided platforms delivering services, Smile Train doesn't deliver the services directly. What they do is fund service delivery through financial aid in grants and contributions. This makes them more of a solutions type business, where they are evaluating and making decisions on solutions to localized problems of funding treatment, and awarding funds to worthy patients.
  • This model has a very specific target segment of cleft and palate medical issues, providing grants to patients and to facilities for service delivery.
  • I have taken the liberty for this group to identify a captured value (form of revenue stream) of the social impact they document. This represents a form of currency in raining funds and is a a key resource in their fundraising business.
  • As a granting body, their key activities, apart from awarding money, centre around the fundraising activities. So their donor base is a critical resource as is the statistics they use to convince potential donors to contribute.
  • Part of their 'effective and efficient' organization pitch to donors is predicated on managing operations costs to ensure the bulk of financial resources are spent on program delivery.

I hope this was an interesting analysis. I look forward to comments, or other interpretations.

 

Cheers

 

Tags: Business, Models, comparison, healthcare, non-profit

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Replies to This Discussion

Permalink Reply by Mike Lachapelle on August 2, 2011 at 3:05pm

Hi Cheenu

Further to the material you identified on Polarity Management, a good companion book to Johnson's approach is Roger Martin's The Opposable Mind: Winning Through Integrative Thinking. Martin is the Dean of the Rotman School of Management, University of Toronto. His thoughts are focussed on the ability to hold two opposing ideas at once and to reach a synthesis containing elements of both; refusing to accept trade-offs and conventional options.

He has another great book on design thinking  called The Design of Business  

Permalink Reply by Cheenu Srinivasan on August 5, 2011 at 12:55pm

I have had a brief read of Roger Martin's book The Opposable Mind..and have not seen his more recent one as yet. Books cost an arm and a leg here in Australia!

 

My favourite though is Dr Charles Hampden-Turner from Cambridge University. Charles writes about dilemma theory. I know him very well and for those interested will attach two of his papers- one on 9/11 and the other on GFC.

 

Cheers

Cheenu

Attachments:
Permalink Reply by Gopinathan T on December 6, 2011 at 5:39am

What I noticed was that the BM Canvas managed to penetrate into one's consciousness, something that the narrative alone did not do sufficiently. The use of different colored notes for comparing the comonalities and differences also increased comprehension.

Supplementing the article with the reference to the MIT piece increased the value of information.

Permalink Reply by Mike Lachapelle on December 6, 2011 at 12:03pm

The use of visuals to aid in understanding is a significant area of activity and research. Here's a talk given by Tom Wujec at TED on the subject of how the brain understands and how visuals help.

Tom Wujec: 3 Ways The Brain Creates Meaning

You may also want to look up work by Dave Sibbet of The Grove, and his books Visual Meetings and Visual Teams

Permalink Reply by Gopinathan T on December 7, 2011 at 5:18am

Thank you.

However, I couldn't use the video resource as I happen to be deaf. In fact, it was the deafness that makes visual communications even more meaningful for me.

Permalink Reply by Mike Lachapelle on December 8, 2011 at 1:33pm

If you go to the TED site (link in my previous post) in the menu on the right side of the talk, there is an option for interactive transcript that you can use in conjunction with the video - or read separately.

Permalink Reply by Gopinathan T on December 9, 2011 at 2:24am

That was a great resource! Thank you.

Permalink Reply by Joanne Wakelin on February 14, 2012 at 10:01pm

I have a question about the analysis for Smile Train.

I'm wondering if you could also look at the organisation as a multi-sided platform.  In the pure sense it is not - however, I wonder if there is merit in seeing the done as almost a type of customer.  Without the Donors there is no organisation - so making sure that donors are getting the right donor experience is essential - there are a lot of equally worthy organisations out there all vying for people's discretionary income.  (Actually I looked at donating to Smile Train recently and because as a donor I could not easily find the information I wanted and so be assured of the donor experience I require, I have yet to commit to donating to them)

The reason I have been giving this issue of 'key partner as customer'  some thought is that I run a small consultancy that relies on contractors as a key resource pool.  This means that we also have to provide them with the kind of relationship and experience they want from being associated with our consultancy.  To ensure that they get the focus they need to prefer working with us, I am experimenting with seeing them as a form of customer group.  We certainly have to market/sell to them to get the stickly/loyal relationship we need.

 

Thoughts please.

Permalink Reply by Mike Lachapelle on February 15, 2012 at 3:03am

This is a very interesting perspective Joanne, thank you for sharing.

It is similar to a third party pay model in which an organization receives funding from party A to deliver services to party B. Party A may be a Foundation, Philanthropic body, or a government. It is very important the organization realize Party A is a client segment and understand the nature of the value proposition to that organization to ensure the continuation of revenues. Often the captured value from Party B will be data to prove the social impact has happened, to justify the funding from Party A.

The concept of treating donors as a client segment, for which you are competing against other organizations, puts one into the same model as above. You have to be very clear and understand the value proposition you are delivering to the donors to justify them giving you their money. That would also imply a need to understand the channels to connect with those donors and the CRM to ensure the relationship is long-lasting.

I have done work with charitable organizations and with government departments, and I always emphasize the need to document the funding body as a client segment. Until now I have looked at donors more as a supplier (partner) than a client (someone for whom you are crafting a vp).

Well done, lots to think about.

Permalink Reply by Sala jama on June 1, 2012 at 8:21pm

where did you get your electronic template?

Permalink Reply by Mike Lachapelle on June 2, 2012 at 5:36am

Hi Sala

The canvas is a picture generated by the ipad app BMToolbox. Canvases created in the app can be exported as jpg images.

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