Distributed Fertilizer (South Africa, Rwanda)

Building on frameworks developed in other markets, we continued working on the market analysis for a new technology to produce ammonia for fertilizer in a small-scale, distributed way using renewable energy. We have also been assisting the researchers in developing a new company that will take the product to market.

TIP has been expanding its EHeza product, a digital health platform, in Rwanda and has been approached by other countries as well. This project involved a complete cost analysis of the product and the implementation of the product.

An information session for students interested in enrolling in BA685: Healthcare Delivery in Emerging Markets will be held at 5:30 p.m. on Monday, Oct. 28 at the Ross School of Business, Blau Hall Room 1210. The class is offered by Michigan Ross and is organized and primarily funded by WDI. 

The class is comprised mostly of second-year MBA students, but is open to all graduate students. It provides students with on-the-ground experience in a foreign country while also contributing to the success of partner health clinics and hospitals. The class also is designed to increase participants’ international leadership capabilities and enhance their awareness of diverse business issues within the current global landscape. It is taught by WDI President Paul Clyde.

The course responds to the increasing need from future employers that managers have international business perspectives to augment their business and management knowledge. During the first part of the term, students learn about healthcare in emerging markets through lectures, guest speakers and case discussions. Students are then divided into five teams and prepared for visits to their selected country, traveling to those destinations in late February and early March.

Last year, student teams worked in Ethiopia, India, Kenya, Peru and Rwanda. 

Government health ministries in low- and middle-income countries (LMICs) have historically struggled to adequately fund healthcare services for their citizens. But as these countries transition away from donor funding over the next two decades, many will need to find new domestic revenue streams to finance these services. A new WDI white paper explores the impact of raising additional government revenue through increased tax rates on “bads,” such as tobacco, alcohol and sugary drinks.  

The paper, “Revenue Estimates from Taxing ‘Bads’ in 16 Low- and Middle-Income Countries,” estimates the additional revenue generated in 2016 had higher excise tax rates been imposed on tobacco, alcohol and sugary drinks and then compares this revenue to select national economic indicators. The analysis included 16 low- and middle-income countries: Côte d’Ivoire, Democratic Republic of the Congo, Ethiopia, Haiti, India, Lao People’s Democratic Republic, Moldova, Myanmar, Niger, Papua New Guinea, Rwanda, Senegal, Sierra Leone, Tajikistan, Tanzania and Togo. 

Ben Davis

Ben Davis

“The key finding is that increased excise tax rates that result in only a modest increase in retail price can still generate an important amount of additional revenue relative to current health expenditure,” said Ben Davis, a research manager with WDI’s Healthcare sector.  Davis wrote the paper with Pascale Leroueil, vice president of WDI’s Healthcare sector, and William Savedoff, senior fellow at the Center for Global Development. 

The simulations showed that in 14 of the 16 countries, a tax increasing retail price by 17% could generate additional revenue that is more than 50% of the amount these governments currently spend from their own budgets on healthcare.  For 7 of the 16 countries, additional revenue is more than 100% of that amount. 

Davis emphasized that the study has limitations. For example, estimates do not account for income and cross-substitution effects (or when consumers switch to cheaper alternatives when a product’s price rises), and they are not adjusted based on historical experience in raising tax revenues.  

While the results of the current study are broadly aligned with those recently produced by the Bloomberg Philanthropies’ Task Force on Fiscal Policy for Health, there is a slight difference in methodology. The method used by Davis and his fellow authors allowed them to incorporate several different data sources and calculation methods in the final revenue estimates.  Input data were obtained from public databases, journal articles, and LMIC government websites and then used in either a “bottom up” or a “top down” calculation. The “Bottom up” calculation begins with data showing how often individuals consume tobacco, alcohol and sugary drinks while the “top down” calculation begins with the amount of money actually collected by LMIC governments that taxed these products.  

Davis said these estimates could act as a starting point for a discussion between global donor organizations and country governments. “A government stakeholder might say, ‘These results are interesting.  An increased excise tax on these products might be worth considering. Let’s do a deeper analysis to make sure these numbers reflect reality when we take into account all of the factors that couldn’t be captured in the initial study.’” 

“This paper is a small part of a larger conversation about domestic revenue mobilization and healthcare financing in low- and middle-income countries,” Davis said. “It is a building block.”

 

This white paper is a modest contribution to the existing body of knowledge on potential revenue benefits from taxation of “bads” in low- and middle-income countries (LMICs).  We seek to provide orders-of-magnitude responses to the questions, “For 16 LMICs, what amount of additional government revenue could have been generated in 2016 if higher excise tax rates had been imposed on tobacco, alcohol, and sugar-sweetened beverages?”, and “How does this additional government revenue compare to select national economic indicators?”.

Also working with Ruli District Hospital, a  value chain and market analysis was conducted to assess the feasibility of developing a locally procured and processed Ready-to-Use Therapeutic Food (RUTF) to address the challenge of severe acute malnutrition amongst children in Rwanda. The work focused on three main components – (1) ingredients feasibility; (2) the RUTF market; (3) operational and production capacity.

Conclusions: Some but not all of the principle ingredients can be procured entirely locally, with other ingredients either readily available to import or feasible locally with time. The market is vast, though incumbent competitors and regulatory requirements make entry challenging. There are important advantages to locally organized procurement and production, including outreach and education with local farmers, better risk-sharing and contractual performance, and overall ease of coordination.

This project is focused on supporting donors and country governments in understanding how much money is spent on each type of HIV-related intervention. While this seems like it should be straightforward, it is not because the both donors and countries use different budget formats, making it very difficult to compare line items between budgets.  The long-term objectives of this work are to (a) understand the current costs of HIV-related programs and (b) use this information to advocate for change (increased funding or increased efficiency, depending on the results).

E-Heza is a digital health record developed in Rwanda. The newest modules have been completed and the team has expanded the existing modules to 14 new health centers. TIP is in the process of working on strategy, scale and operations’ needs.  This project involved developing criteria for partnerships for market expansion through an analysis of the geographic, political, cultural, and healthcare landscapes in East Africa.

In winter 2019, WDI sponsored 11 Multidisciplinary Action Project (MAP) teams that worked for organizations around the world. Each team was comprised of four MBA students from the University of Michigan’s Ross School of Business.

One team—Lauren Baum, Nadia Kapper, Paul Mancheski, Jason Yu—spent three weeks in Rwanda working for The Ihangane Project (TIP) to develop a business model to grow a ready-to-use therapeutic food that is used to treat severe, acute malnutrition. Through photos and the words of MAP team member Nadia Kapper, here is the story of the work they did in Rwanda, the impact they had and the memories they made.

 

Studying for her master’s degree in public health, Alison Granger was interested in a course at the University of Michigan that would let her take the lessons from her textbooks and classroom lectures and put it into practice.

That’s why she enrolled in BA685: Healthcare Delivery in Emerging Markets, a course offered at the Ross School of Business.

“I was interested in getting a more in-the-field, global perspective on what I’ve learned so far in class,” said Granger, who traveled to Ethiopia for her project. “And I did with this class.”

The class is comprised mostly of MBA2 students, but also is  open others pursuing other graduate degrees such as Granger. It’s designed to enhance participants’ international leadership capabilities, increase awareness of diverse business issues within the current global landscape, provide on-the-ground experience in a foreign country and contribute to the success of partner health clinics and hospitals. It is taught by WDI President Paul Clyde.

The course, organized and primarily funded by WDI with some financial support from Michigan Ross, responds to the increasing need for managers with international business perspectives to augment their business and management knowledge. During the first part of the term, students learned about healthcare in emerging markets through lectures, guest speakers and case discussions. Students were then divided into five teams and prepared for visits to their selected country, traveling to those destinations in late February and early March.

This year, student teams worked in Ethiopia, India, Kenya, Peru and Rwanda. All five teams presented recaps of their projects on April 22 at Michigan Ross.

Clyde said the travel-study course lets students combine what they learned in the classroom with hands-on experience in the field. It features a collaborative learning environment with faculty and students learning from each other in an action-based learning setting.

“Through this course teams of students from Ross, SPH and School of Information have provided our partner healthcare organizations value through analysis of their operations, customers and strategy,” Clyde said. “Through this experience, the students gain unusual insights into the opportunities and challenges of operating healthcare organizations in LMICs.”

Here is a recap of the BA685 projects:

AIM Tech – India (various locations)

More than 1 million infants die each year due to severe respiratory distress, with 99 percent of these deaths in low- to middle-income countries, according to the World Health Organization. Current noninvasive ventilators are expensive, require skilled operators, and fail during power outages that are common in emerging markets. AIM Tech developed NeoVent, a low-cost, low-tech, easy-to-use ventilator that is non-electric and has only one moving part. It also can be manufactured at scale for less than 1 percent the cost of conventional ventilators.

AIM Tech wanted the BA685 student team to evaluate if AIM Tech should enter the Indian market and provide recommendations for a market entry strategy. The students visited Delhi,

Mumbai and Chennai, and interviewed and provided product demonstrations to 24 healthcare facilities, one government official, two manufacturers and one distributor. The students found that the Indian healthcare market shows a high-growth trajectory. The government’s focus on entrepreneurship, insurance, and neonatology also creates favorable climate and demand for NeoVent, while clinicians see the product as unique, necessary and value it at a higher-than-planned price, the students noted.

They recommended AIM Tech license NeoVent to a multinational corporation with an existing foothold in the Indian market. Another suggestion was to pilot NeoVent with a large hospital following FDA approval.

 

Ethio-American Doctors Group (EADG) – Addis Ababa, Ethiopia

The lack of reliable, local liquid oxygen suppliers in Ethiopia for hospitals makes it necessary to have an oxygen separator system on the grounds for the hospital EADG is building. EADG asked the BA 685 students to study two questions: should EADG’s future hospital build and operate a medical gas plant?: and, should EADG sell excess medical gas to area hospitals?

Based on research and interviews with hospitals with its own medical gas plants on-site, the students’ findings showed that EADG would benefit from building its own facility and could learn from other hospitals that have done the same. On the question of whether to sell excess medical gas, the students’ research showed it would not be a good decision to do so. It is not profitable, the research found, and there is robust competition and several barriers to entry in the market. The students encouraged EADG to begin the bidding process soon to select equipment  suppliers because the hospital is expected to open in 2021. They also suggested EADG monitor the medical gas market for any movement or changes in government policy that might make it more profitable to sell excess medical gas.

 

 

The Ihangane Project – Ruli, Rwanda

Timely and accurate data reports are vital to operations at rural health clinics. Electronic records have been implemented, but poor staffing and internet connection have made e-records ineffective. The Ihangane Project, in partnership with nurses from rural health centers, created E-Heza Digital Health Record to deliver more timely and accurate data to the Rwanda Ministry of Health. The ministry has requested that E-Heza be expanded throughout Rwanda to serve maternal child care.

The BA 685 students project was to establish a framework for evaluating the efficiency of the current data reporting system and E-Heza in terms of timeliness, cost and data quality. To accomplish this, the students: analyzed the current lead time for data to move from point of care to the Ministry of Health; identified the cost of data reporting, including revenue loss; defined measurements to evaluate data accuracy; and developed framework to evaluate the efficiency of data reporting.

The students recommended a framework that evaluated efficiency in terms of timeliness, cost savings and data quality.

For next steps, the students recommended recording observational data for each process in the workflow, testing the framework for E-Heza and other health modules and exploring and quantifying the potential adverse effect due to poor data quality.

 

 

Kisii Eye Hospital – Kisii, Kenya

The Kisii Eye Care Institute started in 2013 and it has grown from an eye care service provider to a medical eye hospital and training center. It provides 3,000 surgeries annually but wants to increase the demand and capacity to 5,000 per year. Kisii operates as a social enterprise using an entrepreneurial approach to solve a social problem – avoidable blindness and visual impairment. Services are provided at normal rates for those who can afford them and substantially below cost to low-income members of their community.

The BA685 student team put together a business plan for Kisii to increase demand for its services and improve operational efficiency. The students said surgery and optical services (glasses) are the largest revenue generators for Kisii and it must enhance its marketing strategy in both areas. Operationally, to decrease wait times and provide patients with a higher quality overall experience, current processes must be improved by standardizing the patient queue and improving counselor training, among other things. And to be ready for future growth, the current Kisii organizational structure must change, roles need to be redefined roles and responsibilities shifted.

 

 

Peruvian American Medical Society (PAMS) – Chincha, Peru

PAMS Policlinico wants to become a gastrointestinal (GI) center of excellence. It currently offers GI services and recently a GI doctor from the University of Michigan visited to develop an operational understanding.

Last year’s BA685 team conducted a market analysis to determine how PAMS could grow to become a center of excellence in either GI or ophthalmology. This year’s student team built on that previous work and developed a complete business plan that: evaluated marketing strategy; studied GI equipment options to ensure there is an adequate plan for maintenance, repairs and acquisition; and, assessed opportunities to decouple skills and create a new position to take on some of the current physician duties. This business plan will be presented to potential PAMS funders this spring.

The students’ research and on-site observations and interviews showed: A lack of standardized practices lead to operational inefficiencies and lowered capacity even with sufficient personnel; contract incentives are not structured to achieve best outcome for PAMS; omission of certain accounting practice lowers visibility into financial health of PAMS and each specialties; and, the Polyclinic is one of the few providers of colonoscopies in the region.

The student team’s recommendations included: optimizing processes allowing for maximizing use of resources, including supplies and the time of healthcare providers; standardizing processes also decreases waste and allows more patients to be treated per week, ultimately increasing patient volume and with it, revenue.

 

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