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Innovations for Scalability: Lessons from Living Goods’ Model in Uganda

Combining the best practices in public health, franchising, and microfinance

Uganda Ministry of Health

Key Partners

CORE Group Fall MeetingWashington, D.C.Cailey Gibson, Living Goods

415-632-1909 | cgibson@livinggoods.org | www.livinggoods.org

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Living Goods Mission and Key GoalsSupport Avon-like networks of mobile Health Entrepreneurs who make a good income providing health education and selling life-saving and life-changing health products at prices affordable to the poor - empowering them to make a living and make a difference at the same time. Key Goals1. Reduce mortality and morbidity rates

by 15-30%, focusing on children under 5.

2. Provide living incomes for thousands of health entrepreneurs, save poor families $ on healthcare prevention and treatment, and keep wage earners productive.

3. Become financially self-sufficient at scale.

4. Propagate the replication of the social micro-franchising model across developing world.

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Key Elements of the Living Goods SystemRecruiting and Selection: Referral

incentives, wide funnel, tight testing & standards

Training and Coaching: Practical learn-by-doing, 2 weeks initial,1 day/month update, all free to agents; ongoing coaching by field agents

Monitoring and Quality Control: Employs strict controls with monthly inspections; Replaces agents who do not meet standards

Business in a Bag Toolkit: Uniforms, bag, locker, health tools, record books, health flip books, signage

Branch Distribution System: Branches support 20-40 agents ~7km walking distance, target 90% in stock rate, agents re-supply weekly

Diverse Product Mix: drive sales and enable cross subsidization

Marketing, Promotions, Incentives: Door-to-door, mobile phones, community groups, home storefront, regular promotions and prizes

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LG’s Diverse Product Mix Drives Sales…

PreventionInsecticide Treated Bed Nets

Water Treatment

Condoms

Vitamin A, Iron, Zinc

Hand Soap

Iodized Salt & Fortified Foods

TreatmentAnti Malarials

Oral Rehydration Salts

ZInc

De-worming

OTC Pain & Cold

ARI

Consumer Staples*Feminine Hygiene

Diapers

Laundry Soap

Toothpaste

Lotions & Creams

Money Saving or MakingSolar Lanterns / Chargers

Efficient Cook Stoves

Water Filters

Reading Glasses

… And Enables Cross-Subsidization

>> Fast moving items increase frequent home visits

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The Living Goods Health Business in a Bag

Branded Signage

Whistle

Training Certificate

Branded Apron

Branded Tee Shirt

Price List

Sales Register

2 Pocket Money Pouch

Umbrella

Medication Instructions Form

Referral Form

Locking Storage and Display

Cell phone

Measuring Tape

Thermometer

Breath Timer for ARI Diagnosis

Visual Referral Guide

Visual Dosage Guide

Visual Training Tools on 17 Key Health Behaviors

Shoulder Bag

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Health Impact: LG Targets Increases in Key Health Behaviors

Malaria1. Increase % of kids <5 and mothers

sleeping under LLINs

2. Increase prompt treatment of malaria with ACT

3. Malaria prophylaxis in pregnancy

4. Increase referral of acute malaria cases to health centers

Maternal & Neonatal 1. First pre natal visit in first 4 mos

2. Nutritional supplements during pregnancy

3. Delivery in health facility

4. Post natal visit within 24 hrs

5. Identify and refer high risk cases to health center

6. Increase use of Family Planning

Nutrition1. Increase Vitamin A supplementation

for <5s

2. Increase use of fortified foods, iodized salt

3. Iron supplementation in pregnancy

Diarrhea 1. Increase adoption of water treatment

2. Increase consistent hand washing

3. Increase prompt treatment of DD with ORS +Zinc

4. Increase referral of acute DD cases to health center

ARI1. Diagnose and treat ARI infections in

the home2. Increase referrals of acute cases

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Challenge: Long-term financial sustainabilityInnovation: Apply microfranchise model to CHW challenge

Community Health Promoter• Earn a living, motivating income through sale of products, performance incentives

Field Distribution/Branches

• Generate wholesale margins that can fund distribution system

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Challenge: Variable quality of careInnovation: Rigorous agent recruitment, selection, and monitoring

Utilize community networks, uses referral incentives to recruit

Offer comprehensive and ongoing training and coaching• Access to health knowledge, business,

and behavior change skills; share learnings about how to encourage customers to buy and use products

Ensure consistent quality through tight systems and controls• Employs strict controls on quality, care, and service backed up by monthly

inspections • Replaces CHPs who do not consistently comply with standards

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Challenge: Drug stock outsInnovation: Demand driven inventory management system

LG branches maintain 100% in stock rates, ensuring CHPs have access to high quality, lowest cost products at all times

LG uses following techniques:• Weeks on hand; distinguish between

critical and non-critical products• Lead times• Protocols for sourcing, negotiating,

purchasing, delivery, storage procedures

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Q & A and Additional Info...

Phone | +415-632-1909 Email | cgibson@livinggoods.org Web | www.livinggoods.org

“A lot of programs give lip service to ‘sustainability’ — this is the real deal. Living Goods is one of few models with the potential for game-changing scale.”

- Holly Wise, Former Secretariat Director, USAID Global Development Alliance

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Board and AdvisorsBoard of Directors

• Randall Spratt: EVP of McKesson, the largest drug distributor in the US

• Andy Peterson: Procter & Gamble, Director of East and South Africa

• Charles Slaughter: Founder - TravelSmith, Former President – Healthstore Kenya

• Holly Wise: Consultant - Wise Solutions LLC, Former Mission Officer - USAID Uganda and Head of USAID’s Global Development Alliance

• Stephen Jarrett: Former, Deputy Director of Procurement, UNICEF

• Dr. John Cutler: Chief of Country Programmes, Health Metrics Network Secretariat, WHO

Board of Advisors

• Sir Richard Feachem MD: Founding Executive Director of the Global Fund

• Bruce McNamer: President and CEO of TechnoServe

• Christopher Elias: President of PATH, Program for Appropriate Technology in Health

• Dr. Sam Okware, Uganda Minister for Community Health

• Kathryn Johnson, Former CEO of Health Forum

• Erastus Kibugu, Uganda Country Director for TechnoServe

• Dr. Allen Hammond: Former VP at World Resources Institute, now at Ashoka / E Healthpoint

• Dr. Paul Polak: Founder of IDE and D-Rev

• Kevin Starr: Director of Mulago Foundation and The Rainer Arnhold Fellows

• Dr Sam Okuonzi: Makarere University Uganda, Regional Center for Quality of Healthcare

• Dr Rebecca Weintraub: Harvard Global Health Delivery

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Streamlined Supply Chain Lowers CostsTypical Supply Chain

Manufacturer/Importer National Distributor Regional Distributor Local Distributor Rural Seller

Manufacturer/Importer Living Goods Rural Seller

Living Goods Supply Chain

>> LG prices average 10-30% below market.

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Competition – Value Proposition

>> LG delivers lower prices, better quality, and more consistent availability than existing public health centers or private drug shops.

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Keys to Financial Sustainability

1. Significantly broaden number of products offered to achieve diverse, cross-subsidized product mix

2. Add higher margin items

3. Focus intensely on the profitability and livelihoods of CHPs

4. Create buying power through scale & sourcing at lowest possible cost

5. Cut out middlemen in existing distribution chain

6. Maintain rigorous cost discipline

7. Increase number of CHPs served per branch

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2 Modes = 2 Opportunities = 2 Avenues for GrowthLiving Goods’ operates in two modes in Uganda: A BRAC-Living Goods partnership and through its wholly owned and operated network

• The BRAC partnership leverages their existing branch network and deep health expertise and provides scale

• Launched Q1 2008• CHPs selected from existing

BRAC lending groups • Using 24 branches out of 90• 20 CHPs per branch• 500CHPs total• Retail sales of $75/CHP/Month

• LG direct drives innovation in products, promotions, incentives and systems

• Launched Q3 2009• CHP selection from community

at large• 5 branches and growing• 40 CHPs per branch• 200 CHPs total• Retail sales of $125/CHP/Month

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Mobile Platform Drives Health and Sales GainsLG is building a database with cell

numbers of every agent and every client

Delivering Health Education – Text messages educate clients on key health behaviors– CHPs can do follow up by text or voice

Driving Sales– Broadcasts product promotions to improve agent sales.– Delivers instant incentives via mobile money or air time

credit

Driving Prompt Treatment– LG educates clients to call or text their CHP at first sign of

disease symptoms, creating an “on-call” health worker system.

– Version 2.0 will have a central text/call for help that automatically dispatches the closest agent and notifies branch

Next phase: Improving Monitoring / Adherence – All treatments and pregnancies recorded by mobile – System sends automatic treatment reminders– System sends automated SMS queries to test treatment

accuracy– Delivers real time reporting to field staff and management

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Call Me for Help System

Home StickersPlaced in every home with <5 ChildHas agent’s cell phone #Teaches family on danger signs

Stella Ikila

752 830 013

Stella Ikila752 830 013

Call Me for Help

Button

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Training and Monitoring

Health Promoters’ Training:• 2 weeks of initial training, materials

and meals provided.

• 1 week refresher training each year

• Monthly coaching visits from a LG field staff

Monthly Monitoring:

Field agents meet with health promoters at least once a month to re-supply, review records, collect health and sales data, and create outreach plans. Staff also periodically interview community members to measure quality of service and accuracy of diagnoses.

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Outreach, Education, and Marketing

Living Goods Community Health Promoters use many methods for educating their communities on essential health and improving village access to basic health products.

• Conducting door-to-door visits, 25-50 visits per week• Giving village health talks at primary schools, places of

worship, women’s groups, etc.• Operating stalls at weekly markets• Maintaining daily “store hours” at home• Employing cell phones so ill patients can summon them • Identifying and supporting pregnant women

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Data Collection and Evaluation

Ongoing Data Collection on Outputs: Health promoters must keep detailed records of patient visits, diseases diagnosed, product sales and referrals to the public health system. Every pregnant mother is registered and monitored. Product sales and volumes are tracked.

Evaluation of Outcomes: External randomized control trial evaluation with J-Pal/MIT to measure reduction in morbidity and mortality for children under 5 and key behaviors impacting under 5 mortality•Results in 2012

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Living Goods Guiding Principles

Put Clients First: We guide all our actions by our mission of improving the lives and health of the poor. To succeed in this we must be great listeners. We continuously seek input from our clients to serve them better.

Think Big: Because we address problems that afflict billions of people, we seek solutions that have global potential. We create social enterprises that can grow quickly to national scale and readily replicate across many countries.

Drive to Sustainability: Impact without sustainability cannot scale. We manage with the long term objective of true sustainability, maximizing internally generated resources, and minimizing or eliminating the need for donor funding. Our focus on sustainability also requires that we operate in a manner that is environmentally sound.

Measure, Learn, and Adapt: We set clear goals and demand results. We employ best of class measurement methods to drive learnings for deepening our impact and increasing our efficiency. We measure to drive action.

Be Creative and Quick-Footed: We are creative problem solvers who react nimbly to challenges and opportunities. We know that good ideas can come from anyone. We encourage efficient experimentation - learning the most with the least effort. We expect failures and quickly apply their lessons.

Be Efficient: Wasting resources deprives our clients, and wasteful organizations cannot be sustainable. Thus we use our limited resources efficiently and collaborate with local partners to leverage existing investment wherever feasible.

Master the Art of Collaboration: Impact at great scale cannot be accomplished alone. We seek robust teammates, colleagues and partners and work as a team toward our shared goals.

Give Respect: We treat clients, colleagues, partners and vendors with respect at all times. We do not tolerate abuse of any kind. We do not discriminate for any reason. We share the credit and take responsibility for all our actions.

Be Honest: We hire for integrity first and do not tolerate dishonesty. We never offer or accept bribes, and are transparent in all our work. We don’t do or say anything we wouldn’t want to see on the front page of the newspaper.

Keep it Light: Serving the poor is not a chore. We don’t take ourselves too seriously; we look for humor in difficult situations and find reasons to celebrate.