Rethinking Financing for Global Health Series: Unlocking the Potential of Health Enterprises for Sustainable Impact

Building on my previous post on Social Impact Funds, I continue my exploration of sustainable financing strategies for global health. This time, the focus shifts to another innovative strategy: health enterprises.

These organisations are transforming how we approach both the financing and delivery of health services. In this article, I delve into their crucial role in advancing global health, examine their diverse financing models, and outline strategies to ensure their long-term sustainability and impact.

What Are Health Enterprises?

Health enterprises are organisations that deliver health services or products with a business-oriented approach. Unlike purely non-profit models, these enterprises aim to generate financial returns while contributing to public health objectives. They can take various forms, including social enterprises, private healthcare providers, and technology-driven health startups. The key differentiator is their dual focus on financial sustainability and measurable health impact.

Why Are Health Enterprises Important for Sustainable Financing?

The global health financing gap continues to widen due to demographic shifts, the rise of non-communicable diseases, and health crises such as pandemics. Traditional sources of funding, including government budgets and donor aid, are often inadequate to keep up with these pressures. Health enterprises offer an innovative solution by:

1. Attracting Private Investment: Health enterprises have the potential to attract impact investors and venture capital by demonstrating both financial viability and social impact.
2. Enhancing Efficiency: By applying business principles, health enterprises often improve service delivery efficiency, reducing costs and increasing access to care.
3. Diversifying Funding Sources: Enterprises can generate revenue through multiple streams, including user fees, subscription models, and partnerships with insurers.

Examples of Health Enterprises Making an Impact

Several health enterprises around the world have successfully implemented sustainable financing strategies and innovative business models:

• MDBX Health: MDBX Health, based in Abu Dhabi, is a smart pharmacy and digital platform supporting chronic disease management. Their solution integrates medication organisation, home delivery, and real-time tracking through a mobile app, enhancing adherence and reducing hospital readmissions. MDBX partners with healthcare and insurance providers to improve outcomes and lower care costs.
• CarePay International: This Kenya-based enterprise operates a digital platform to facilitate mobile health payments, enabling users to save, pay, and manage health expenses. CarePay’s model has improved healthcare access and affordability in multiple African countries.
• Virta Health: A U.S.-based enterprise, Virta Health specialises in technology-driven solutions for chronic disease management, particularly for diabetes care. By using a subscription-based revenue model, Virta Health has achieved both clinical impact and financial sustainability.

These examples illustrate the diverse ways in which health enterprises can address global health challenges through innovative models and strategic partnerships.

Key Financing Models for Health Enterprises

Health enterprises employ a variety of financing models, each tailored to their context and objectives. Some of the most common models include:

1. Impact Investments: These investments are made with the expectation of both financial returns and positive social or environmental outcomes. Impact investors often seek enterprises that address pressing health challenges in low- and middle-income countries (LMICs).
2. Public-Private Partnerships (PPPs): Collaborations between governments and health enterprises can help expand access to services, particularly in underserved areas. PPPs often provide financial incentives, such as tax benefits or subsidies, to support enterprise sustainability.
3. Blended Financing: This approach combines grants, concessional loans, and private capital to reduce risks and attract larger investments. Blended financing is particularly useful for scaling health enterprises in challenging markets.
4. Revenue-Generating Models: Enterprises that can charge for services or products may use models such as tiered pricing, where higher-income clients subsidize services for lower-income populations.

Challenges and Considerations

While health enterprises hold great promise, they also face significant challenges that can hinder their sustainability and impact. Key considerations include:

• Balancing Profit and Mission: Enterprises must strive to maintain a strong focus on health outcomes, even as they pursue financial sustainability.
• Regulatory Barriers: Navigating complex regulatory environments can be particularly challenging for enterprises operating across multiple jurisdictions.
• Access to Capital: Despite growing interest, many health enterprises struggle to secure sufficient early-stage funding, especially in LMICs.

Strategies for Success

To ensure the long-term success of health enterprises, stakeholders can adopt several strategies:

• Building Strong Partnerships: Collaborations with governments, development agencies, and other stakeholders can enhance credibility and access to resources.
• Investing in Capacity Building: Enterprises should prioritise workforce development, operational efficiency, and data-driven decision-making to improve performance.
• Demonstrating Impact: By rigorously measuring and communicating their health outcomes, enterprises can attract sustained funding and partnerships.
• Innovative Financing Mechanisms: Exploring options such as Social Impact Bonds and performance-based financing can provide enterprises with additional flexibility and growth opportunities.

The Way Forward

Health enterprises represent a powerful tool in the quest for sustainable financing for global health. By leveraging their capacity to attract investment, improve service delivery, and diversify funding, these enterprises can play a pivotal role in advancing UHC and improving health outcomes worldwide. However, achieving their full potential requires coordinated efforts from investors, policymakers, and the global health community to create an enabling environment for growth and impact.

As we continue to explore sustainable financing solutions, it is imperative to recognise the value of health enterprises in driving innovation and equity in healthcare. By supporting these enterprises, we can take a significant step toward a healthier, more resilient world.

What Do You Think?

I invite you to share your thoughts on this topic. Have you worked with or invested in health enterprises? What challenges and opportunities have you observed? Let’s continue the conversation in the comments! If you found this post insightful, feel free to share it with your network. Together, we can spread awareness and encourage action for sustainable financing in global health.