After months of planning and hard work, some good press, and a little bit of luck the oxygen business in Kenya is up and running, and is supplying even more oxygen than anticipated to meet demand from local customers.

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Introducing Hewa Tele

The business, branded Hewa Tele (“Abundant Air” in Swahili), was unveiled in late November 2014 in a ribbon cutting ceremony that was attended by Kenya’s First Lady as well as several key members of the Ministry of Health.
Hewa Tele is operating under the management of the Center for Public Health and Development (CPHD), an NGO that works on the ground in Kenya. frog has been remotely supporting CPHD and their counterpart in Rwanda, Health Builders, to develop plans for monitoring the performance of the businesses and measuring the health impact of having increased patient access to medical oxygen.
In April of 2015, Stephanie Meier-Lewis and I will return to Rwanda and Kenya to provide additional guidance on the management of the oxygen plants in Rwanda and Kenya. Our goal is to ensure the businesses are operating profitability and will be able to scale to support other regions, and to identify aspects of the business model we want to tweak and trial in the next iteration of the pilot.
To do this, we’ll engage with all the different actors in the system. We’ll spend some time talking to health workers and financial managers at some of our key customers to understand what’s working and what can be improved. We’ll shadow the Hewa Tele plant operators to evaluate their workflow. We’ll also do an audit of the initial business performance metrics and identify gaps and risks. To bring it all together we’ll host a summit with the primary stakeholders from both countries to troubleshoot business operations and lay out plans for the next year of the pilot.
In the meantime Hewa Tele will continue to roll out ancillary components of the businesses such as delivery and staff training, all the while putting out more and more oxygen. Over in Rwanda, Health Builders will host its own ribbon cutting ceremony in late January, so look for an update from Rwanda soon.
Thanks to the hard work of the teams on the ground as well as advocacy and support from UNICEF we’re already getting interest from neighboring counties, which means the challenge of demonstrating profitably and scalability is already upon us. The GE Foundation is hoping to use what we’re learning from these two pilots to replicate this model very soon in other countries. frog is gearing up to continue supporting this effort. Stay tuned for more news and updates.
This is the third post in a series of posts on the Oxygen project. Follow the links to read Post #1: <a href="https://www.frog.co/designmind/oxygen-medicine-infant-mortality-crisis-east-africa" target="_blank" rel="noopener">Oxygen is Medicine</a> and Post #2: <a href="https://www.frog.co/designmind/improving-access-to-medical-oxygen/" target="_blank" rel="noopener">Improving Access to Medical Oxygen</a>. To follow frog’s ongoing involvement in this pilot, or to read more about frog’s work in Rwanda and Kenya, follow us on Twitter and Instagram via the #InsightsO2 hashtag.

Anthony Gregorio

Stephanie Meier Lewis

Anthony helps companies devise strategies for new products and services designed for top line growth.

Stephanie is a designer and researcher who has a passion for designing services for social good. She is interested in service design, education, social impact, and making things real.

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The narrow dirt road that leads northwest to Siaya County Hospital gets choppier as we near our destination. The driver slows, changes gears, and charges ahead, completely unfazed by the 12-inch ruts and puddles in the road, or by the workers carrying crops and supplies draped over bicycles along the sides. Roads are more like guidelines in rural East Africa.

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Oxygen is Medicine

Stephanie Meier, Ravi Chhatpar and I are representing frog on the ground in Kenya and Rwanda to learn more about a very harsh reality: Rwanda and Kenya experience an infant mortality rate that is eight to ten times greater than that of the U.S. The top six causes are all related to respiratory failure, and in many cases these deaths are avoidable if patients receive proper ventilation and oxygen. To address this, we’re designing a business that will provide rural hospitals and health centers with access to medical oxygen, so these avoidable deaths can be dramatically reduced.
We will spend half of our time in Kenya, accompanied by several colleagues from the Center for Public Health and Development (CPHD). With their help, and with the help of The Access Project in Rwanda, we’re meeting with an impressive lineup of health care professionals all over the two countries. With equipment and funding from the GE Foundation, and support from UNICEF and Assist International, we’ll pilot this business at one location in each country, learn from our mistakes, make improvements, and scale the model across other regions over the course of the next few years.
To accomplish this, we’ll spend many weeks conducting research in the hospitals, health centers, and other facilities that make up the public health care system to understand the need for oxygen and what’s needed to make oxygen demand grow. We’ll then come up with a business model that can satisfy these conditions in a way that is safe, sustainable, and capable of growing. After one week, here’s what we’ve learned so far:
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<li>Providing access to medical oxygen is not a trivial challenge, nor is it the only challenge. Infrastructure is unreliable, budgets are slim, and health care workers and maintenance professionals are too few and too burdened. With limited resources, hospital administrators are forced to make impossible tradeoffs when replenishing supplies, which often means that oxygen is de-prioritized in favor of fluids, gauze, and other essentials.</li>
<li>Due to the complicated nature of the public health care ecosystem, a Public-Private-Partnership model will likely be necessary. This will involve multiple partners from the government and private sector alike, to drive support and awareness from the top down as well as the bottom up.</li>
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As our SUV pulled out of Siaya I turned to take one last look at the facility. Chipped paint, muddy walkways, and empty supply cabinets are no match for the ingenuity and resourcefulness of the health care professionals who work here. It’s truly remarkable the impact they can make in spite of the challenging conditions. I can only hope we’re half as clever in our approach to oxygen.

Rwanda and Kenya experience an infant mortality rate that is eight to ten times greater than that of the U.S.

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Improving Access to Medical Oxygen

The top six causes are all related to respiratory failure, and in many cases these deaths are avoidable if patients receive proper ventilation and oxygen. However, access to oxygen in east Africa is limited, expensive and unreliable.
GE decided to fix this, and recruited frog to help. The agreement was that GE provides the equipment – two quarter-million dollar pieces of machinery that create pure oxygen from air – and we turn each of them into a business that satisfies the medical need and can grow organically, without requiring further donations. Once a plan is in place, a team of NGO partners will set up and operate the businesses on the ground: one in Rwanda and one in Kenya.
After about four months of research, business planning, and socialization with health care professionals, government stakeholders, and NGO partners, we’ve come up with a business plan that will allow us to address the medical need for oxygen in a sustainable way. Several important variables will make or break the model. Here’s what we found:

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<h2>1. The key to success is high volume.</h2>
We crunched the numbers. The good news is that the concept is viable, and the equipment GE is donating is capable of generating more than enough oxygen to support the current and near-future needs of the areas where they will be installed.
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The bad news is that current demand for oxygen amongst health workers and administrators is much lower than we anticipated, which introduces a lot of risk in terms of business model viability. If the oxygen plants are producing at or near capacity the model can be wildly profitable. But with just a few facilities buying and using at a similar volume to what they use today, the oxygen plants will only operate at about a sixth of their capacity, which makes the business model barely break into positive earnings. This means success and scalability is predicated on volume growth, and on building strong relationships and contractual agreements with the handful of large customer facilities that intend to buy our oxygen.

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<h2>2. Volume growth requires active demand generation.</h2>
To ensure lasting profitability and to be able to scale organically the business will have to sell to a greater number of customers in the addressable market, and increase the amount of oxygen used at each customer facility. This should be possible, as the medical need for oxygen is absolutely there. So why is current demand so low? We identified a couple groups of barriers, and we’ve come up with initiatives that will address them to enable demand to grow.
Awareness and knowledge barriers account for the majority of the discrepancy between the actual medical need for oxygen and the current demand. The main reason for this is that health worker knowledge tends to stagnate after school; there’s not much of a system for spreading new information down through health pyramid to health workers. Those health workers that are aware of the benefits of oxygen expressed a profound need for training on how, when, and how much oxygen to administer to patients in different scenarios. These challenges will be addressed through an array of demand generation activities that our oxygen business will undertake, including campaigns, conferences, training centers, and a “champion” model to raise awareness of the benefits of oxygen and provide the necessary training.
Logistical barriers were accountable for the remainder of the discrepancy, and these are addressed in the business model itself. For instance, the rate of oxygen flow from a single cylinder of oxygen can only support the needs of 1-2 people at a time. Facilities using oxygen cylinders today use a few large cylinders at a time, which creates bottlenecks in the number of mouths that can be simultaneously connected to oxygen and constrains total consumption. In our model we use more, smaller cylinders at a time. This increases the number of patients that can receive simultaneous care, increases total consumption, and makes the cylinders safer and easier to interact with for health workers. Similarly, customers don’t always replenish their oxygen when they need it because they don’t have the time or means to pick up the cylinders, so we’re delivering. In addition to increasing usage, providing delivery will save most customers money; the cost for us to deliver along scheduled routes is lower than the cost for customers to pick up themselves, because we can spread the (extremely pricey) fuel and time across all customers on the route.

<h2>3. Government influence can change everything.</h2>
Our oxygen business primarily serves the public healthcare system, which means government has a large stake in the game. Government budgeting and usage policies for oxygen could alter consumption at customer facilities more than any other factor. Similarly, due to a variety of benefits, our business is set up as a Private-Public Partnership, which means government will have a say in the way the business operates and how it uses its profits.
The level of government involvement will vary across locations, but in both cases diplomacy is critical, which is where our partners come in. As part of the business pilot our partners will create a formal working group with representatives from <a href="http://www.unicef.org/">UNICEF</a>, the Center for Public Health and Development (Kenya), The <a href="http://www.theaccessproject.com/index.php/home/">Access Project</a> (Rwanda), and others that will lobby the government for new guidelines, policy, and communications in support of the oxygen initiative. More than good diplomacy, part of successfully engaging with the government means getting the government to take ownership of the oxygen initiative and take a hands-on role in advocacy. Our business will seek government sponsorship and involvement in demand generation initiatives, such as conferences and awareness campaigns.

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<h2>What Happens Next</h2>
The GE oxygen plants have been ordered and are already under construction, with plans to install in late 2014. Once installed, a 2-year pilot period will begin, where we will iteratively test the business viability and health impact of the oxygen solution under different business model scenarios, adjusting as we go along. After this pilot period, if the concept proves viable, it will be codified and scaled into other regions in Rwanda and Kenya and eventually into other countries. Stay tuned for updates.
To follow frog’s ongoing involvement in this pilot, or to read more about frog’s work in Rwanda and Kenya, follow us on Twitter and Instagram via the #InsightsO2 hashtag.

Anthony helps companies devise strategies for new products and services designed for topline growth.

Anthony Gregorio

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