The Business of Health Care

The Father of Microlending Takes on U.S. Health Costs

What can a microlending bank in Bangladesh teach us about trimming healthcare costs in New York City? Perhaps much more than we think.

Nobel Peace Prize-winning economist Muhammad Yunus founded Grameen Bank, revolutionizing the fight against poverty by handing out “micro” loans of less than $30 to Bangladeshi women during the mid 1970s.  He went on to spread microfinance around the world, including to Queen’s, New York, where the flagship Grameen America office serves 12,000 women.

Now, he’s piloting a breakthrough health program aimed at dramatically cutting costs while improving the health of those borrowers in Queens. It’s a tall order, given that these women are mainly immigrants, single working mothers, and living on $20,000 a year or less.

What’s more, the program is designed to become self-sustaining. The borrowers will pay for some of the services from the start. Over time, their payments will cover more of the costs. That, Yunus argues, is the only way programs for the poor can be long lasting and deliver the quality of service people want.  Even the wealthiest nations, Yunus says, are starting to realize that their “free” health systems are still too expensive to pay for.

Healthcare insiders will be incredulous. How in the world will the priciest healthcare system serve people living below poverty without relying mainly on charity? Yunus answers that question, and explains why he’s going into health care in the first place, in a recent Financial Times op-ed [i].

In his work with the world’s poor, Yunus has been continually rankled by the fact that health care costs are such a burden to so many and are continually rising. For the poor, health costs are an especially serious threat, because even small bills can cause financial ruin.  To someone living on $25 per day, for example, a $300 prescription represents weeks of food and transportation.
To provide practical solutions to poor peoples’ health needs, he argues, we should look beyond the West’s “Cadillac-style” system, where costs, prices and profits are continually rising. Just as the poor need banks tailored to their needs, they also need health care systems designed uniquely for them.  It’s not just money that separates the poor from the rich. The poor have less spare time and flexibility, face more transportation obstacles, have far fewer support system.

Some of the most promising low-cost health systems lie in developing countries that are coming up with unique “Tata-style” innovations, Yunus writes. Those include Grameen’s own Kalyan (“wellbeing” in Bengali) clinics, which charge a mere $3 a year for membership and provide access to a wide range of care at deep discounts.  Community workers and nurses do most of the work at these clinics, but they also connect with doctors remotely when necessary.  In Mexico, meanwhile, a phone-in service helps the poor evaluate the urgency of their medical conditions. Unnecessary trips to the hospital, after all, are a luxury they simply cannot afford. Subscribers are directed to affordable caregivers when they do need treatment.

Several other examples exist, almost all of which rely on common sense approaches, such as restricting physicians to the tasks only they can perform, creating efficiencies by specializing, and exploiting mobile phones.  “Even in poor countries, almost everyone has access to mobile phones, but they are underused for healthcare,” Yunus writes.

Yunus and his Grameen Health Innovations team are keenly aware of how entrenched the West’s “Cadillac” health system is, and how mired in regulations.  In all of his projects, he carefully tests, analyzes and improves the model as he goes along. For example, Grameen loans are never given for any reason but to grow or start businesses, so borrowers don’t end up strapped and paying down loans on TVs or other frivolous amenities. Members must also join as groups of five, which reinforces accountability. These features were only arrived at after careful tweaking and testing.

The GHI team is, likewise, looking for the perfect “secret sauce” to encourage wellness and wellbeing, discourage wasteful or inefficient practices and help the members experience better health overall while dramatically cutting their bills.  The starting point for that will be enhanced primary care with 24/7 access to doctors and extensive use of health coaches. There are also wellness programs and mobile health services specially designed for the participants.

The initial patients of this innovative program will also help shape its offerings. Yunus is a firm believer that the poor should have a role in designing programs aimed at helping them.  Grameen Bank is even owned by its borrowers.

As this endeavor shows, Muhammad Yunus is far from done trying to help the poor solve their problems. “Every time I see a problem I create a business to solve it.  And that became a habit with me,” he said recently, while accepting Forbes’ 400 Lifetime Achievement Award for Social Entrepreneurship [ii]. He also continues to encourage others to pitch in and experience the “super-happiness” of helping others.

Despite Yunus’ leadership, Grameen’s record, and the work his healthcare team has already done, there will still be skepticism among many observers.  “Healthcare is just different,” people often say. Of course, bankers said the same thing to him back in the 1970s, before Yunus build his first micro-lending institution. “You can’t lend money to poor people. They don’t have any collateral,” he heard, over and over again. Today, Grameen Bank is a financial lifeline to over 8 million poor in his own country and is serving millions more around the world.

Imagine if we could build a truly affordable, high quality health system and then watch that spread around the globe?

Malorye Allison Branca is an award-winning health writer, and a contributing editor to Grameen Health Innovations. She covers health care reform, health IT, precision medicine, genomics and other health-related topics.

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Chitra Mathur
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Chitra Mathur

I want to offer affordable dental services to the working class poor and seniors. Microlending would be a great idea if it is implemented.

Cherie
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Cherie

This sounds like something that should definitely be studied more – it sounds like there might be some really good ideas here!