Medicine Shoppe
Bringing Health Services to the Urban Poor
by Nadaa Taiyab, Acumen Fund Fellow
June 2007: As an Acumen Fund Fellow, I have spent the past seven months working for Medicine Shoppe India, one of Acumen Fund’s investees, as the project head for the Sehat Clinic pilot. Medicine Shoppe is a well-established pharmacy brand in India, with over 130 stores already in operation. With Acumen Fund’s recent equity investment, Medicine Shoppe has launched the Sehat Clinics, an entirely new format aimed at the urban poor.
The Sehat concept is simple – a health clinic and Medicine Shoppe pharmacy under one roof. The Sehat Clinic is staffed by a doctor hired by the Medicine Shoppe. Patients pay a nominal sum, usually Rs20, for the doctor’s consultation. If the patient purchases his or her prescription from Medicine Shoppe, the Rs20 is rebated back to them. As a result, the doctor’s consultation becomes free of charge and patients pay only for the medicine. The medicines prescribed by the Sehat doctor are, whenever possible, the generic version of the branded drugs, thus further lowering the cost of medical care to the consumer. Other medical services are also performed in the Clinic at above-cost, but below-market prices.
When I arrived in December, we opened the first Sehat Clinic. Last weekend we opened the seventh, with an eight shortly underway. The model has undergone a tremendous evolution in the past six months. We shifted our site selection strategy from relatively affluent areas with a slum nearby to locating the clinics right inside slums. We redesigned the process through which we recruit doctors and created an employment package that allows us to hire experienced doctors at a salary we can afford. We also implemented an entirely new concept for Medicine Shoppe called community marketing outreach. Through this program, we hire local women in each area to make daily home visits, refer sick patients to the clinic, spread health education and awareness, and promote our free health camps and health clinics. In the past four months we have held over 35 health-plus-vision-testing camps, serving over 4,000 people. We have also made some changes to the look and feel of the clinics and shops and put all our marketing materials in local language, to make our services more appealing to low-income markets.
I was inspired to write this post because we recently held a day-long meeting with all the doctors, health workers, Sehat ground level managers and operations people, the Sehat medical advisor, and the Medicine Shoppe senior management. I was so gratified to see how the core team of three people, myself, the ops manager, and the first doctor, had grown to a team of over 30 with standard processes and team structure in place to hold them together. The company management as a whole has become increasingly committed to the Sehat model. I have seen a dramatic shift in the mindset of management from trying to simply transplant a top-of-the-pyramid designed concept to really thinking about and working at all levels to create a model that can effectively serve the bottom of the pyramid.
It is still too soon to say whether this concept will be successful longer term. However, at this stage I can say that at least we do have a concept in place to test, doctors staffed in all the Clinics, and patient numbers steadily growing each month. The monsoons, which have just begun, mark the high season for disease in Mumbai and so we will be watching the performance of the Clinics closely. There are yet many challenges to address before this concept will be ready to scale. To mention just a few: The markets we are trying to target are somewhat intimidated by the “fanciness” of the clinic and shop’s current look and feel, so those will need to change. The jury is still out as to whether the rebate / free consultation system is sustainable or even the most appealing model for customers, as most people psychologically associate free health care with poor quality, but everyone wants a discount on medicines. Some of the health workers are strong, but others require a tremendous amount of training in both communication and basic health knowledge. At the end of the day, the number one question is whether we can get enough patients per day into the Clinic in a short enough period of time to make this model profitable.