This is award recognises owners of social enterprises that demonstrate financial sustainability at the same time that the enterprises’ products and services contribute to measurable and verifiable social or environmental benefits.
Ilara Health
Background
Africa’s healthcare system is unable to adequately respond to the rapid population growth and rise in non- communicable diseases projected over the next decades. Currently, more than 500 million people across the continent struggle to access a simple blood test. In Kenya, 56% of the population has never checked their blood pressure and 66% of diabetic patients are undiagnosed. The health financing gap affecting care facilities is particularly acute, at $66bn annually. More than 55% of the time, clinical guidelines are not followed for common conditions, contributing toward poor quality of care.
Limited access and poor quality of public facilities has resulted in most patients paying out-of-pocket for health expenses, with less than 1.5% insurance penetration among Africa’s population. At the primary care clinic level, the private sector has grown to address unmet demand. This has led to a hyper fragmented primary care ecosystem that is largely unregulated. Providers face many challenges in delivering high quality care, including financing difficulties that limit their ability to purchase diagnostics, medical equipment and consumables. They also lack affordable and quality medication due to an opaque supply chain and high cost of medication. Clinic operations are typically inefficient and operated manually, maintaining medical records, inventory and sales on paper.
Originality of design
Ilara Health is creating a network of technology-enabled primary care centres across the African continent. The company partners with and supplies primary care centres with a bundle of products and services called “clinic-in-a-box” to improve healthcare outcomes for underserved and low-income populations. This bundle includes digitisation, lab and diagnostics, therapeutics, clinical and utility equipment, and patient payment support.
Meeting unfilled needs
Ilara Health has developed a proprietary electronic medical record system to support clinicians in making better decisions and managing clinic operations. The company also finances next-generation diagnostic tools, quality medication and clinical and utility equipment for its partners. Additionally, Ilara Health plans to launch patient financing support this year.
Ilara Health has already partnered with 1,400 primary care clinics over the past three-and-a-half years, serving more than 3 million patients and generating more than $50m in revenue annually. The company has generated $4m in leased contract value with an average lifetime value of $36,000 and a low default rate of 2%.
Theory of change
If Ilara Health partners with and supports primary healthcare providers on the continent, then Africa’s primary healthcare sector will be equipped with the necessary knowledge and resources to respond adequately to the continent’s growing healthcare needs.
Impact thesis
As already stated, Ilara Health is building a network of technology-enabled primary healthcare clinics delivering affordable, quality healthcare to Africa’s low-middle income demographics. The company does this by financing the deployment of essential equipment and consumables within existing underequipped clinics across the continent and digitising these facilities using its software tools. Ilara Health’s model has so far focused on providing essential diagnostic tools to primary healthcare clinics across Kenya to bridge prevailing diagnostic gaps. All this is done to improve access to and the quality of healthcare on the African continent.
Linkages to global frameworks
Where possible, impact measurement metrics have been aligned with the United Nations Sustainable Development Goals (SDGs) and Impact Reporting and Investment Standards (IRIS) to demonstrate adherence to global standards. They have a clear alignment to SDG 3 (good health and wellbeing).
Impact
Metrics that track Ilara Health’s progress towards increased capability and capacity as means to strengthen the primary care ecosystem include:
- Total medical devices and/or services deployed (2,118).
- Facilities locations split into sub- and peri-urban (61%) and rural (39%).
- Percentage of facilities located in low to lower-middle income areas (91%).
Ilara Health also tracks metrics that measure its impact in increasing accessibility to and affordability of healthcare tools for providers:
- Percentage of facilities able to meet financial obligations to Ilara Health (93.7% to date).
- Number of tests administered through devices financed by Ilara Health (c.200,000) with nearly 12,000 tests performed
- Disease areas addressed through diagnostics (maternal health, diabetes, hypertension, sickle cell disease, cardiac disease and infectious diseases).
- Total number of facilities actively using electronic medical records (EMR) (123).
- Average number of patient encounters digitally recorded per day (514) with more than 100,000 patient cases documented in Ilara Health’s
Financial performance
Ilara Health and its partners have been generating more than $50m in revenue annually. The company has generated $4m in leased contract value with an average lifetime value of $36,000 and a low default rate of 2%. Ilara Health’s annualised revenue is currently more than $2m.
Potential for replicability
The use of technology to provide solutions to healthcare challenges renders the model replicable in different markets and sectors. That Ilara Health has already partnered with 1,400 primary care clinics highlights the model’s potential for replicability. The model has a particular potential to be replicated in global emerging markets including Latin America and South and Southeast Asia.
Risks
The overall business environment continues to remain challenging and this has an effect on overall demand of the company’s products. The company’s strategic focus is to enhance sales growth while maintaining profit margins, the success of which remains dependent on overall market conditions.
Click here to download the case studyShare
This research report was issued by Krutham South Africa Pty Ltd.
Krutham aims to deliver impartial and objective assessments of securities, companies or other subjects. This document is issued for information purposes only and is not an offer to purchase or sell investments or related financial instruments. Individuals should undertake their own analysis and/or seek professional advice based on their specific needs before purchasing or selling investments.
The information contained in this report is based on sources that Krutham believes to be reliable, but Krutham makes no representations or warranties regarding the completeness, accuracy or reliability of any information, facts, estimates, forecasts or opinions contained in this document. The information and opinions could change at any time without prior notice. Krutham is under no obligation to inform any recipient of this document of any such changes.
No part of this report should be considered as a credit rating or ratings product, nor as ratings advice.
Krutham does not provide ratings on any sovereign or corporate entity for any client.
Krutham, its directors, officers, staff, agents or associates shall have no liability for any loss or damage of any nature arising from the use of this document.
Disclosure
The opinions or recommendations contained in this report represent the true views of the analyst(s) responsible for preparing the report. The analyst’s remuneration is not affected by the opinions or recommendations contained in this report, although his/her remuneration may be affected by the overall quality of their research, feedback from clients and the financial performance of Krutham group entities.
Krutham staff may hold positions in financial instruments or derivatives thereof which are discussed in this document. Trades by staff are subject to Krutham’s code of conduct which can be obtained by emailing mail@krutham.com.
Krutham may have, or be seeking to have, a consulting or other professional relationship with the companies, sovereigns or individuals mentioned in this report. A copy of Krutham’s conflicts of interest policy is available on request by emailing mail@krutham.com. Relevant specific conflicts of interest will be listed here if they exist.
- Krutham provides independent advice and independent research to a wide range of investors and financial institutions on Eskom, Denel, Transnet, Land Bank and SAA. Krutham’s interactions with all clients on Eskom, Denel, Transnet, Land Bank and SAA may include business confidential information but does not include MNPI and so does not provide a conflict. Krutham does not ‘act’ or ‘advocate’ for or ‘represent’ any of these clients. Krutham has regular interactions with government, Eskom, Denel, Transnet, Land Bank, SAA and other related entities connected with the SOE situation but does not provide paid consulting services or paid advice to any of these entities. These interactions are governed by Krutham’s own conflicts of interest policy as well as secrecy rules of the respective institutions or state-owned companies.
- Krutham provides a range of services into ‘organised business’ groupings in South Africa, which includes independent bespoke research and advice. Krutham is compensated for these services. Krutham does not ‘act for’ or ‘advocate’ for or ‘represent’ any of these clients.
- Krutham is currently involved in policy design work on a number of government priorities.
Copyright © 2023. All rights reserved. This document is copyrighted to Krutham South Africa Pty Ltd.
This report is only intended for the direct recipient of this report from a Krutham group company employee and may not be distributed in any form without prior permission. Prior written permission must be obtained before using the content of this report in other forms including for media, commercial or non-commercial benefit.
