Editor’s note – This is a guest article by a Nigerian based digital health entrepreneur. Guest contributions are welcome. Send to [email protected]
After seeing so many on-demand healthcare startups trying to launch and take their own fair share of the Nigerian market, I thought I should put up this post as I felt something was fundamentally wrong with all the models I have come across. On-demand healthcare already exists in Nigeria, the only thing to do is to create a product and monetize it. I will share my thoughts on creating the product and will deliberately leave out any references to pricing. These are not just opinions but are based on the experience we got after pivoting from primary care.
We developed a model but have not been able to work on it as we ventured into health finance. My motivation also came from an article by Victor Asemota tagged ‘”Zero-based Ventures.” I support the idea that knowledge from past experiences should be shared if we want to develop our ecosystem. Personally, I don’t believe in hoarding knowledge. It is not a competitive advantage in my opinion unless it is something you intend to protect as an intellectual property. The best way to stand out is to be unduly excellent, not by being privy to some information. So I will go ahead and share my insights on what I feel is a scalable model for on-demand healthcare in Nigeria.
If you are a healthcare worker practicing in Nigeria especially, more often than not, you’ve had to
put up with a call or chat with a close friend or relative with a line that goes like this: “Doctor, I’m having so and so symptom, what drug should I take?” Now, this is the most basic form of how on-demand healthcare exists in Nigeria. Most health workers refuse to give out their phone number to patients because of this. And a lot of doctors have protested against their colleagues who give out phone or online consultations for free as they feel it belittles the profession. But as an entrepreneur, I have always wondered, why don’t we simply build a solution on top of this consumer behavior? And what makes people adopt this behavior? Obviously, they want to avoid paying consultation fees. This is why the bane of on-demand healthcare is a high cost. The second reason is that it is fast and takes away the burden of long waiting times in physical consultations.
There are four steps to making a diagnosis in the practice of medicine – history taking, physical examination, investigations, and therapeutic trials. The medical, ethical, and commercial basis of online consultation is based on the fact that about 75% of diagnosis can be made by doctors with just history taking alone. The outcome of medical consultations also follows this same line – a prescription, a request for a laboratory or imaging test, or a referral for physical examination or treatment (surgery, physiotherapy etc.). What startups building on-demand healthcare platforms in Nigeria should understand include the following:
- Health-seeking behavior – Nigerians have a good health-seeking but poor hospital-seeking behavior. This is because a majority of the population do not have any form of health coverage. For all intent and purposes, primary health care in Nigeria is serviced by allied health workers, particularly pharmacists and nurses, and not by doctors. This is not the ideal but is the reality. A startup in primary care such as on-demand consultations can only adopt this reality while trying to convert to the ideal if they must survive. Majority of your referrals (the 75% that can get their diagnosis from history alone) should be to pharmacies and maybe medical laboratories. If you end up referring more people from the app to clinics or hospitals (except in occasional situations e.g. in obvious surgical cases), you’re simply going to increase churn rate.
The outcome of consultation – the primary outcome of a health consultation should be a diagnosis but most Nigerians don’t care about a diagnosis. They are mostly after the treatment and in most cases, the treatment they want is a drug. The other outcomes they also prefer are laboratory requests (typhoid and malaria tests, top of the list!) and ‘scans’. So any on-demand health consultation that doesn’t tie the outcome to a prescription or lab
request simply does not understand the Nigerian market and is bound to have problems. This is why I get a bit worried about online consultations that think Nigerians will pay them for any advice or ‘health tip’ as the outcome of a health consultation. It might appeal to a few but it most definitely will not scale.
- The pricing and cost structure – I have worked in all regions in the country – east, south, north, and presently west. On average, consultation fee in public hospitals is about N1,000 for first visits (to open a card) and N250 for follow-up appointments (to retrieve your card). The prices in private facilities vary widely. On-demand healthcare startups should understand that patients are only paying them for history only. But for facility visits, they are paying for both history and examination. The simple logic is that online consultations ought to be cheaper than facility consultations. And to consider scaling, the benchmarks are the figures for public hospitals I put above. To reiterate, an online consultation has to be cheaper than what patients can pay to get both history and examination in public health facilities which is where the majority of Nigerians go to.
- The legal and regulatory aspects – as with every other aspect of healthcare, on-demand healthcare will have to meet current regulatory requirements. The most important ones being the qualifications of the health professionals and the licensing status of both the professionals and healthcare facilities. For example, though registered, an intern is not allowed to make independent medical decisions and thus cannot consult online. The value proposition startups can exploit here is to solve the problem of quackery by validating the status of health professionals on their app or the accreditation status of healthcare facilities they send patients to. If you have an app where people come to trust as the go-to place to find genuine health professionals or health facilities, then you know you’ve won a sizable share of the
market. Also, there are categories of patients or cases that cannot be seen online such as emergencies, infants, elderlies, surgical cases, recurrent cases, chronic complications etc.
And so here’s the idea that we developed after we pivoted: A platform that helps people get medical attention better and faster:
- Anyone with a health complaint can go online, start a chat with or place a call to a doctor as consultations, and get a diagnosis immediately.
- They also get [as small digital files or SMS codes for offline users] either a prescription, or a lab/imaging test request, or a referral for further examination and treatment but they cannot open these files.
- They can only send the prescription, request, or referral to pharmacies, laboratories or clinics respectively on the platform and these files can be accessed by these facilities.
- They can then proceed to the facility to pick up their meds, perform their test, or get a physical examination/treatment on an appointment basis, eliminating long waiting time.
- There can be a basic package and a premium package. The basic package offering the most basic value (the most acceptable outcome), and the premium package offering additional features such as medical records, home delivery of meds etc.
Three categories of users are obvious – ‘patients’, doctors, and healthcare facilities. The core of this model is the fact that the platform drives traffic to already existing physical health facilities which increases their reputation and revenue. This is the proposition to encourage onboarding of health facilities and their health professionals onto the platform. This can possibly be the most effective and least costly distribution channel as patients will simply follow through. Two streams of revenue can also be seen in this model – one from the user and the other from health facilities while the most important cost is consultations fees.
You are free to adopt the above model. We all know an idea is worth nothing, execution is key. The startup that will win the game is the one that can find the balance between what people are willing to pay and what health workers, especially doctors, on the platform are willing to accept as consultation fee. If you’ve worked long enough in the Nigerian healthcare system, you can easily do the math. A doctor consulting on the platform should be able to earn about N100,000 per month for it to be appealing. To reduce cost on the side of the patients, other revenue models can be applied such as ads by pharmaceuticals – targeting either health workers (prescription drugs) or patients
(OTC medications). With adequate traffic, this alone can result in break-even if you are familiar with how much money pharmaceutical firms spend on marketing.
My hope is that a startup out there will catch the ‘rhema’ from this post. But just like everything I plan on doing, if no one finds a solution, I will come back to building this when we are ready as we intend to integrate our offline payment system and health insurance into the model. Besides, the market is large enough for everyone – getting close to 200 million Nigerians (healthcare is a universal need). It’s way over a billion dollar market. So, by all means, let’s go for it!