On-demand pay-as-you-go specialized clinics

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On-demand pay-as-you-go specialized clinics

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Country

Brazil

Sector

Health Care

Sub Sector

Health Care Providers

Indicative Return

20% - 25% (in ROI)

Investment Timeframe

Short Term (0–5 years)

Market Size

A target market of 42 million people requiring healthcare (16)

Average Ticket Size (USD)

USD 1 million - USD 10 million

Direct Impact

Indirect Impact

Sustainable Cities and Communities (SDG 11)

Business Model Description

Scale-up small clinics / out-patient facilities that offer on-demand primary and secondary care services on a pay-as-you-go basis

Expected Impact

Provide broad healthcare access to underserved populations

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

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The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

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Country

Brazil

Region

Brazil: Maranhão
Brazil: Piauí
Brazil: Ceará
Brazil: Rio Grande do Norte
Brazil: Pernambuco
Brazil: Paráiba
Brazil: Amapá
Brazil: Alagoas
Brazil: Sergipe
Brazil: Bahia
Brazil: Acre
Brazil: Amazonas
Brazil: Pará
Brazil: Rondônia
Brazil: Roraima
Brazil: Tocantins

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Sector

Health Care

Development need
Healthcare deficiencies are cited as Brazil's largest development need by nearly half of the population. Some of the main challenges mentioned are a lack of resources, both human and technical, and lack of productivity, leading to extensive delays in healthcare delivery (2) Brazil has scored 76.9 on SDG 3 (Good Health and Well-being) (1)

Policy priority
The new administration is addressing the healthcare system's main challenges, by vowing to increase efficiency in the system by digitizing medical records and removing restrictions for health professionals to serve both the public and private health care systems; proposing legislation to simplify the transfer process for foreign doctors who wish to work in Brazil (5)

Gender inequalities and marginalization issues
Health-related issues, such as non-communicable diseases, lack of access to family planning services, and maternal health complications, greatly impede women’s ability to engage in the workforce. (6)

Investment opportunities introduction
High potential revenues by providing affordable healthcare to the uninsured population with high targeted returns ranging between 15 and 20%.(16)

Key bottlenecks introduction
Lack of resources and productivity leading to extensive delays

Sub Sector

Health Care Providers

Policy priority
Public sector has repeatedly stressed the objective of making the public healthcare system more efficient and allow professionals to by allowing public and give flexibility to professionals to work in both public and private health care provision

Development need
Brazil's new administration has cut healthcare expenditure by over US$ 2 billion in 2019, down to US$ 31 billion (4) putting a strain on the system which is characterized by poor quality factors. Patients in the public health system are twice as likely to die from infections than patients in the private health system (10) (13) Policy priority: Public sector has repeatedly stressed the objective of making the public healthcare system more efficient and allow professionals to by allowing public and give flexibility to professionals to work in both public and private health care provision Gender inequalities and marginalization issues: Maternal mortality rates in Brazil are five to ten times higher than countries of comparable economic status. Two of the greatest challenges are the high prevalence of cesarean section (c-section) and unsafe abortions. (6)

Investment opportunities introduction
Since 2015, nearly 3M people have lost private health plan coverage, driven by the economic crisis (8), putting additional pressure on the public healthcare system, but also increasing the opportunity for non-plan coverage models (e.g., pay-as-you-go)

Industry

Health Care Delivery

Investment Opportunity Area

On-demand pay-as-you-go specialized clinics

Business Model

Scale-up small clinics / out-patient facilities that offer on-demand primary and secondary care services on a pay-as-you-go basis

Market Size and Environment

Critical IOA Unit

A target market of 42 million people requiring healthcare (16)

A benchmark investor estimated the potential revenue generated by serving 2/3 of the population in the North and Northeastern states (B, C1 and C2 segments) in these clinics at over US$ 2 billion (16)

This assumes a target market of 42 million people doing two consultations per year at an average price of US$ 25

Indicative Return

ROI

20% - 25%

A benchmark business operating in the subsector is targeting returns of 20-30% (16)

Investment Timeframe

Timeframe

Short Term (0–5 years)

Capital intensive, requiring permissions and real estate. (e.g., securing locations, acclimating them for medical purposes)

However, technology used in these vertically-integrated clinics is readily available and produced domestically. Established companies in the vertical are able to roll out new clinics in under a year (16)

Ticket Size

Average Ticket Size (USD)

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

Capital - Requires Subsidy

Services may be initially too expensive even for target users at the bottom of the pyramid

Market - Highly Regulated

Risk of new regulations specific to technology-backed healthcare

Business - Supply Chain Constraints

Unavailability of healthcare professionals to staff clinics

Market - Volatile

High, volatile real estate costs

Sustainable Development Need

Public health expenditure per capita has been declining in real terms since 2015, putting a strain on the system (9) The Brazilian public healthcare system is decreasingly able to subsidize medical procedures, having dropped from 60 to 30% in the past nine years (12)

The public health system is characterized by poor quality factors: Booking an appointment can take as long as six months, 60 people have died while waiting for necessary surgery in 2016 (11); patients in the public health system are twice as likely to die from infections (10)

Since 2015, nearly 3M people have lost private health plan coverage, driven by the economic crisis (8), putting additional pressure on the public healthcare system, but also increasing the opportunity for non-plan coverage models (e.g., pay-as-you-go)

Gender & Marginalisation

Maternal mortality rates in Brazil are five to ten times higher than countries of comparable economic status. Two of the greatest challenges are the high prevalence of cesarean section (c-section) and unsafe abortions. (6)

Northern and Northeastern states like Maranhão, Amapá, and Piauí have some of Brazil's highest maternal mortality ratios, 116.5, 110.8 and 103.6 maternal deaths for every 100,000 births, vs. 30.9 in Santa Catarina (17)

Expected Development Outcome

Broaden access to affordable primary and secondary healthcare to the bottom of the pyramid. Consultations with benchmarked investors start at approximately US$ 10 for a simple orthopedic or other primary consultation, often lower cost than the public healthcare system (14) (15)

Make efficient and quality healthcare available to the bottom of the pyramid by reducing waiting times and providing flexible scheduling

Alleviate pressure on the public healthcare system by absorbing patients that would otherwise use public healthcare

Gender & Marginalisation

Increase women's access to affordable healthcare services, reducing maternal mortality ratios

Resolving health-related issues, such as non-communicable diseases, lack of access to family planning services, and maternal health complications, greatly impeding women’s ability to engage in the workforce

Primary SDGs addressed

3 - Good Health and Well-Being

3.1.1 Maternal mortality ratio

3.2.2 Neonatal mortality rate

3.8.2 Proportion of population with large household expenditures on health as a share of total household expenditure or income

Current Value

Maternal mortality ratio 60 per 100,000 live births (2017) (22)

7.9 neonatal deaths per 1,000 live births (2019) (22)

25.56% (2008) (23)

Target Value

Target to reduce the global maternal mortality ratio to less than 70 per 100,000 live births. (23)

All countries aiming to reduce neonatal mortality to at least as low as 12 per 1,000 live births and under-5 mortality to at least as low as 25 per 1,000 live births. (23)

N/A

Secondary SDGs addressed

10 - Reduced Inequalities

1 - No Poverty

5 - Gender Equality

8 - Decent Work and Economic Growth

11 - Sustainable Cities and Communities

Directly impacted stakeholders

People

Uninsured patients or patients in areas where public healthcare system does not provide coverage

Indirectly impacted stakeholders

Public sector

Public healthcare system: Providing broader treatment options to more Brazilians can help reduce the strain on a highly underfunded public health network (18)

Outcome Risks

Expansion of this model will require healthcare professionals, currently in shortage, which can strain the public healthcare system of professionals, who will opt for private practice

Healthcare professionals remaining in the public healthcare system are likely to be the less competitive professionals who are unable to enter the private practice

Impact Risks

Unexpected impact risk: increased demand in healthcare professionals diverting supply from the public sector, rendering it less competitive.

Evidence risk: Unit economics are not proven and this may affect breadth of impact

Impact Classification

B—Benefit Stakeholders

What

The outcome is likely to be positive, important and intended because a broader healthcare offering could benefit millions of underserved populations in Brazil

Who

Uninsured patients or patients in remote areas are underserved due to lack of healthcare coverage

Risk

The model is based on good evidence and it is being deployed large cities, but unit economics are not proven and this may affect breadth of impact

Impact Thesis

Provide broad healthcare access to underserved populations

Policy Environment

(SUS (Unified Health System)): Public health in Brazil is organized through the SUS characterized by universality, free service and responsibility to enforce the Constitution, which states that health is a right of everyone and duty of the state through public policies financed by taxes (21)

(Brazil’s Federal Medical Council (CFM)): which is in charge of medical licensing and ethics, recognized the insufficiency of health professionals and made it easier for foreign doctors to serve in Brazil, hoping these will reach segments of the population in the North and Northeast regions (7)

Financial Environment

Financial incentives: ProFarma, a BNDES program, provides credit to health-related R&D projects (18)

Other incentives: Similar credit provision programs such as Finep, MCTIC and FNDCT exist

Regulatory Environment

(Child Mortality Emergency Plan): launched in Teresina to support births with more resources, human and technical assistance

(National Health Technological Innovation Policy (PNITS)): offers some risk off-setting arrangements (21)

Government

Conselho Federal de Medicina (CFM) (20)