Que - Discuss the role of ‘disruptive innovators’ in enabling healthcare

service delivery in LMIC contexts. How have business-process

innovations in financing helped social enterprises create value chains
and achieve social impact?

Role of ‘Disruptive Innovators’ in enabling healthcare services delivery in LMIC:

Given their limited disposable income, location in neglected regions and insufficient access to
health information, the poor in LMIC have restricted access to health care. This results in
severe gaps in healthcare provision among a community with a comparatively high illness
burden. Because of perceived or actual shortcomings in government healthcare, they
generally utilize the private health sector. Through innovative health service delivery
methods, a subgroup of private health organizations, dubbed "social enterprises," have
devised creative techniques to improve the iron triangle of healthcare services (access, cost,
and quality) to the poor. Disruptive innovators improve healthcare services and offer chances
for disadvantaged sections of society to improve their social and economic well-being.

There are several ways to bring disruptive innovations to achieve significant social impact by
enabling healthcare service delivery in LMIC. ‘Disruptive innovators’ (Social enterprises) have
been emphasizing on some of them for a very long time:

Social Marketing

Marketing Tailoring Services

Franchising
Business Process Innovations in

Process
Reengineering
Optimized Human
Healthcare

Resources
Outreach

High volume-low
costs

Capital Funding

Cross
subsidization
Finance
Simplified Services

Revenue
Generation

Operations
Examples of Innovative Healthcare business models:

Social Impact
Organization
Accessibility Affordability Quality
Aravind Eye Hospitals   
Jaipur Foot   
Narayana Health   

Business Process Innovations in Financing of Healthcare:

In recent years, several social companies have formed to make a difference in society through
optimizing healthcare service delivery systems. While many social enterprises innovated to
create funding for strategic growth and survival, many altered the value chain to bring down
the cost in ways that made healthcare offerings more affordable to the marginalized
population. Innovations in the financing of healthcare are believed to have been
accomplished through various means mentioned below.

• Operating scale for low unit costs:

High volumes, which maximize the use of healthcare infrastructure efficiently, help in
driving the healthcare cost down. There are some cases that achieved this while
improving the quality of healthcare services – Narayana Hrudalaya Heart Hospital.

• Lower operating expenses by simplifying healthcare services:

Overhead expenses are reduced by streamlining healthcare services, employing

medical practitioners who are almost as qualified as completely certified providers,
and improving operation efficiency.

• Cross-subsidization:

Many private healthcare providers have resorted to a cross-subsidization method to

grow sustainably, in which they use the more affluent patients' desire and capacity to
compensate for financially-burdened patients. Effective methods for determining
financial needs and executing cross-subsidization help such enterprises to achieve
their goal effectively. Aravinda Eye Care System implemented the same financing
strategy.

• Generating Revenue:

This funding model focuses on earning income on its own while utilizing unique social
franchising techniques to disseminate information about healthcare services and
health in general.
 • Funding for Healthcare Providers:

Owing to financial reforms over time, private healthcare providers have benefitted to
launch or enhance the excellence of their health-care programmes by financial means
like capital funding, and VC investments. It also makes cash more accessible to private
operators through customized loan schemes (microfinance).

'Disruptive Innovators' are found to innovate in marketing, finance, operations, and other
areas. Rather than offering a gamut of services, these businesses often have a restricted
clinical emphasis, which may have allowed for more experimentation with delivery systems.
Linking future funding to rigorous social impact indicators will aid in identifying effective ways
and unleashing the unrealized capability of new healthcare service delivery models to
enhance health services for the most vulnerable populations.

Word Count: 542