HealthStore in Print

For-Profit Clinics Deliver Medical Care in Africa
As a western-style operating arm of a non-profit foundation

Published: Upsize Magazine
Date: December 2003

Local attorney and entrepreneur Scott Hillstrom is building a chain of for-profit, franchised health care outlets in Kenya, which will grow to 60 shops by the end of the year and treat 300,000 patients annually.

His motivation was despair at a statistic he learned while living the high life in New Zealand, after selling his company, Rehab One, to its main customer in 1995. "I had learned that 25,000 children die every single day in developing countries, from preventable diseases, diseases that could have been cured for the price of a cup of coffee," Hillstrom says.

His model for delivering the medicine is for-profit, Western-style franchising, which he hit upon when thinking about eating McDonald’s french fries in locations all over the world, and each time they tasted the same.

"The question became, how can you create access to a supply of high-quality, affordable, effective drugs? I thought of all kinds of things, like coupons and vouchers and subsidies," Hillstrom says. "It hit me like a bolt from the blue that franchising would work. In franchising you create incentives that cause people to do what you want them to do."

Hillstrom started the non-profit Sustainable Healthcare Enterprise Foundation (SHEF). The foundation takes applications from would-be franchise owners in Africa, selects them, loans them about $1,000 each to start operations, and trains them. The owners put up about 10 to 20 percent of the cost, or about $200. The franchises dispense drugs and basic diagnoses, and if owned by a community health worker, basic medical care.

"We figured out that if you can create a business opportunity for a community health worker that is too valuable to risk losing by rule-breaking, that they would follow the rules," Hillstrom says. "So while they’re surrounded by people purveying bad drugs and so on, we had to create something that they wanted to own, that would be theirs, an asset, a business that had prestige."

The first shop opened in 2000. In some cases franchisees have repaid their original loans and are applying for additional outlets.

Hillstrom says he was enjoying his time with his family in New Zealand after selling Rehab One. Then he had a terrible car accident in 1995. "I didn’t know if I’d survive. I lay on the road alone for about an hour. Thinking about your life that way, it concentrates your mind. I felt that I had not lived my life well," Hillstrom says. "I wanted to do better, and not just spend it entertaining myself and pleasing myself."

Hillstrom this year started a law firm in Minneapolis called Guardian Law Group. "There’s a lot of time in a day," he says when asked how he can keep so many things going.

He believes in the importance of SHEF: "300,000 people treated for malaria so far, and we’re just getting started. That to me is far greater reward than money. No one will ever regret giving themselves away to the world’s poor."

Copyright ©2003 Upsize Magazine

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