Tackling financial sustainability of mHealth services

While sustainability is a broad term covering demand, supply, access, technology and many other domains, financial sustainability seems the most pertinent of them all. Financial sustainability directly impacts all of the above mentioned domains, whether it’s the end user’s financial capacity to demand a service, the service provider’s financial viability to remain active in the market, or financial capacity to upgrade technology whenever there is a significant shift.

Where mobile technology has been used to enhance health service delivery, one of the main challenges is actually the mobile service component.  Various pilots have involved issuing mobile devices to participants to generate the evidence needed, and in other cases, dissemination of mobile health messages to select populations.  Where data collection is involved, this has also included use of data services to upload data to centralised systems. This gives rise to the pertinent question, ‘who will pay’ for the devices, the data and messaging costs when the service scales?

Many pilots are fully funded for a defined scope as this is one way to implement and generate the required evidence of the intervention. However, when the discussion around scale begins, it dawns on many that the service or approach is not sustainable, largely meaning the ability to afford devices, volume of data and/or volume of SMS messages to be sent once the pilot scales.

Financial sustainability options:

1. Government pays:

This is perhaps the most desired option by many pilots. Often innovators or development projects will come up with mobile innovations which they believe and know will change the world, and hope that the government will take on the costs.  This is yet to happen in many parts of the world, with only a few instances where government has absorbed a service into is mainstream activities. Mobile interventions are often designed and tested parallel to what government is doing, and due to the proliferation of pilots, governments are unable to absorb these services into their recurring budgets and so opt to tackle more important issues.In order for government to on-board a project into its recurring budget, it must be fully engaged in the design of the service, and better still, driven by a key metric or objective within the Ministry of Health. And remember, there has to be a financial objective or implication.  Governments rarely take on services that increase their costs, but likely those that reduce their costs or increase efficiency and reach scale. If these factors can be achieved, then there is a better chance of being absorbed into recurring budget. Remember though, you need to design the service from the ground up with the government.

However when it comes to health and especially public health, there is a broad expectation that health services should be provided free to citizens or at subsidised costs. This is usually in order to ensure that low income households can access basic health care without ‘financial discrimination’. But therein lies the challenge. Who pays to provide these free services? Where does government get its funding from? Are the sources sustainable? Let us look at two sources of government funds in health:

  • Donor funding while available, is usually least sustainable. Donor priorities may change, and with regional engagement, funds may be re-programmed to other priority areas. Donors in some instances end up supporting almost the entire health infrastructure and as discussed, the risk here is that if donor priorities change, governments and especially patients remain exposed to the risk that services will cease.
  • Taxation is another source of funds and considered sustainable as the government will continue to collect tax from an active economy. However there is very high demand for this central pool of funds by the various departments in government, from roads and infrastructure, to agriculture, to security and so on. It becomes very hard to prioritise health over education or national security.

 

2. Large payer pays:

This would be the next ideal position from a development perspective.  A large payer would be any organisation with a long term engagement in the country/community, and considers it worthwhile to bear the costs of such services as part of its operations. This could be a national government, local government, parastatal such as the national health insurance fund, or health service providers. For such organisations, the cost of mHealth could be considered part of their value addition for customers/clients/citizens/members. Insurance services for example can provide health messaging as complimentary or part of the insurance benefits received by members. This makes the mHealth service financially viable/sustainable because it rides off the back of another, broader service offering.

 

3. Individual pays:

This model is normally considered best by private sector entities as this is how their businesses operate. This is what motivates private entities to reach scale, expand their markets and enhance distribution. Perhaps this is where sustainability is most evident.  If a product or service is meaningful and delivers value, consumers are often willing and able to pay. Even low income households are known to spend on premium mobile services such as ringtones and caller back tunes. These services cost up to USD 0.40 in a month, if they subscribe for the duration of a year, they spend up to USD 3.6 – 4.8. To put this in context of mHealth, USD 3.6 could pay for up to 180 SMS messages at double the price of regular messages, and up to 120 messages at triple the cost of a normal SMS. What would 120 SMS translate to in terms of service? Three SMS a week for the entire 40 week duration of a pregnancy, or one message a week for the entire first 24 months of a child’s life (zero to two years of age).

So while the idea of charging end users for services still sends shivers down the spine of government and donor agencies, perhaps aiming at low cost services is a better way to expand the reach of health services to a country’s population. This is without overburdening the government, or the option for donor funding which is often unsustainable (funding available for periods of time, and for specific scope), or scalable (scaling donor funding could mean an entire parallel system to national health services).

We welcome your comments and thoughts on this subject.

Join the Conversation (2 comments)

  • Willie, great summary of the possibilities for sustainable mHealth solutions. From our research with GSMA, Palladium’s opinion is that sustainability (in most circumstances) will likely take the form of public-private partnership, with several partners bearing differentiated contributions of cost, time or other resources.

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