Why We Invested: Penda Health
The vast majority of Kenyans earn less than $10 per day working in the informal sector. These women and men don’t receive a steady paycheck, let alone health insurance or sick leave. Yet, like people everywhere, poor Kenyans regularly need medical care. At a bare minimum, they need access to basic primary health care. The ability to consult with a knowledgeable, dependable professional when they have a respiratory tract infection, diarrhea, or malaria, or just aren’t feeling great.
The Benefits of Good Primary Care
The payoff of getting people the medical care that they need is huge. According to the World Health Organization (WHO), increasing the number of primary health care interventions across low and middle-income countries could save 60 million lives and increase average life expectancy by 3.7 years by 2030. Or to look at it another way, by making primary health care more affordable we could reduce the risk of roughly one billion people from falling into poverty due to a health care emergency.
Not surprisingly, many of these benefits come from maternal, pre-natal and well-baby care. Less than half of women in Kenya attend the four antenatal care visits recommended by the WHO, and postnatal care programs are among the weakest of all reproductive and child health programs across sub-Saharan Africa. More than half of women do not receive any postnatal care and fewer than 20 percent receive postnatal care within six weeks. Both of which increase the risk of health complications. Low rates of postnatal care also affect children’s health. Sub-Saharan Africa has the highest under five mortality rate in the world. In Kenya, more than 25 percent of children do not get all recommended vaccines, putting them at risk of contracting infectious diseases that a simple, low-cost injection could prevent.
Why Healthcare is Hard to Access
The reason that women, men and children in Kenya and elsewhere often don’t get the medical care they need is because healthcare provision is fragmented and under resourced. In Kenya, less than eight percent of total public expenditure goes to healthcare and only a third of that is spent on primary and preventative care. With so little money, the government-run hospitals and clinics that are theoretically free can’t see all the people that come to them. Patients are turned away or have to wait for days to get care. Overall the Kenyan healthcare system gets a Net Promoter Score (NPS) of -5. While an imperfect comparison, the NPS of the United States’ healthcare industry is +58.
The alternatives provided by the private sector in Kenya aren’t much better. High-quality private clinics exist but are unaffordable to the majority of the population. As a result, people turn to single provider clinics (a single doctor or nurse running a private practice) and local pharmacists when they need healthcare. While these medical practitioners are accessible and affordable, they lack capital to invest in up-to-date equipment and facilities, and in many cases lack the expertise to deal with the full range of cases that they see and treat. Misaligned incentives can also result in wrong diagnoses and unnecessary prescriptions.
So, we know two things. First, access to primary care, especially during pregnancy and early childhood, can vastly improve health outcomes in Africa. Second, there is gaping middle ground for health care provision to the poor – something not reliant on government, sufficiently well-capitalized to offer competent care, and leanly structured to keep costs down.
And that brings us to one of our new investees, Penda Health.
Penda Health fills the gaping hole in Kenya’s primary healthcare system by offering a solution for low-income families. Stephanie Koczela and her partners started Penda Health in 2012 because they “wanted patient-centered healthcare to be available and accessible in everyone’s neighborhood.” They had seen first-hand the lack of affordable, quality primary care options for mass market consumers in Nairobi.
Penda has built its solution to making healthcare affordable for most Kenyans on two pillars. First, Penda uses mid-level providers (clinical officers, in other markets referred to as nurse practitioners) rather than physicians. Market rates for clinical officers are about 20% of physician rates, yet they are well trained to be first line primary care providers. The second pillar of Penda’s solution comes in ensuring constant quality oversight and clinical training for this group of clinicians. Penda supports their clinicians with a high-tech clinical decision support system and extensive training on how to use that system as well as a wide range of clinical topics. The tool provides support and clear treatment guidelines, allowing clinicians to manage a wide range of complex conditions and guides clinicians through 95 percent of all Penda visits. Penda’s in-person care combines consultation, laboratory, and pharmacy services for patients.
In addition, Penda makes providers accessible over the phone through their Pigia Penda
telehealth call center, Facebook, and a WhatsApp chatbot called Chat na Penda. Penda’s high level of accessibility helps influence patient behavior and produces changes in knowledge, attitudes and skills that help patients maintain or improve their own health.
To date, Penda’s 19 clinics have served over 400,000 unique patients across one and half million patient visits. Patients typically spend no more than an hour at Penda facilities, with a total wait time of less than 15 minutes.
Providing Various Financial Options
Eighty percent of patients pay with cash and the rest use insurance. The number of out-of-pocket payments isn’t surprising because 82 percent of Penda’s patients work in the informal sector and have no access to corporate insurance. However, over time, Penda expects the percentage of clients using insurance to grow as Kenya’s national health insurance scheme accredits more of Penda’s clinics. For patients that cannot afford care at Penda Health, the company reserves a small part of revenue that it deploys for crisis interventions. Given how embedded Penda is in the local community and the trust that they have built, the majority of Penda patients who can’t pay for their care at the time-of-service return to pay their bill at a later date.
Penda’s Bottom Line
Penda is able to offer services at 1/6 of the cost of what other private providers would charge for similar quality care. The typical visit costs about $12, inclusive of a site visit, pharmaceuticals (if necessary), and a follow-up call to check-in with every patient after treatment. Individual services range from a general consultation for $5 to a pregnancy test for $3-4 to a Pap smear for $20. Even more importantly, Penda’s clients express a high degree of satisfaction with the care that they receive. Penda clinics earned a Net Promoter Score of +60, better than the NPS of the US healthcare system!
Penda still has a lot of room to grow. In addition to having space to increase the number of patients seen at existing clinics, Penda plans to open new clinics in the coming years across Nairobi and second tier cities like Naivasha or Nakuru.
When they’re done, millions more Kenyans will have access to the care that they need at a price they can afford. We’re thrilled to now be partnering with Penda to bring that future to life.