Innovation in Health Finance
This month, we had the chance to discuss with Pradeep Kakkattil, Co-Founder Health Innovation Exchange. Mr. Kakkattil touched on the critical role the private sector and private financing can play in scaling access to healthcare and saving lives. The COVID-19 pandemic showed us how fragile and vulnerable how health care systems were, thus emphasizing the need for more resilitent systems to ensure our economic development and future are not imperiled.
What is the Health Innovation Exchange (HIEx)?
One out of two people globally don’t have access to essential healthcare services, and traditional models of delivering healthcare will not help us to get to the 2030 SDG 3 targets. The HIEx is a neutral facilitator that works with countries in identifying challenges and gaps in healthcare, particularly in the global South, and brings the power of innovation, technologies and entrepreneurship to address these. As a multilayered platform, it facilitates investments in high-potential innovations for health that help countries fast track towards the SDGs.
Private finance in health systems can be a sticky topic. What role do you think private investment should take in the health care sector?
Having worked on healthcare access for the poorest and most vulnerable now for over thirty years, I am convinced that the private sector and private financing has a credible and critical role in scaling access to healthcare and saving lives. COVID-19 has clearly shown the fragility of the health systems globally. It also highlighted that unless we build resilient systems for health, our economic development and future are at risk.
In fact, we saw over half a billion people being pushed into extreme poverty during the last two years of COVID. Therefore, we need to invest in building resilient systems for health to not only protect the developmental gains made over several decades but also to safeguard our future. That requires investing in building infrastructure and capacities for health leveraging innovation and technologies – from having real-time data that enables us to track disease outbreaks before they get out of control, to digital diagnostics and health to maximize reach and delivery of timely healthcare services.
However, one major issue is that the Low- or Middle-Income countries do not have the fiscal space to invest on the scale that is needed today, and development financing is still limited – annual ODA is around US 150B compared to trillions in private equity investments. There is then a need for sustainable business models where the private sector can invest in scaling access to healthcare and makes reasonable returns – without becoming exploitative – and ODA (philanthropic capital) could help de-risk investments from the private sector.
Such models will not only help frontload the much needed investments for health, but also bring the rigour, discipline and acceleration that traditional health funding doesn’t bring. I don’t think we have a choice: private investments in healthcare is good business. If we don’t invest in equitable health, it will be bad for business and our broader economic development.
You have chosen to focus on women entrepreneurs in the health system, why is that?
Too often we don’t realize the role of women in health systems – did you know that over 70% of the health workforce is female? We believe that its people in the system who know the challenges and can find solutions that are relevant to the local realities –that’s why we are focused on unleashing the potential of women entrepreneurs to accelerate access to healthcare. However, female entrepreneurs do not get equitable access to financing – less than 2% of the VC funding globally goes to women led startups – despite the fact that they deliver 35% higher financial returns! So investing in women-led health enterprises is a win-win as it delivers better financial returns and significant health impact.
I understand you are trying to harness the power of new fintech solutions to leverage private finance as well, can you tell us more about that?
We have just recently established the Women in Innovation Fund (WiNFUND) with several other incredible stakeholders, including Reckitt Benckiser, the Kofi Annan foundation, Eco bank foundation, and Tokenproof.
The Fund aims to mobilize resources which will go to women-led health enterprises in Africa through the launch of unique NFTs. The first NFT was designed by an incredible Rwandan digital artist focused on Africa and will be on sale in December. 100% of proceeds will be dedicated to supporting selected innovators and their health companies in seven countries in Africa. Apart from the funds raised through the sale of NFTs, we are reaching out to several partners from the private sector to channel their philanthropic capital to the WiNFUND to support women’s health entrepreneurs in Africa.
A similar collection of NFTs for Asia and Latin America is scheduled for launch in 2023 to support female health entrepreneurs in their respective region.
Apart from investments, the WiNFUND will provide significant support to accelerate the female entrepreneurs through the HIEx platform, including linkages with key health policy makers and funders in-country and globally. Reckitt, Eco Bank, the Kofi Annan Foundation and several private sector partners are committed to bring their system and staff expertise to support the innovators. I am really excited about the potential of the NFTs as it provides us with a way to bring together the web3 community coming from all over the world and its expertise to support acceleration of the health entrepreneurs. NFT holders will have access to unique community events, including at the UN, meeting with innovators in country and experiencing the impact that they are making, amazing merchandise, and the opportunity to shape the direction of the Fund and to contribute to equitable access to financing for women.
How can people help with the project?
The WiNFUND and HIEx would benefit immensely from expertise and insights of the SFG community. Here are a few ideas of how:
- Engagement and Advice: the WiNFUND investment is currently being finalized and your engagement in its design, due diligence of applicants and investment strategy will be of great value. Also, your availability to join the WiNFUND investment committee to guide investment selection (initially Africa, India and Indonesia and subsequently in other regions) will help strengthen the Fund in reaching its desired impact with a rigorous process.
- Pipeline: share pipelines of women-led health enterprises in Africa and India that may benefit from WiNFUND support.
- Become a partner of WiNFUND: HIEx is looking for mission-aligned partners committed to healthcare, women’s empowerment and scaling innovation for SDGs. Many of the women entrepreneurs will benefit from mentorship and support from your teams. We would also ask if some of you, your company or those in your networks would consider providing financial support to the WiNFUND from your ESG/SDG or impact philanthropy budgets to help HIEx in building up this platform and in advocating for greater investments in women-led health enterprises.
- Promote the WiNFUND NFTs: we launched the first of the WiNFUND NFT series for Africa on 22 September with the mint scheduled for early December. Please consider following @WinfundNFT on twitter and promote the NFTs with your networks – it’s great art by an African female artist from Rwanda and a good investment for SDGs. 100% of funds raised will go to supporting women led health enterprises.