The Family Planning Association of India (FPAI), Dharwad Branch:
Constructing and Implementing a Medical Social Enterprise Model for Long-Term Financial Sustainability
Challenge
Sustainability of the clinic and organization
Solution
Building a strong base and transitioning into a medical social enterprise, strong business plan
Benefits - Continuation of FPAI services - Improved care and facilities
The Situation
FPAI Dharwad was launched in 1971 to provide family planning educational services in Dharwad district. In 1972, the Reproductive Health and Family Planning Clinic (RHFPC) was launched to meet local demand for these services.
FPAI Dharwad has traditionally been financially supported by funds from 3 sources:
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FPAI’s parent organization, the International Planned Parenthood Federation (IPPF), which covers organizational expenses such as staff salaries.
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The central government of India, which reimburses FPAI for some of its major services such as sterilization
(considered a permanent family planning method) for Below Poverty Line (BPL) clients.
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Revenue from its RHFPC clinic.
FPAI Dharwad
Reproductive Health and Family Planning Clinic
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Recent withdrawal of up to 52% of external funding and possibility of more cuts in the future.
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Current revenues from the clinic alone are insufficient to fully support FPAI Dharwad.
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Other externally funded programs support outreach activities of RHFPC (provides publicity) and education services are free.
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Revenue generation at the clinic may decrease in the future due to operational difficulties and lack of improvement and expansion of services.
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The clinic is the only revenue-generating arm
The Challenge
In the last few years, due to a) donor restricted funding to IPPF, b) demand for support from the unfunded countries and c) government funding scheme alterations, funding from the IPPF and the central government of India has dwindled significantly resulting in operational difficulties that are likely to significantly reduce the range and quality of services in the near future.
The sustainability of the clinic, as well as of the organization as a whole, is a critical issue at FPAI Dharwad today.
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Difficulties in raising capital investment to implement the business plan due to the donor restricted funding
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Difficulties in finding appropriate skilled manpower such as medical experts due to location and language barriers
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Publicity, especially in urban areas, due to health seeking culture of seeing their family doctors
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Clearing myths and misconceptions regarding medical procedures to motivate uneducated clients to choose modern methods over traditional ones (modern medical procedures are beneficial for the clients and also generate more revenue for the clinic).
The Solution
The innovation FPAI Dharwad is preparing, to achieve long-term self-sustainability, is to remodel the current not-for-profit clinic into a profit-generating medical social enterprise (MSE) within FPAI Dharwad. FPAI Dharwad will continue to operate as a non-governmental organization (NGO), keeping its mission of serving the poor and marginalized population intact. In the new model, the profit generated by the clinic will also be used to cover operational expenses of FPAI Dharwad as a whole.
The remodeling of the clinic into a medical social enterprise has been divided into two major steps: Building a strong base: establish a strong base upon which the clinic can expand and provide a good range of services for its customers. In 2009, RHFPC received seed funding of Rs. 13 lakhs from The Deshpande Foundation, which is being used to enhance basic yet important quality care issues such as:
a) Construction of a proper waiting area for patients b) Wards partition and counseling room renovation for improving patient privacy c) Upgrades for clinical equipments d) Management Information System (MIS): e-recordkeeping and monitoring & evaluation
e) Hiring of a hospital manager for management of the clinic’s operations and growth f) Enhancement of publicity via community level workers.
Taking steps to facilitate swift transition of the RHFPC to a medical social enterprise: capacity building workshops for all level of staffs, revision of roles and responsibilities of current staff and continuous brainstorming and innovative thinking among senior staff members. These steps are crucial to change attitudes, to be more receptive to changes, to take risks, to accept new approaches and ideas necessary to remain sustainable and successful in the long run. Business plan development: The first two phases of the business plan- a) financial analysis b) an exhaustive market study of the clinic. These analyses will provide a good estimate of the “status quo” of both the clinic and the market, which will then be used to conduct a new pricing study and operational efficiency analysis, leading to the creation of a new business model that incorporates research data and innovative ideas for service provision and organization.
A new business plan development breakdown
Present Profitability Analysis
+ Determine operational Profit & Loss of RHFPC as a stand-alone unit and breakeven of subsidiary
+ Determine current margins of individual services
Market study, New Products
+ Assessment of competitors within reproductive health sector (size of providers, clientele base, prices)
+ Consider quality of care and desired clientele services
New Pricing strategy
+ Create new above poverty level (APL) and (below poverty level) BPL price segmentation for services to increase sustainability of organization and maximize ability to service BPL clients
+ Consider cost recovery and quality of service
+ Determine investment required to increase APL’s Willingness To Pay
Operational Efficiency Analysis
+ Assess if appropriate data is collected and easily accessible for management decision-making for financial management and quality of care
+ Assess how to serve more clients (APL and BPL) independent of pricing structures
New Business Model
+ Encompasses recommendations from four sections above
+ Focus on implementation of practices and services that will make RHFPC self sustainable while also increasing its reach to BPL markets
The Results
More than 50% of the upgrades supported by the Deshpande Foundation seed funding have been completed. After establishing a strong foundation in the clinic for expansion of services and completion of the business plan, the clinic will be ready to undergo the transition from a not-for-profit service provider to a for-profit entity.
The new business plan implementation at the clinic will enhance its current services while slowly expanding other services as per the plan. Revenue generated from the medical social enterprise will slowly help the clinic move towards self-sustainability and later will also support the NGO’s administrative wing for overall organization’s sustainability.
About Family Planning Association of India
Founded in 1949, the Family Planning Association of India (FPAI) is a non-governmental organization (NGO) that pioneered the family planning movement in India. It is among the founding members of the International Planned Parenthood Federation (IPPF), the world’s foremost non-government service provider and a leading advocate of sexual and reproductive health (SRH) and rights with more than 149 member associations. The 41 branches, spread across India, operate through FPAI headquarters in Mumbai. Dharwad is one of 11 FPAI branches in Karnataka.
