Read the Conversation
EF: What is the role UMSINSI Health Care plays in the Healthcare market in South Africa?
AW: I would define UMSINSI as a social enterprise powered by a commercial business. We achieve our social objectives via commercial business turning traditional business on its head.
The John Lewis model was originally set up to achieve social class reconciliation, and we have applied it to class, race, and gender, and if the intention is reconciliation, it can be achieved in a relatively short time frame. We cannot achieve meaningful social objectives if we are not a successful commercial business; we don’t want to be a charity because it makes us vulnerable to rely on charitable donations, which in today’s economy are decreasing. We want investment, support, and people behind us understanding that putting social objectives first will fix the business objectives, and they are intrinsically tied together. John Lewis’s son, Spedan, said capitalism suits human nature too well to be abandoned. Still, it needs to develop a conscience and if it doesn’t, the result will be a particular set of scenarios which is effectively the world today: a very angry youth and an outraged marginalized 99.9% world population, so the problem isn’t the ‘isms’ but the ‘ists,’ that is to say, the person is the problem, not the theory.
EF: What is the footprint Umsinsi Health Care has today?
AW: We are 23 people, and we have teamed up with the Department of International Trade of the United Kingdom (UK) to transform gradually from Umsinsi Health Care to a partnership which will be the John Lewis model, trying to emulate a classic pharma company from a structural perspective with research and development, sales, education and training, manufacture and production. We offer British companies an advisory service on how to set up a business in South Africa, and we can set up the business to the point where the client can come and pick it up, and we can even run the business for the client, employing a dedicated sales team and our services are personalized. British companies use distributors, and it is not working out very well as service and dedication are lacking. After ten years with CONVATEC, we learnt that we could structure the business with our social objectives coming first and driven to be a successful business in terms of the impact we have.
EF: If you were to develop your partner network, what do you look for?
AW: We want partners in the real sense of the word. We seek ways to synergize the two skill sets together to create better results, and we want them to want to come to South Africa, because Africa in general, is seen as unchartered territory and opportunity which it is, but it’s also arduous work. Sea freight is phenomenally expensive, and it’s a long shipping route, so there must be understanding and getting involved for the right reasons, not compromising on the commercial side of things because it is necessary to be successful commercially to achieve the social objectives.
EF: What are your competitive advantages?
AW: We possess an inside out knowledge and understanding of the entire country, private and public sector, rural areas, etc. We have looked into the surrounding markets and their different attitudes: Swaziland/Eswatini, Namibia, Botswana, and Zambia, in aid of this kind of challenge to create something more positive than a fragmented approach. Because we are obnoxiously ethical, this notion of doing business in Africa means you have to accept that a particular set of things is not true; things can be changed for the better. It is harder, of course, and probably means one doesn’t grow as quickly as we would have if we had fallen in with a few things, but eventually, we get there.
EF: What are the percentages of your business allocated to the private and public sector?
AW: Roughly 70-30 to the public, most of the industry is the other way around. We have been doing single pricing for eight (8) years now, so the gap between our public and private pricing has been borderline.
EF: Are you open to partner with companies from countries other than the UK?
AW: We have been approached by a company that works in diabetics from Cuba, which is fascinating. Presently, we are having a debate to take a national approach to fix this in the public sector first and then go private because already in private, there is careful management of the patient while in the public sector is the other extreme. There is so much room to work, but we have to modify and adapt and also accept that the provinces are terrible about paying, but they always pay eventually. Nearly all the private hospitals are now pushing for 60 days, so it can end up being 90 days from the day of the statement rather than the day of the invoice, so that’s a 3-month payment block for private so it is not that big a difference with the public. Western Cape is very good at paying on time, but North West might take 18 months. The other big challenge is For-ex (for export)- CONVATEC were never prepared to treat us as a subsidiary in terms of invoicing us as inbound, which they could have done. At the moment, everybody is charging in dollars or Euros, which leaves South African business very vulnerable due to the foreign exchange. We need a partner interested in actually coming to South Africa as being part of the market is necessary. The healthcare sector is worth investing in not because of what we can do, but because of what we have to do – there is an imperative to this. The South African government has acknowledged they can’t do this alone; they need to take the partnership approach to sort healthcare out. The private-public partnerships need to evolve as well, and there needs to be more trust between them, the relationships need to improve and grow, the government has to get into its head that business can be beneficial and vice versa as it is about providing access to healthcare to the South Africans.
EF: What does access mean to you, and how could it be increased?
AW: Access to me is something that is universal but also pragmatic; we have to be rational about the pricing, even before we get started because resources are finite, and as a business, we have to be prepared to be value-based, particularly in the decision making. I would be prepared to bring the price down if it broadened the access, we need to walk where we talk, and the entire healthcare sector must understand this. We have launched a Belgium probiotic cleaning and hygiene system to clean hospitals with probiotics that have better results than antiseptics and disinfectants. The product was developed in Italy, and the results were beautiful: a further 80% reduction in pathogens and a 50% reduction in hospital infections, and best of all, reductions in the antibiotic-resistant bacteria. In the six hospitals where it was tested, they save the disinfectants for the operating theatre and equipment and everywhere else they use probiotics. We are working on our portfolio looking at things like skin, adding up all the skin in the hospital, doctors, nurses, and patients it is the largest surface in the hospital, so we are probiotic in skin as well, and this is an environmental change in a health setting. It tips everything back in favor of the people and not only for the patients but the people who work there as well, so we have split the business in Umsinsi between patient care and healthcare professional care, putting products in the system and training in place to keep everybody in the healthcare setting well and safe.
We need investors as funding is critical, and a few investment companies have approached us. Healthcare is an excellent segment to invest in, and now we have a foundation interested, which makes sense to both sides as they need us to have an impact portfolio and be an impact fund. In terms of a business model, the best place to launch is from a social objective platform. By putting those objectives first, we are guaranteed a business partner that has longer-term objectives. At the moment we have the worse sort of competition we could wish for because it is all about Africans looking after themselves in the private and public sectors and the triple B. Legislation has not achieved what everybody wanted it to achieve so if we partner with a company that has social objectives, they will only sell the products that are needed. But basically, we need partners that are interested in South Africa that want to be involved because they genuinely want a partnership and want to see our healthcare sector move forward positively for the benefit of everyone -not least the business environment.
