Javier Okhuysen has set his sights on SalaUno becoming South America’s leading provider of low-cost, specialised eyecare
Two years ago former investment bankers Javier Okhuysen and Carlos Orellana decided that the world of private equity and high finance was no longer for them. They had a vision: to apply what they had learnt in the banking world and use it to set up a healthcare social enterprise in Mexico dedicated to restoring people’s sight.
‘We like to think that we became Jedis, putting our savings into really trying to change the world’
“I had the idea after reading the book The Fortune at the Bottom of the Pyramid, which discusses how new business models can be targeted at providing goods and services to the poorest people in the world,” Mr Okhuysen explains.
“We were working for Darth Vader in investment banking and decided that we wanted to put the money we had made into setting up a social enterprise that was sustainable in either healthcare or education. We like to think that we became Jedis, putting our savings into really trying to change the world.”
Force for good
In February 2011 the pair quit their jobs and headed to Tamil Nadu in India for two weeks to learn from Aravind Eye Care, a non-profit organisation whose aim is to provide high-quality, low-cost cataract surgery and glasses to some of India’s poorest people.
Back in Mexico, the business partners set up SalaUno and in the past two years the company has succeeded as establishing itself as one of the most innovative social enterprises in South America, with a goal to become the leading provider of low-cost, specialised eyecare across the continent.
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In Mexico, visual impairment is the second biggest cause of disability and blindness is a widespread problem, both socially and economically, despite the fact that 50 per cent of the cases are avoidable through cataract surgery.
There are currently 2 million untreated cases and annually 300,000 people go blind, while only 135,000 cases are treated each year. The cataract surgical rate per million people is 1,200 − much lower than the Latin American average.
Mr Okhuysen cites a recent report from Harvard Medical School, which found that in economic terms − on an average − a person who has cataract surgery can return the value of the surgery at least 12 times in a year.
However, the Mexican healthcare system is fragmented. In principle, all Mexicans qualify for either fully or partially subsidised healthcare provided by the federal government.
‘About 85 per cent of our patients are at the very bottom of the pyramid, and these people would not be able to afford the surgery’
Mexicans who are in employment are also eligible to use the health care programme administered and operated by the Instituto Mexicano del Seguro Social − the national social security institute. But until recently, millions of unemployed Mexicans had very little access to healthcare.
This changed when the government established Seguro Popular, or “popular insurance”, in 2004. Any Mexican can sign up and access to a broad package of basic medical services is guaranteed, along with medicine and coverage for some life-threatening illnesses.
The programme was designed to charge a yearly fee based on income but in practice hardly anybody pays because, the government argues, most of the participants are too poor.
The government agrees contracts with private providers to provide a range of services, including SalaUno for cataract surgery.
“About 40 per cent of our surgeries are subsidised by Seguro Popular,” says Mr Okhuysen, though he admits to being concerned as to how the government contract will pan out.
“We operate on patients for free and then we are paid by the government within 25 days. However, we haven’t been paid since November and we have received a letter from the government telling us to stop treating patients,” he says.
He is hopeful that the ongoing problems with Seguro Popular will be ironed out, but in the meantime SalaUno has carefully built up other funding streams in order to carry on operating.
“We have a subsidy from the non-govenrmental organisation of Cinepolis, the largest cinema chain in Latin America, and they fund 100 free surgeries in our hospital per month. About 85 per cent of our patients are at the very bottom of the pyramid, and these people would not be able to afford the surgery if it wasn’t for these subsidies. We also have a mix of paying patients that help us to do cross-subsidies and cover the majority of our fixed costs, and that’s why we can offer very low subsidised prices.”
Inspiration from industry
The company has one surgical centre in Mexico City with diagnostic “vision” centres based in non-governmental organisations and private companies. Mr Okhuysen is not embarrassed about the fact that the company also has patients who pay on a “tiered service scale”.
“If you pay more, then you get to choose the date of your surgery, you get to recover in a separate room, and you get some special treatment,” he says, adding: “If you pay less, then you just have to wait a little bit more. It’s still the same surgeon and the same consumables; it’s just on a service level that some things change.”
He says that the company took some ideas from the hotel industry and from low-cost airlines, and has even employed somebody from Disney to make coming to the hospital an “experience” − patients even get a “movie experience” in the waiting area.
‘Young doctors are prepared to break down barriers and do things differently to what has been done in the past’
The company also picks its patients carefully, only taking on low-risk cases because it does not have the capacity to treat patients with complex cataracts or who have other co-morbidities.
SalaUno has implemented a Lean operating model. Mr Okhuysen says he found rivalries between doctors − and across medical professions − were among the main barriers to setting up the company, and why healthcare is not as competitive as it should be.
“Doctors at SalaUno have high volumes and we have purposely employed young doctors with an average age of 33 because they are prepared to break down barriers and do things differently to what has been done in the past. But also because the productive life of a surgeon is finite and we need people that are young because they need to be mentally and physically strong.”
And if things go wrong?
“We are very data intensive and one of the main things we track is complication rates so doctors can benchmark against each other and against other hospitals,” he says
“For doctors to be able to be promoted in our hospital and to earn better salaries they are measured both on their productivity and on their complication rates.”
The company has grand plans, hoping to offer 75,000 surgeries a year by 2016 − its current run rate is 7,000, up from just 3,000 last September.
“If you think about it in economic terms, there really are few places better to put your money than into cataract surgery.”