Social business?is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, no personal gain is desired by the investors. The company must cover all costs and make profit, at the same time achieve the social objective, such as, healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy, etc. in a business way.
The impact of the business on people or environment, rather the amount of profit made in a given period measures the success of social business. Sustainability of the company indicates that it is running as a business. The objective of the company is to achieve social goal/s.
Types of Social Businesses
Type I: focuses on businesses dealing with social objectives only.
Eg. The product produced is for the benefit of the poor.
Type II: can take up any profitable business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits.
Eg. The product could be produced by the poor but exported to an international market while net profits would go towards workers benefits.
On the other hand, traditional ‘business model’ refers to a strategy that companies make to increase their profit. A successful business plan helps you identify your target audience and gives an estimated cost of reaching them to sell your products. Know the importance of good business models for making a company successful and future-proof and the types of business models available in the market.
Different Types of Business Models
Over the years, companies have utilised different types of business models to meet their goals. Below you can find the most popular models that a venture uses to be sustainable:
- Business-to-Business (B2B): When your business makes its transactions and dealings with another business, it is known as a business-to-business or B2B model
- Business-to-Customer (B2C): This is one of the most common types of business models. Here, businesses sell their products and services directly to consumers.
- Subscription-based: Here, businesses offer their products and services as a one-time purchase, and the consumer has to pay monthly or annual prices. This type of business model allows enterprises to gain a regular income and allows customers to choose between making 12 equal payments and paying the entire amount at once.?
- On-demand: This type of model is most popular across internet-based businesses. The model is prepared in such a way that customers can get their answers/products with just a click of a button. Some examples of this business model are online airline and hotel booking service platforms.?
A social business in healthcare using a subscription model is an innovative approach where healthcare services are offered through recurring, usually affordable payments, allowing consistent access to essential medical services, especially for underserved populations. This model combines the social business focus of addressing healthcare needs with the financial sustainability of recurring revenue.
Key Features of a Subscription-Based Social Healthcare Business:
1. Purpose and Mission
- Core Mission: The primary goal is to provide continuous, affordable access to healthcare services. The subscription model aims to remove financial barriers to care by allowing individuals or families to pay a manageable fee regularly, instead of facing large, unpredictable bills for emergency or chronic care.
- Social Impact: Focuses on reaching underserved, low-income, or remote populations by providing consistent and preventive healthcare services, thus improving overall public health.
2. How the Subscription Model Works in a Social Business Context
- Low-Cost Monthly Payments: Patients or families pay a small, fixed amount on a weekly, monthly, or annual basis, ensuring access to a range of healthcare services. The price is set to be affordable, especially in regions or communities where traditional health insurance or private care is inaccessible.
- Prepaid Access to Services: The subscription typically covers a set of basic services such as consultations, vaccinations, primary care, screenings, and discounts on medication. Some models might also include remote health services like telemedicine, making it accessible in rural areas.
- Inclusive of Preventative Care: Subscriptions are often designed to encourage regular check-ups and preventative services, which can reduce healthcare costs in the long term by addressing health issues before they become more serious.
3. Types of Services Covered
- Primary Healthcare: Routine doctor visits, basic diagnostics, consultations, vaccinations, maternal and child health services.
- Chronic Disease Management: Regular check-ups and medication management for chronic conditions such as diabetes, hypertension, or asthma.
- Telemedicine: Virtual doctor consultations, which reduce the need for travel and help bring healthcare to remote or underserved areas.
- Preventive Services: Health education, nutrition counseling, regular screenings (e.g., blood pressure, glucose levels, cancer screenings).
- Specialized Care at Discounted Rates: Subscribers might get access to specialist consultations or surgeries at reduced fees compared to market rates.
4. Financial Model
- Revenue Structure: The social business relies on recurring subscription fees for revenue, ensuring a steady cash flow. The affordable pricing encourages large-scale enrollment, making the model financially sustainable over time.
- Cross-Subsidization: The model may employ cross-subsidization where higher-income subscribers or corporate partners pay slightly more, offsetting the costs for low-income patients.
- Partnerships: Partnerships with governments, NGOs, or philanthropic organizations can help subsidize costs or provide additional funding, making the service affordable for more people.
- Operational Efficiency: The fixed revenue stream enables efficient planning for resources, hiring healthcare workers, and ensuring the availability of essential drugs and equipment.
5. Benefits of Subscription Model in Social Healthcare
- Affordable and Predictable: Patients know the cost in advance, which removes the financial uncertainty of out-of-pocket expenses for unexpected medical events.
- Access to Preventive Care: Encourages regular health maintenance and disease prevention, which improves long-term health outcomes and reduces emergency care visits.
- Community Health Improvement: By focusing on prevention and regular care, the model can lead to overall improvements in community health, lowering the prevalence of preventable diseases.
- Sustainability: Unlike models that depend heavily on donations or grants, the subscription model creates a steady revenue stream that supports the long-term sustainability of the business.
6. Challenges and Solutions
- Low-Income Populations: For extremely low-income individuals, even modest subscription fees might be challenging. To address this, sliding-scale pricing or government subsidies can be introduced.
- Healthcare Infrastructure: In regions with underdeveloped healthcare infrastructure, the business may need to invest in or partner with local clinics, mobile health units, or telemedicine services.
- Technology Access: In rural or underserved areas, lack of internet or smartphone access could limit the use of telemedicine. Solutions like community health workers, mobile clinics, or call-based consultations could be implemented.
7. Examples of Subscription-Based Social Healthcare Models
- 1. One Family Health (Rwanda): A social business that operates health posts in rural areas. Families pay a small fee for access to primary care services through a subscription, which covers essential drugs, vaccines, and diagnostic tests.
- 2. Sevamob (India): Provides low-cost healthcare to underserved communities through a subscription model. Patients pay a monthly fee for primary care, telemedicine consultations, and mobile health services, with access to discounted lab tests and medication.
- 3. Penda Health (Kenya): A chain of healthcare clinics offering affordable services through a subscription model. Subscribers can access primary care, preventive services, and diagnostics at a fixed monthly cost.
- 4. Medic Mobile: Uses technology to provide health workers with a subscription-based service to support healthcare delivery in remote areas. Mobile tools help with diagnostics, communication, and referrals, making healthcare more accessible.
8. Key Metrics for Success
- Patient Enrollment: The number of individuals or families subscribing to the service is a critical indicator of success. Higher enrollment ensures a larger pool of resources and spreads the risk.
- Health Outcomes: Improvements in community health metrics such as reduced maternal mortality, lower rates of chronic diseases, and increased vaccination rates.
- Financial Sustainability: The ability to cover operational costs, reinvest in expanding services, and maintain a low price point while remaining financially viable.
- Customer Retention: Retention rates are crucial. The success of the subscription model depends on keeping patients engaged and subscribed over time, which requires delivering consistent value.
- Partnership Development: Collaborations with local governments, international NGOs, and private companies to subsidize costs or expand reach.
The provision of business and financial support is important to enable the establishment and growth of SBs including social enterprises. The need for initial investment capital upfront to pump prime the development of the organisation is central to the process. Financial support would normally need to be in the form of grants as new SBs are not generally in a position to be able to repay loans. Support could also include the provision of a resource pack for aspiring social entrepreneurs, as well as the creation of mutually supportive networks of social entrepreneurs including the provision of guidance and advice from those who are running successful social enterprises and other SBs.
Conclusion
The provision of business and financial support is crucial for the establishment and growth of social businesses (SBs), including social enterprises. Securing initial investment capital is essential for jumpstarting the development of these organizations. Financial backing typically comes in the form of grants, as newly formed SBs often lack the capacity to repay loans. Additionally, support may include providing aspiring social entrepreneurs with resource packs, as well as fostering networks of mutual support among social entrepreneurs. These networks can offer valuable guidance and advice from individuals successfully running social enterprises and other SBs.
A social business using a subscription model in healthcare can balance affordability, accessibility, and sustainability. By charging a predictable fee, it allows patients to access regular and essential healthcare services without financial strain, particularly in low-resource settings. This model emphasizes preventive care and community health, ultimately contributing to long-term improvements in public health while maintaining a sustainable business model.
