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US$25 million a year for health systems research

15 May 2008, 10:46

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by Robert Walgate

Mexican businessman Carlos Slim has given half a billion dollars to set up an institute to seek new approaches to primary health care in Latin America. The mobile phone – one of the sources of the benefactor’s wealth – may play a leading but not exclusive role. RealHealthNews interviewed its Executive President, Julio Frenk.

>RHN: Julio Frenk, you’re President of the new Institute Carso de Salud, [the Carso Health Institute], based in Mexico but with an endowment that give you funds to spend in the whole of Latin America. But of course it’s not just you, is it – you’re assembling a team.

Julio Frenk: Yes. It’s 25 persons, including administrative support – so it’s a small organization.

>RHN: What kind of people are they?

JF: The Director is a very accomplished public health professional, Roberto Tapia, who served as Under-Secretary for all the prevention programmes in Mexico, when I was Secretary of Health in Mexico. It’s a mix of public health professionals with a few experts in grant making and philanthropy… of which there are very few in Mexico, because truly this is a very new field.

>RHN: ‘Experts in philanthropy’ – frankly I don’t know what that means!

READ ON: The Carso Health Institute

JF: It’s people who know the process of how to analyse grant applications, structure committees to make decisions, how to allocate the funds – it’s quite technical. And apart from the Board, chaired by Marco Antonio Slim, our benefactor Carlos Slim’s second son, it relies on two committees, an international advisory committee and a scientific advisory committee. The international committee has broad representation from the Americas and Spain, and meets annually; the scientific advisory committee is made up of people living in Mexico City as they meet at much more regular intervals and go over many of the proposals for their scientific merit.

>RHN: What is your actual funding – how much have you got to spend?

JF: Carlos Slim made a gift to the Institute as an endowment of US$500 million. Usually the payout, in almost every foundation in the world, is about 5%, which should allow you to conserve the real value of the endowment. That means we have a budget for the support of projects of the order of US$25 million a year.

>RHN: Is that significant, in Latin American terms?

The endowment of US$500 million “immediately places the Institute as one of the largest foundations in Latin America, in any field”


JF: It is very significant – it immediately places the Institute as one of the largest foundations in Latin America, in any field. But I have to say that Latin America, of all the regions of the world, is the one where there is the least amount of philanthropic giving – in relation to income per capita. Even in Africa, in proportion to income per capita there’s more philanthropic giving than here.

>RHN: That’s staggering! But I want to ask you something completely different now – how you hope to use the Institute to implement your vision, which you expressed at the Health Research Summit in Mexico in 2004, and many times since – of connecting evidence with policy-making and action. How is that going to work, in practice, in this region?

JF: For me philanthropy is another form of public service, but it has very many differences from government. It has been called the ‘third sector’, in a sense equidistant between government and private commercial enterprises. Its main strength is flexibility. You don’t have to face voters, or the same degree of bureaucratic procedures, and much more freedom that private enterprise to take risks, because you don’t have to make a profit or satisfy shareholders expecting their return. So philanthropy is really playing a huge role today in global health – not only because of the amounts of money but because of it is being spent with great flexibility, taking big risks.

>RHN: You must also have good relations with ministers of health and even presidents in the region.

“Philanthropy is playing a huge role today in global health – not only because of the amounts of money but because of it is being spent with great flexibility, taking big risks.”


JF: Yes – it is very important that while philanthropic organizations exploit their advantage of being flexible, they recognize that they need to work with government and private commercial enterprises. Because all the money that’s going into philanthropy, for example at the Gates Foundation where I work one week every month, is still very small compared to the scale of problems – or to the money that governments have to hand, or private commercial enterprises.

So to me the value added of philanthropy is the ability to take intelligent risks. It can demonstrate innovations that then should be transferred either to the government or to private enterprise.

>RHN: They’ll need to be scaled up.

JF: Exactly.

>RHN: Give me some examples of the sort of project that could be undertaken – or will be undertaken – by Carso Salud.

JF: The institute has six priorities – they’re very specific – but let me give you a couple of examples. One of the most interesting projects we have is a new form of organizing the delivery of primary health care, through what we are calling ‘social franchises’.

So these are units that are owned by the doctors and the nurses, in a sort of cooperative model of medical work, that are located in rural areas or poor suburban areas. The institute provides support in the form of a credit line – financial support.

Obviously there are thousands of experiences of small units, non-governmental for example, working in such areas. But the two main problems up to now have been that there is huge variation in quality; and because they are small they don’t have economies of scale – so they purchase drugs at very high unit prices.

Well in the business world, those two problems were solved with franchising. Franchises standardise quality, and then they aggregate the various units to create economies of scale.

>RHN: Very interesting.

“…the telecommunications revolution – that’s one of our top priorities. The largest share of our benefactor’s wealth comes from telecommunications – but we think it can be used to solve the health problems of the very poor.”


JF: So we’ve taken that idea and we call it ‘social franchising’. It’s franchising but it’s ‘social’ because its purpose is not to make a profit, just to be financially sustainable. The idea is we use those clinics to ask if in the 21st century, primary care could work like this. Because you know that in the 20th century, a lot of primary care became primitive care.

The idea is now to mobilize for example the telecommunications revolution – that’s one of our top priorities. The largest share of our benefactor’s wealth comes from telecommunications – but we think it can be used to solve the health problems of the very poor.

So these social enterprises would provide a platform for intensive use of mobile phones, with telemedicine to bridge the distance gap.

>RHN: I want to take a very specific case of a health problem, connected with poverty, in Latin America – as we have a story on it in this issue of RealHealthNews. It’s the problem of HIV/AIDS among the displaced in Colombia. Now there you have country that is more or less in civil war; you have a terrible challenge both with distributing health care and with these displaced persons. What kind of thing could be done by a group like Carso Salud, to help?

JF: Well our main role is to run demonstration projects, to demonstrate innovations in health systems. Obviously the problem you are addressing is mostly a problem of government and international humanitarian organizations – and also of the United Nations system – which have structures to deal with these problems and with displaced persons.

But what we can bring to that kind of situation, and in general the situation of populations that are marginalised or excluded from the main stream of health systems, is to use projects like the one I was describing – show specific innovations in the way services can be brought closer to these people.

For example telemedicine bridges the distance gap. That’s very relevant for displaced persons where you may have just one community health worker. If there’s one thing we know, it’s that community health workers are a great solution to problems if they are connected. They usually provide very poor quality if they are isolated. So providing connectivity between community health workers, or basic grass-roots clinics, to higher levels of complexity and knowledge in the health system is one of the applications we are working on.

>RHN: So that provides the community health worker with what – a sound base of information and advice, potentially the possibility to order needed supplies, and perhaps a stronger sense of community with professionals?

JF: Yes, it allows the worker to seek help if he or she is facing a problem with a patient that they can’t solve. They could get information or even send pictures to a call centre with specialists to get advice on how to stabilize a patient or even carry out emergency procedures to deal with an acute problem. That’s the sort of innovation we’re pursuing.

We’re what’s called a ‘second floor’ institution, not a direct provider of services, or a humanitarian organization, but we will invest in the design of solutions that can then be brought to scale either by government or others.

>RHN: So if there were groups with some clever ideas in Colombia about how to deal with the health of their displaced, they could apply to you to test their ideas out?

JF: Absolutely. That’s exactly our mission.

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