Addressing Kenya’s Healthcare Crisis: Innovative Solutions for Financing and Accessibility by Checkups Cova

Interview with Renee Ngamau, Co-Founder and President, and Dr. Moka Lantum, Co-Founder and CEO of Checkups Cova

What is the state of the health sector in Kenya and Africa, and how would you assess it?

Renee Ngamau: For a continent with the youngest and most rapidly growing population, healthcare continues to be a major crisis. It is not just a crisis at the pandemic level but also at the most primary healthcare provision level. For example, in Kenya in 2023, Kenyans borrowed over 500 million US dollars to pay for healthcare bills. These were not just for large ticket items but also for basic healthcare, such as chronic disease management for diabetes, hypertension, and respiratory diseases. The Central Bank of Kenya has released statistics showing that remittances from the diaspora are primarily for healthcare for their families.

When you look at budgetary constraints, not just in Kenya but across Sub-Saharan Africa and many developing countries, as long as the national budget allocation for healthcare is under 17%, the government cannot adequately provide for its public in terms of outpatient primary healthcare. This is not likely to change soon, unfortunately, because we are facing difficult economic times globally. Healthcare often does not receive top priority in budgetary allocations unless there is a pandemic.

Between now and then, we need to find a solution that enables people to finance their healthcare. The issue is not just access in terms of having enough clinics, doctors, and medication, which is a budgetary issue, but also the ability to finance healthcare. Even if the best hospitals are nearby, they remain inaccessible and unaffordable to over 85% of Africa’s population. Of the remaining 15%, only a small portion can access private healthcare, leaving everyone else without adequate care.

The challenge is not just building healthcare infrastructure but also finding sustainable financing solutions. The WHO reports that by 2030, 50% of Africa’s population will suffer from non-communicable diseases. This, combined with financial constraints, means we will see not only poor quality of life and expensive medical bills but also the erosion of wealth created by the youth.

At Checkups Cova, we continually ask ourselves how we can solve these issues sustainably.

Let’s talk about Checkups Cova. What solution do you bring?

Renee Ngamau: We looked at the challenge of financing healthcare and how to resolve it for families, employers, enterprises, and institutions. The answer we have come up with is Checkups Cova. We are a finance-embedded healthcare benefits management platform.

What does that mean? We help enterprises, institutions, companies, employers, and businesses finance, pay for, and manage healthcare benefits. They can then pass these benefits on to their employees, who can share them with whomever they want—African style.

What do I mean by African style? We recognize that our family structure is not the commonly defined nuclear family. The person who works or runs a business today will be looked to by the rest of the family, including extended family, parents, grandparents, aunts, uncles, cousins, nephews, nieces. Additionally, within their community, they will be relied upon by their own employees and others for help with healthcare bills. We unlock the health benefits and allow the person who accesses them to distribute and share them with whoever is within their ecosystem. That is what we mean by African style.

So, we enable that distribution on our platform. Here is our magic formula: we address the question of cost. We ask ourselves, how do we create the greatest value for healthcare benefits? If you buy healthcare benefits in Kenya, you might pay 100 or 1000 shillings. But in the market, that 1000 shillings is subject to price fluctuations. We take that same 1000 shillings and maximize its value. We have figured out the formula to 4x the money paid onto our platform, so you get four times more value compared to the market rate. Your 1000 shillings becomes 4000 shillings worth of healthcare benefits, which you can distribute to whoever you need.

There are no exclusions due to age, no exclusions for pre-existing conditions, and no wait time between payment and when you can start enjoying the benefits. You can distribute them to whomever you want. This way, we address the issues of financing and distribution, which are currently the greatest barriers to achieving some kind of universal healthcare.

How do you answer those who say your solution sounds like insurance?

Renee Ngamau: First of all, we are not insurance, and we are very clear about that. We do not cover third-party risk, which is important. Secondly, as I mentioned earlier, we are able to multiply by 4 the value of your payment. I do not know where else you can pay a shilling, a dollar, a euro, or a kwacha, and get four times the value. We achieve this through our algorithm and by disrupting the current healthcare delivery system, which I can explain shortly.

To guarantee both price and quality, we control the end-to-end delivery of services. This means from consultation to labs, diagnostics, and even medication delivery, we manage the entire process. We can trace the entire chain from our end to the point where the customer, the beneficiary, receives the service and medication. We also do post-delivery follow-up.

Unlike traditional insurance, which makes money by hoping you pay more and utilize less, we do the opposite. You pay your amount, we multiply it by 4, and you use as much as you need to achieve good health outcomes. This is the true purpose of medical insurance and public healthcare delivery, which is what we aim to provide.

But people might wonder, how do you make your money if you are a profitable company? How do you answer that?

Renee Ngamau: Yes, we are a for-profit company, not a charity, because we believe that is the only sustainable way. There are two simple answers to this, which you may have figured out. First, our inventory against the cost of goods. Second, the delivery process.

Think about this: when you visit a doctor, what are you paying for? You are paying for everything associated with being in that clinic, including overheads like rent, electricity, water, and staff salaries. All these costs are factored into the fee you pay to the doctor. By eliminating these overheads, we reduce the cost of the service itself, plus delivery, and add a smaller markup that is much less than traditional overheads. This allows us to access inventory earlier and at a more affordable price.

Since we go directly from us to the customer, we eliminate the points where profit margins and overheads typically increase the price. This way, we can still make our markup. We do apply a markup, but it is not inflated by distributor, retailer, or additional delivery costs. The customer makes savings, we make our margin, and everyone benefits.

Checkups Cova is an amazing project, very CSR-oriented, and it aligns with what people worldwide are looking to invest in. What kind of investors are you seeking?

Dr. Moka Lantum: First, it is important to understand the magnitude of this opportunity. Every head of state in Africa has universal healthcare on their agenda, and every country is struggling to meet this goal. They aim for close to 15% of GDP, but the best are only reaching about 9%, leaving a 6% differential. The scorecard is red in every country. Major health systems and insurance companies are sitting on a ticking time bomb. Premiums are increasing 15% faster than any commodity in the market due to rising costs of labor, energy, transportation, rent, and overheads. This drives up healthcare costs.

The market for private insurance is becoming less profitable, especially in the outpatient sector, a market worth over $20 billion with profit margins under 5%. Can you name another industry like that? Here we are in 2024, with public sector financing for healthcare subpar and no quick fixes available. Adding more clinics raises costs, creating a checkmate situation. Meanwhile, the private insurance market faces a hyper-inflationary trend where collected premiums do not match rising claims costs—checkmate number two.

We are creating a solution to lower costs and increase access. We are pioneering advanced primary healthcare delivered at scale to reduce costs. Another key aspect is that 73% of households borrow before seeking care, often from informal sources, predatory lenders, or at high-interest rates. Banks and financial institutions are missing out on the healthcare market. Our platform creates an opportunity to access healthcare and financing via WhatsApp. We have built an ecosystem where health benefits can be traded. You spend $1 and get $4 worth of benefits. If you lack cash, a bank partner can finance it. This improves market efficiency for patients and households, giving $4 in return for every dollar spent on medicines and lab tests at home.

This platform enables banks to finance healthcare, health insurance companies to reduce exposure to outpatient benefits, and even national budgets to be managed more effectively. This creates a new possibility for advanced primary healthcare in Africa.

If this is not addressed, several things will happen before our eyes. The elderly will be excluded from healthcare solutions, with hypertension and diabetes driving premature deaths. Women, the primary decision-makers for family healthcare, will be most affected, borrowing to ensure their families receive care. Women business owners will face setbacks due to the healthcare crises in their families.

The impact is immense, so we must create an ecosystem that invites all sorts of capital, debt financing, and equity financing. This will unlock talent, technology, and disrupt the supply chain to get medicines to every home quickly.

So, what kind of investments are we looking for? We seek bold investors with a vision to make every dollar 4x in the African market and provide care. We aim for a $100 billion sector solution that enables government investment to multiply healthcare funds. A $10 million government investment could unlock $40 million in healthcare, providing millions with medicines at home. That is our bet, and we are looking for bold partners to join this mission.

Can you talk about your expansion plan? What is your geographical strategy?

Dr. Moka Lantum: We are currently focused on the Kenyan market to prove the concept because Kenya is one of the most mature markets in terms of health financing. Nearly 20% of the population benefits from public financing, and about 5% enjoys private care financing, placing it in the top bracket of mature healthcare systems.

We are developing our strategy in the Kenyan market, but any emerging economy in the Eastern, Central, or Western Africa can use our platform. We leverage IBM’s cloud infrastructure to distribute the solution at scale across Africa securely. We work with banking partners to initiate micro-lending and micro-loans at the national and regional levels, enabling us to penetrate new markets. Our supply chain partners provide access to labs and medication, allowing us to run our supply chain and offer medicines 30% cheaper than local pharmacies.

It is an ecosystem play, and entering a new country means finding the right local partners to manage the supply chain while maintaining the same distribution layer in terms of technology and financing partners. We have developed this solution as a Pan-African solution, and with the right financing partners, it is just a matter of time before we touch millions of lives daily, providing them access to care.

Any success stories you would like to share with us?

Dr. Moka Lantum: I will share a personal story, and then Renee Ngamau can also share one from her perspective. I think it is important to highlight these experiences. As a doctor, one of the most frustrating experiences in Africa is diagnosing a patient, requesting a lab test, and then facing delays because the patient cannot afford it. You need the lab results within the hour to help that person, but they might have to wait for three days because they could not pay for the test. When they finally can afford it, they might wait another week before they can buy the medication. Is that what we went to medical school for? This delay in care due to lack of financing is deeply frustrating and inequitable.

It is a common story for doctors in Africa: the ability for your medical knowledge to impact a life is dependent on the patient’s financial situation. This inequity is unacceptable. The frontier of primary healthcare will be driven by how quickly a patient can secure financing, not by how well the doctor is trained. This presents a significant opportunity on a personal level as well.

For example, if my house help comes to me every time she needs money for a medical bill, it becomes a distraction. With our solution, I can share the same health benefits with her. Whether it is for her or her child, we are promoting an equitable healthcare system, which is fundamentally a human right.

Renee Ngamau: We have seen many unfortunate stories where, but for $50 or $100, we could have saved a life. So, for me, coming from not just an enterprise lens, not just a for-profit perspective, but very much from that social impact point of view, this is not just a project. Checkups Cova is a lifesaver.

I want to tell you the story of one of the women who really underscored what it is that we are doing. For the purpose of this story, I am going to call her Maria. Maria was formally imprisoned and had to serve time for a petty, non-violent, poverty-related crime. She was selling vegetables outside the designated zone, and she was caught by the county and went to jail for three months because she could not afford the $30 fine. She had worked for over 20 years as a bank teller, and after retiring, her husband’s medical bills for hypertension had consumed all of her savings and all of her retirement. Now, as a small farmer, she was aggregating tomatoes, onions, and vegetables and selling them in the market. On this day, she just did not have enough money to pay for the daily license she had to pay for and buy his medication.

I met her when she was in jail and just about to come out through a project I volunteer for. When I listened to this story, the unfairness of it struck me. This woman, mother of three, grandmother of three, former banker, had been reduced to selling vegetables because of a medical bill for a man she loves and wants to be well. We started on the journey together. She needed to pay 2,000 shillings, the equivalent of $20 per visit for her husband. He needed to see the doctor twice a month. She also needed to pay 4,500 shillings, or $45, for the most basic lab tests, and 7,000 shillings every month for his medication. In total, she was spending close to 15,000-16,000 shillings every month, while making only 20,000 shillings from her work.

I said to her, Maria, let’s put you on cover. At the point when we put her and her husband on cover, they were choosing between eating and buying medication. Her husband would often refuse medication, hoping they could skip a few days, trying to maintain some dignity while putting food on the table. We put them on cover, asking her to contribute $30 or 3,000 shillings, and we 4xed that to 12,000 shillings. With this, we could provide a comprehensive 33-point wellness check, regular doctor visits, lab tests, and consistent medication. Three months later, her husband was no longer in a hypertension crisis. He had had two minor strokes by the time we reached him and owed the hospital 72,000 shillings. But in three months, he was able to reverse his hypertension numbers and come out of the crisis. Six months later, he called me and said, “I am off to work.” That simple call, from a 64-year-old man, was the most joyous moment, restoring basic dignity to his family.

Another story involves a house help whose employer took out cover for her and her son. The son had an injury at school, and when they came for treatment, we also ran a test for the house help. She had blood pressure of 215 over 117. We immediately started intervention and put her on medication at no extra cost to her employer. The employer initially worried about the cost, saying she could not afford to pay more than 40,000 shillings. When we told her it cost less than 10,000 shillings and she did not have to pay for it, the house help retained her job, continued dignified employment, and no longer had to worry about her healthcare. Even if she did not have that job, she could pay daily, weekly, or monthly, and we would continue to treat her as long as she could pay a little bit, and we would 4x it for her.

The solution we are creating is not just for employers and those who can afford insurance; it is for everyone in their ecosystem. It is for women like Maria, who are in prison because they did not have 3,000 shillings for a fine, spending 16,000 shillings on healthcare for a loved one. It is a matter of life, dignity, and equity. It is not just about saying the government should do something. It is about getting our hands dirty, our brains whirling, our hearts pumping to find a solution that works: not just at a micro level, but one that can be white-labeled and used at a government level, regionally, with development banks, and in conjunction with bilateral and multilateral donors. A solution that can be used for profit, for the highest level of impact for the greatest number of people. So that we can reverse the number from 85% not accessing healthcare to maybe just 3 or 4% not accessing paid healthcare. Then, governments only need to look for funding for the remaining 3 to 10% who are really, really poor. Now, we have changed not just healthcare; we have changed lives, saved lives, and become a little piece of history. For me, that is the most exciting part.

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