Dear all

With reference to attached case study , can any one help about best possible choice which I need to make about current financial crisis faced by clinic.

Appreciate a detailed answers with all facts per given in case.

Regards,

Chanakya

09-094 August 13, 2009 Empowering Lives in Kenya: The Chebaiywa Clinic Paul Cassleman, Burt LaFountain, Brian Newkirk, Akbar Thobhani In January 2009, David Tarus walked through the cow pasture, past his neighbors sitting in front of their mud houses and towards the small building that served as Empowering Lives International (ELI) Kenya's Kipkaren River headquarters. In his hand was a anonymous letter which, hours before, had been found pinned to the door of ELI's Chebaiywa Dispensary (the Clinic). The letter contained harsh criticism for the Clinic and its staff, accusing them of neglecting their duty to the community of miserly preoccupation with fee collection, of disregarding patients' needs and feelings, and of becoming deaf and blind to the requirements of the community. This was the latest in a series of headaches for Tarus, who days before had been charged by his organization's board with making the Clinic \"financially sustainable.\" As the popularly-anointed \"bishop\" of Kipkaren and director of ELI's economic and community development efforts in this rural western Kenyan village, Tarus knew that the letter did not represent the majority view. Still, in the context of financial pressures such vocal public criticism gave Tarus pause. Founded in 2000, the Clinic had grown into an important provider of basic medical care in the Kipkaren community. From its two buildings atop a hillock in the neighborhood of Chebaiywa, the Clinic served a catchment area with some 12,000 residents. Management had recently brought on a new clinical officer, installed electricity with solar backup, and sent one employee each to dental and optician schools. The Clinic was also running a huge budget deficit, and relied on external funding for nearly 75% of its operating expenses. Would the Clinic ever be able to support itself financially? Was it even possible for a community of rural maize farmers in western Kenya to support a clinic of this quality? Tarus had been speaking with several friends and co-workers about his options for improving the Clinic and its performance. The letter required a response, but first Tarus needed answers to several This case was prepared by Paul Cassleman, Burt LaFountain, Brian Newkirk, and Akbar Thobhani (MIT Sloan MBAs Class of 2009) under the supervision of Senior Lecturer Anjali Sastry and Lecturer Jonthan Lehrich. Copyright 2009, Massachusetts Institute of Technology. This work is licensed under the Creative Commons AttributionNoncommercial-No Derivative Works 3.0 Unported License. To view a copy of this license visit http://creativecommons.org/licenses/by-nc-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA EMPOWERING LIVES IN KENYA: THE CHEBAIYWA CLINIC Paul Cassleman, Burt LaFountain, Brian Newkirk, Akbar Thobhani key questions before he could reach out to the community at large and ask for their support in making the Clinic a long term-success. Political and Economic Context Kenya A nation of 38 million people, Kenya covered nearly 225,000 square miles, from the Indian Ocean at Mombasa in the east to the fertile Kenyan Highlands and Lake Victoria in the west, and from the verdant Masai Mara savannah in the south to the desert bordering Sudan and Ethiopia in the north. Kenya's fertile land had been occupied by indigenous farming tribes, Arab and European traders, and more recently German colonists (arriving in 1885) followed by the British (arriving in 1890). Since achieving political independence in 1963, Kenya had developed into a relatively peaceful and economically stable sub-Saharan state, though serious problems still troubled the nation. In January 2008, tribal violence broke out when claims of electoral tampering surrounded the presidential election between President Mwai Kibaki of the south- and east-Kenyan Kikuyu tribe and Raila Odinga of the Luo tribe, largely of western Kenya. Over 1,000 people died and a quarter million were displaced in the weeks that followed, largely in western Kenya from Eldoret to Kisumu. 1 Although this dispute was settled when Kibaki took Odinga on to be his Prime Minister, tension had not dissipated completely one year later. In addition to tribal governmental conflicts, corruption was seen as a widespread problem throughout the country. In 2008, Kenyans lived on a per capita GDP of US$1,800 (144,000 Kenyan shillings), and the nation ranked 144 out of 179 in the UN Development Programme's Human Development Index. 2,3 A 40% unemployment rate posed a considerable challenge to the country, which relied on agricultural products (maize, coffee, tea, sugarcane, beef) and some manufacturing for the bulk of its economic output. The capital city of Nairobi was known as a center of finance and trade for all of East Africa. The relative political stability of the country since independence was a primary reason for this important economic position. GDP growth in 2008 was estimated at 4.1%. 4 Central Rift Valley: Eldoret and Kipkaren Approximately 200 miles northwest of Nairobi on the Mombasa to Kampala road, the city of Eldoret served as the hub of the high and agriculturally fertile plains of the Central Rift Valley. While Eldoret was indeed known for its agriculture, its nearly 7,000' base elevation also made it the birthplace and training ground for Kenya's elite marathon runners. The village of Kipkaren, 30 miles west of 1 http://www.reuters.com/article/homepageCrisis/idUSL0743589._CH_.2400. 2 https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html#Econ. 3 http://hdr.undp.org/en/statistics/. 4 https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html#Econ. August 13, 2009 2 EMPOWERING LIVES IN KENYA: THE CHEBAIYWA CLINIC Paul Cassleman, Burt LaFountain, Brian Newkirk, Akbar Thobhani Eldoret, was typical of villages in this area. The majority of its approximately 12,000 residents were subsistence farmers, growing largely maize on an average of 1 to 5 acres of land. With maize yielding 180 bushels per acre at 240-400 Ksh (US$3-$5) per bushel, per capita incomes were often lower than the nationwide average. Detailed household income data can be found in Exhibit 1. For many families, the seasonal income and grain stores generated during the late summer harvest needed to last the whole year. As shown in Exhibit 2, land and livestock ownership were the largest portion of personal wealth, paying dividends in the form of milk, eggs, and meat. For most households, education was a major expense, and for larger families school fees could eat up more than half of their annual income. Exhibit 3 provides an example of a typical family budget. A minority of residents had access to electricity, although a majority owned mobile phones. And while a small portion of residents pulled water from clean wells or boreholes, most filled jerry cans from local streams and the Kipkaren River. Kenya's Healthcare System The majority of Kenya's citizens received healthcare through a multi-level system of government-run facilities. In general, patients received primary care from their nearest government health facility, usually a dispensary or health center, and were referred to more sophisticated facilities when necessary. Government health facilities included: Dispensaries. Staffed by a registered nurse. Diagnosed and treated mild malaria and flu, and provided simple outpatient services. Health Centers. Led by a clinical officer and run by a staff of nurses, technicians and other administrators. Provided outpatient and limited inpatient services, laboratory testing, maternal health services and minor surgery. District Hospitals. Served as a referral center for lower-order facilities. Provided a wide range of inpatient and outpatient services, including surgery. Provincial Hospitals. There were eight provincial hospitals in Kenya. National Hospitals. Kenya had two national hospitals: Moi Teaching and Referral Hospital in Eldoret and Kenyatta National Hospital in Nairobi. In addition to these government facilities, communities were also served by private, for-profit clinics and pharmacies (chemists) and also by non-profit clinics like the Chebaiywa Dispensary. Some larger towns and cities had hospitals run by missionary organizations, or specialist institutions such as the Sabatia Eye Hospital situated halfway between Eldoret and Kisumu. As in other developing nations, non-governmental organizations (NGOs) had set up disease-specific programs and infrastructure in parts of the country to treat patients for HIV/AIDS, tuberculosis, and certain other diseases. The city of Eldoret was the base for one such NGO, AMPATH (Academic Model Providing Access to Healthcare), a collaboration between the Indiana University School of Medicine and Moi University August 13, 2009 3 EMPOWERING LIVES IN KENYA: THE CHEBAIYWA CLINIC Paul Cassleman, Burt LaFountain, Brian Newkirk, Akbar Thobhani School of Medicine that had grown to treat some 70,000 HIV-positive patients at 18 sites in urban and rural western Kenya. 5 Healthcare in Kipkaren As in all of Kenya, the health problems for which residents of Kipkaren most often sought treatment stemmed from infectious disease. Malaria was responsible for 30% of outpatient cases and resulted in the death of 36% of children before they reached their first birthday. 6 Malaria, which was spread by mosquitoes, affected the population year round. However, the infection rate was the highest during and after the rainy season, which lasted from March to June, at which time malaria treatment could exceed two-thirds of all treatments delivered. HIV/AIDS prevalence was 6.8% in 2003, but was reported to have risen to 7.3% by 2007. 7 Hepatitis A, tuberculosis, typhoid and various diarrheal diseases were also common. For most patients, decisions pertaining to health care came down to price. During the harvest months of August and September, cash might be available for medicine, but after the harvest there was usually very little money left. Families might wait until symptoms became severe and then sell a chicken or goat to pay for services, or sometimes not visit a clinic at all. In addition to price, quality of service factored into decisions, as compassionate treatment, drug availability, drug quality and proper diagnosis through laboratory tests were highly valued by patients, even if they were at times out of financial reach. Finally, distance of travel and means of transportation (or lack thereof) could act as a major barrier to receving care. Transportation was primarily by foot, or via the hire of a motorbike or bicycle. For many, this meant that a trip to a medical care facility necessitated forgoing a day of work. Residents of Kipkaren had several options for health care (Exhibit 4). Most residents were within walking distance (