Business models for global health: SmileTrain

SmileTrain: what’s next when mission is accomplished?
Student observations on SmileTrain’s success and future possibilities

In late 2010, a small team of MIT students took a look at the organization from the outside and, as a course assignment, prepared an executive summary aimed at its board of directors. This article presents their overview and assessment of the organization, and their thoughts on challenges and opportunities. Keep in mind that this a class assignment drawing largely on publicly-available materials and in some cases direct, though limited, interaction with the organization. We share the student’s work in the hopes that others will build on it in keeping with the creative commons license.

By Shirley Li, RachnaPande, Archana Raghavendra, Jenny Son

About SmileTrain

[Dr.] Mullaney estimates that Smile Train is close to reaching a historic break-even point: it will perform more operations each year than the number of children born each year in developing countries with cleft deformities. This means Smile Train may be well on its way to putting itself out of business. “That,” Mullaney says, “would be a dream.” –Bottom-Line Philanthropy, NyTimes, March 9, 2008

Smile Train was founded in 1999 by two friends and business associates, Charles B. Wang and Brian F. Mullaney, after the two were involved for years with a traditional mission group that turned away thousands of children every year for lack of funds.  Today, Smile Train focuses on a single problem: cleft lip and palate surgeries for children who otherwise would not be able to afford them.  As the world’s largest cleft charity, Smile Train is present in 78 of the world’s poorest countries.  In India in particular, almost 35,000 babies are born with cleft palate and cleft lip, 92% of them cannot afford the cost of surgery as vast majority of cleft births occur in rural India where poverty, illiteracy and misinformation are rampant and clefts are associated as a curse from the gods or a punishment of sins.  Smile Train partners with local hospitals and cleft surgeons to support free, high quality cleft surgery and ancillary treatment for children in India where the family may not be able to support it.  All hospitals and doctors go through a thorough accreditation process. Smile Train educates and trains doctors and medical professionals on recent innovations in cleft palate surgery techniques in order to provide the high quality and safe surgery. All surgeries are closely monitored through electronic medical records.

Smile Train’s model is that of philanthropic insurance. The founders have very effectively used the extremely visual nature of the cleft lip / palate to generate huge funds through micro donations. The funds are dispersed to the partner hospitals, who receive from Smile Train about $250 per surgery on average to cover a significant portion of each surgery as part of Smile Train’s cost-sharing agreement.  These partner hospitals are usually of good repute and situated so that patients coming from outside could access services easily. In India there are 180 such hospitals, spread over almost all parts of India, where almost 250,000 such surgeries been executed since its beginning in 2000. The quality of the operations is closely monitored. Smile Train uses sophisticated imaging software on before and after pictures of surgery to prevent against fraud. Smile Train owns award winning virtual surgery software to train its surgeons. The project encourages improvement of the training and infrastructure in various centers across the length and breadth of the region via grants and other schemes. The organization supports financially and participates in various symposiums that educate and train doctors and medical professionals by the hundreds, focusing on recent innovations in cleft palate surgery techniques.

Smile train has effectively leveraged technology to support its model and remain cost efficient. Being extremely cost efficient has allowed Smile Train to be a favored NGO for its donors. Smile train also partners with well known personalities like Aishwarya Rai, Conan O Brien to support its cause. The Oscar award winning movie Smile Pinki was also very effective in raising awareness and funds from the general public.

Accounting for Success

By most accounts, Smile Train has been fairly successful in its mission of mobilizing support, creating awareness and providing treatment of cleft palate condition in a cost-efficient manner. The New York Times described the organization as “one of the most productive charities, Dollar for deed, in the world”.  So first, in terms of being productive, since its inception in 1999, Smile Train has successfully treated 500,000 cases of the 4.7 million estimated cases worldwide. Of the 500,000 treatments, 250,000 were performed in India, one of its most successful outposts. India today has more than 250 cleft surgeons in 180 partner hospitals operate upon over 50,000 patients annually; a five-fold increase in just 5 years.  Second, in terms of being cost-efficient, Smile Train has reduced the cost-per-surgery by than 90%.  In India, it has enabled local doctors and nurses to become self-sufficient health practitioners who can provide ten times more coverage dollar-for-dollar.  Today, the average cost of each surgery is around 12,000 Rupees.   Overall, Smile Train is able to dedicate more than 80% of its financial resources to program services (the balance being fund-raising at 18% and management & general at 1.3%).   Finally, Smile Train also places utmost emphasis on the safety aspects and quality of care. While there is little publicly available data on the quality of Smile Train surgeries, its soaring popularity in countries like India is a good indicator of the quality of treatments.  Procedural wise, all of Smile Train’s partner hospitals and surgeons have to go through a thorough accreditation process to ensure safety and quality of care.

How is Smile Train able to achieve this success?

Smile Train is able to achieve mass treatment of cleft in a cost-efficient way for two fundamental reasons.  First, it strategically empowers local health practitioners to perform cleft surgery themselves, instead of sending missions from American or developed countries.  This not only reduced the cost-per-surgery massively (90% as mentioned in the previous section), it is a “far safer, faster, smarter and more productive way” to treat children with cleft.  By providing free equipment, free education, training, and on-going financial support, Smile Train enables local doctors and nurses to become self-sufficient health practitioners who can provide far more coverage dollar-for-dollar (10 times more as mentioned in the previous section).  Second, Smile Train manages itself “like a business”; globally it has only 43 staff with 24 based in the U.S., and Satish Kalra as Regional Director of South Asia oversees all of India’s partner hospitals, leveraging off cost-reducing technologies.  It is on the basis of its prudent and lean managerial backbone that Smile Train can dedicate so much of its financial resources (80% as mentioned in the previous section) to fund its strategic vision of 1) empowering local health practitioners through everything from building new operating rooms to investing in training and new equipment, and 2) providing patients with ancillary services and financial aids.

How does Smile Train successfully deliver its service?

The original concept of Smile Train was an actual train that traveled around developing countries with a singular focus – treating cleft lip and palate for free.  The goal was to empower communities by training native doctors that would reach out to the poorest populations spanning all corners of India.  Although the train concept did not materialize, Smile Train has successfully delivered these services by partnering with local hospitals.  The selection and accreditation process is rigorous and transparent to ensure safety and quality of care.  To date Smile Train has partnered with 180 hospitals and more than 250 surgeons, who have now performed 250,000 cleft surgeries in India.  Smile Train tailors its services to the poorest by providing stipends so that malnourished patients can eat well and pay for transportation to and from the hospital.  Outreach teams that spread awareness are led by trained social workers that create trust with families of patients.  In order to funnel as much money as possible into medical services, Smile Train maintains a lean cost structure as discussed in the previous section.

Open questions for SmileTrain’s future

The questions for Smile Train’s future in India are largely associated with growth and scale of the organization, as outlined below:

Reaching patients on the “margins”- Smile Train in focused on clearing the backlog of cleft patients in India.  As the current partner network saturates in urban/semi- urban areas, reaching the last mile in the remote rural areas can prove to be daunting. Smile Train’s model works today as it relies on existing infrastructure of doctors, hospitals, NGOs to partner and promote and deliver on its cause.  Smile Train will be limited by non-availability of this infrastructure in such hard to reach areas. Surmounting these challenges will require different strategies, perhaps even making infrastructure investments in remote areas. Costs can quickly burgeon, breaking the current model.

Maintaining standards of safety and quality – Technology is currently Smile Train’s backbone for ensuring quality and preventing fraud. More investments in scaling and enhancing technology and personnel will be called for as Smile Train expands its partner network in India.

Moving beyond cleft – As reaching the last cleft patient becomes more costly, Smile Train will have an incentive to shift its focus to provide other higher value-added services.  But if Smile Train takes this route, it runs the risk of alienating donors and other stakeholders that have a strong preference of focusing singularly on cleft. Also, Smile Train’s resounding success in India begs the question whether the model can be replicated to treat similar conditions, for example, prosthetics or hip surgery. While the shift in focus may hurt Smile Train’s brand, it may be a more pragmatic approach over attempting to reach the last patients on the margins, due to cost factors. Foray into cleft prevention could be another approach. Genetic factors, environmental issues, lack of adequate nourishment, especially folic acid during pregnancy are attributed as the leading causes of the condition.  As mothers/parents bring in their children for treatment, Smile Train could leverage the “point of sale” to impart education on possible preventive measures in the future.

Looking ahead: student thoughts

Based on our reflections, we recommend Smile Train to expand beyond cleft whilecontinuing to reduce the backlog of cleft cases. Reaching the cleft patients on the margins will be a cost prohibitive.  Smile Train should build upon its success in the area of cleft and venture into treatment of similar conditions to build a sufficient “critical mass” of treatment competencies.

In order to do so, as leaders, we would conduct a rigorous analysis of Smile Train’s current and projected operating costs as it scales its operations in India.  Next, we would be develop a thorough understanding of the greatest healthcare needs in India, and see if we could leverage Smile Train’s core capabilities to fill one of these needs.  Potential options include primary care, vaccinations, pre-natal and maternal care, prosthetics, and reparative surgery.  Once we have identified a universe of alternatives, we will analyze each one based on expected benefits and costs.  And finally we will do a comparative cost-benefit analysis across services to determine which service Smile Train should focus on.  Throughout this process, we will engage our stakeholders in order to create buy-in.  What we are proposing can lead to a fundamental change in mission, which cannot be carried out without the support of Smile Train’s donors, partners, and management team.

Download the accompanying student presentation on SmileTrain (pdf).

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