The Living Goods model generates retail revenues that pay for the products, a retail margin that provides motivating incomes for the agents, and wholesale margins that cover much of the field distribution costs. With this hybrid model Living Goods solves two of the most vexing problems in community health—how to keep vital products in stock, and how to pay the millions of needed health workers. As a result of this innovative and efficient system, Living Goods is dramatically reducing child mortality for a yearly cost of less than $2 per person reached.
While drugs are free in most public facilities, the cost of transport often exceeds the price we charge. Because we deliver to the client’s doorstep, the model is technically ‘cheaper than free’ for many. Customers are glad to pay for the convenience of home delivery. Customers also value us over many private providers with whom the risk of counterfeits is high. Agents who serve their customers well over time earn repeat business, make more money, and facilitate significant health outcomes.
A randomized study shows that charging reasonable fees is consistent with driving significant reductions in child mortality. Living Goods serves families living on $1-3 per day and the data illustrates that even in these poor communities clients are equally distributed across economic strata, suggesting that the model does not bias serving the more fortunate.
The lack of adequate funding for health workers and dearth of access to medicines across the highest child mortality countries represents a towering obstacle to improving health outcomes. Here is the bottom line: The 20 top OECD countries spend $3,000-$7,000 per capita annually on health. In the 10 least fortunate countries spending runs a paltry $30-$50 per year. At full scale this model costs less than $2 per person annually—an exceptional value for a system that reduces child deaths by as much as 27 percent. This is a proposition that leading practitioners in public across the world are starting to embrace.