Ensuring That Health Care Reaches "The Last Mile"

“I’ve had a career of accidents,” says Craig Nakagawa (BA, International Studies, '89). “When I find something really interesting or cool, I chase it.” 

Nakagawa figures that’s the simplest way to explain how, on the way to Bangkok to pursue a journalism career, he ended up in Japan as an equity researcher for Lehman Brothers instead. Or how, after leaving Lehman Brothers to work for telecommunications start-up Teledesic, he ditched it all to co-found VillageReach, an NGO aimed at improving health care distribution systems in developing countries. 

Nakagawa credits Teledesic colleague Blaise Judja-Sato with the vision of VillageReach. “Blaise had this idea to do something related to medical logistics,” explains Nakagawa, “and he asked if I could help develop the business model.” Nakagawa, who had earned an MBA while at Lehman Brothers, created a model over dinner and figured that was the end of it. But within a year he and Judja-Sato were bouncing around on rutted dirt roads in Mozambique, visiting clinics in the most distant reaches of the country—what they refer to as “the last mile”—with Haitian health logistics expert Lionel Pierre. 

Neither Nakagawa nor Judja-Sato had direct ties to Mozambique. They learned about the needs of the African country from Nelson Mandela’s wife, Graça Machel, whom Blaise knew. (Mandela and Machel are VillageReach board members.) Machel, widow of the first president of Mozambique, “is huge there,” says Nakagawa. “She will always be the first lady of Mozambique.”

During their tour of last-mile villages, Nakagawa and Judja-Sato learned that none of the clinics had adequate supplies of vaccine and most suffered chronic equipment failure, impossible to fix because no one had cars or trucks. Equipment, such as refrigeration for vaccines, was kerosene-based and difficult to maintain and operate reliably, especially compared to LPG (propane)-based equipment. “The villages had no way to bring in LPG,” says Nakagawa. “Imagine you’re out in the North Cascades, in the boonies, with no vehicle. There’s no way to communicate with the outside world, and to get anything, you have to walk.” 

After that visit, Nakagawa and Judja-Sato went into high gear, designing a system for delivering vaccines and other supplies, monitoring and supervising clinic needs—including replacing broken refrigerators—and collecting data to track progress. “This isn’t complicated,” says Nakagawa. “Blaise and I don’t know anything about health care, but this is purely about logistics. It’s all about effectively and efficiently organizing and managing resources, since individual clinics don’t have the capacity to service themselves.”

Key to their plan was the creation of a business, VidaGas, to ensure reliable LPG supply in the unserved north of Mozambique. They figured that propane would be in demand not just by clinics but also by hotels, restaurants, and other businesses willing to pay for it. If propane sales took off, it would be a first step in making VillageReach’s health logistics solution sustainable. “As private sector people, we envisioned a private sector solution,” explains Nakagawa. 

Their plan worked. Seven years later, over 80 percent of VidaGas’s propane is purchased by private businesses and households. More important, the vaccination rate in “last mile” villages has risen from 68 percent to over 95 percent. 

VillageReach’s success has not come without rough patches. Mozambique’s Ministry of Health was initially opposed to the NGO’s plan, which involved centralizing resources when the government’s policy was to decentralize. The Ministry relented, says Nakagawa, because of Graça Machel’s support of the project. But just as the Ministry gave its approval, VillageReach’s major investor pulled out. “The next 18 months were trying,” says Nakagawa, “but by then we’d already committed. We had to scale back massively and come up with excuses as to why.”

VillageReach’s big break came in late 2003, when they competed in World Bank’s “Development Marketplace” competition and made the finals. “We asked for the maximum amount and got it—just shy of $250,000. Then, on the heels of that, we got a Gates grant of $3.2 million.”

The NGO, which now has 13 staff, is expanding to other countries. In Nigeria, it is conducting an assessment of the malaria treatment distribution system; VillageReach also works in Malawi, India, and Senegal, with similar projects in the works in South Africa and Tanzania. “It’s all about the distribution channel,” says Nakagawa. “That’s what we specialize in—last-mile distribution.”

So what do the staff of Mozambique’s Ministry of Health, initially skeptical, think of VillageReach now? “They’re very happy,” says Nakagawa. “They now want the same system—the way we deliver goods, monitor, and supervise—in every province. They are adopting our approach across the country.” 

To learn more about VillageReach, visit www.villagereach.net.