Clinicas del Azucar

I am the CEO of Clinicas del Azucar. Born and raised in Mexico, I founded Clinicas del Azucar in 2010. Prior to founding Clinicas del Azucar, I spent most of my time as an MBA student working on how technology and innovation can help patients with chronic conditions. My private sector experience includes management consulting and as a continuous improvement manager with a multi-national manufacturer where I led the company’s innovation efforts for more than six years. I am an Echoing Green, GSBI, Ashoka and MIT Legatum fellow and recipient of the MIT TR35, recognized as one of the top 10 innovators under 35. I earned an engineering degree from the ITESM and an MBA from MIT Sloan.

The problem my team and I are committed to solving is to provide affordable and convenient diabetes care to the most vulnerable in society. In Mexico it is estimated that over 14 million people are diabetic and another 20 million are believed to have the disease and don’t know it. The current healthcare system is ill-equipped in helping patients properly manage their diabetes. Thus, the project we developed to combat this issue ironically involved creating a McDonald’s (retail-type model) approach for diabetes care. This is done by having all the medical professionals needed to provide holistic care in a location convenient to the patient. A large amount of data is collected from the patient in order to personalize a treatment for them at an affordable cost. As a result, patients are able to live normal lives and their probability of developing complications drops from 60% to 4%.

Clinicas del Azucar is working to solve the issue of providing quality and affordable diabetes care for low-income populations. In 2019, the International Diabetes Federation estimated that 463 million people have diabetes and this number has more than tripled during the last 20 years. In Mexico over 14 million people have diabetes (15% of the population). It is the number two cause of death in the country with at least 150,000 people dying due to diabetes, but this does not include the blindness, amputations, and suicides caused by the disease. Important factors impacting these statistics relate to diabetes management. Only 5% of the population successfully manages their diabetes. 40% of people have received no education in regard to diabetes, which leads to complications. Lastly, 56% of the affected are currently managing their diabetes very poorly. The current healthcare infrastructure in Mexico poorly handles the issue. The public sector is unable to properly care for those with chronic diseases and those patients pay out-of-pocket for their medications. Additionally, only 10% of the population has private insurance and can properly manage their diabetes. As a result, most of the population is currently unable to receive quality diabetes care in the country.

Clinicas del Azucar provides the Mexican market with an innovative business model approach that provides care to those in need at an affordable and convenient price. The business has four unique qualities that make it capable of providing this service. First, the project operates one-stop-shop clinics that offer patients a doctor, nutritionist, psychologist, lab tests, eye, foot, and kidney diagnoses, a pharmacy, and a retail store under one roof. The firm offers a subscription model that has an annual fixed-fee membership to increase the patient’s convenience while also reducing the patient’s cost significantly. With behavioral science and artificial intelligence, the company helps patients achieve standardized medical outcomes. The organization captures a high volume of data from the patient in order to personalize and optimize their treatment through the principles of evidence-based medicine. As a result, Clinicas del Azucar is able to provide patients with affordable, specialized, and convenient diabetes care. The firm currently has 16 clinics in the northeast and west of Mexico and it is rapidly expanding. Clinicas del Azucar is now the largest private provider of specialized diabetes care in Mexico.

Clinicas del Azucar has served more than 134,000 diabetes patients as of the end of the second quarter of 2020. Patients come from varied socio-economics groups with different levels of household incomes from the states of Chihuahua, Coahuila, Jalisco, and Nuevo León. 24.7% of patients come from the Middle Income group (households in this group make between $2,200 - $1,980 per month), 43.2% come from the Middle/Low Income group (households in this group make between $1,700 - $1,300 per month), and 28.1% come from the Low Income group (households in this group make between $800 and less than $170 per month). The organization engages and understands their patients in order to address their needs. Patients wait in public health institutions for three hours to then be treated by a doctor that may not be fully knowledgeable about the disease and this does not take into account travel time and lost income. As a result, the clinics are located in retail locations in the patients’ communities and one-stop-shop concept allows for patients to get seven consultations in one visit. Through focus groups with patients a price of $300/year for a clinic membership was developed based on their willingness to pay.

Clinicas del Azucar elevates opportunities for all by providing affordable, quality, and specialized diabetes care to those who are traditionally left behind. 71.3% of our patients are middle/low income segment and we seamlessly meet their needs. By using data to personalize treatment along with behavioral nudges to change their attitudes, beliefs, and behaviors of patients, they manage to control the disease. Their blood glucose levels drop, and they reclaim their lives. Patients are able to feel better, be productive members of society, and have the energy to interact with family and friends while preventing a downward spiral into poverty.

When I was growing up in Mexico, I dreamt of becoming a great engineer and changing the world. Before commencing my undergraduate studies, I volunteered in the rural villages of the Sierra Tarahumara to help the residents improve their health and wellbeing. Years later, I was studying my MBA at MIT and taking courses at Harvard’s School of Public Health. There I learned about how using technology can better healthcare accessibility and improve how the poor in remote areas get diagnosed. I was slowly becoming more interested in diabetes specifically as I worked on diabetes projects in Tanzania and afterwards for a consortium of hospitals in Boston. During these experiences I saw how technology and increased communication fostered improved health outcomes. During this time, I begun to talk more with my mom about her experience with diabetes. It was startling for me to learn that she was overextended and exhausted in trying to manage the disease. I then thought about the difficulty faced by the people at the bottom of the pyramid in managing this disease. Then I asked myself, “Why don’t we have a McDonalds (retail-type model) for diabetes care?” Thus, Clinicas del Azucar was born.

I’m passionate about this project because of my connection with my mom. She has always had diabetes, but I had no idea how much she was struggling to control the disease. She was overwhelmed and drained of going to different doctors and nutritionists. She was at the point of giving up —even if it meant she would die. I was stunned and wondered why diabetes care needed to be so complicated. Then I realized that if this was hard for my mom, who had access to the best private care, it must be extremely hard for the most vulnerable members of society. During that same time, I was being mentored in my graduate studies by Dr. Julio Frenk, who was at the time the Dean of the Harvard School of Public Health and an ex-Minister of Health for Mexico. He helped me refine the concept of an integrated care approach for diabetes that better served Mexican people’s needs. After I had developed the initial concept, he said to me, “Javier it would be shame if you didn’t return to Mexico to develop this (concept)”. I started working on this project because if I didn’t nobody else would.

I’m well positioned to deliver this due to my track record inside and outside this project. I studied my MBA at MIT and cross-enrolled at the Harvard School of Public Health. During this time, I worked in the field on diabetes project in Tanzania and Boston.  In my MBA Studies, I learned about the rising healthcare trend of disease specialization and management. This model of specialization would allow for a provider to centralize expertise and standardize care, making it more effective while simultaneous creating economies of scales, integrating technology, and creating more efficient processing innovations. I conducted a long research investigation into the subject and found that by combing all of these elements, I could reduce the cost of managing diabetes with a one-stop-shop business model. After I graduated, I worked on refining the concept for a year and launched the first clinic in 2011. During the last ten years, Clinicas del Azucar managed to become the largest private provider of specialized diabetes care in Mexico. My project has received awards and recognitions from the Schwab Foundation for Social Entrepreneurship, the World Economic Forum, Echoing Green, the Clinton Global Initiative, Endeavor, MIT, MIT’s Legatum Center for Development & Entrepreneurship, Innovations in Healthcare, the Global Social Benefit Incubator, Ashoka, and from MIT TR35 Mexico. The firm has been able to treat more patients every year at an annual growth rate of 63%. I have delivered results in the past and will continue to do so.

During mid-April when the World Health Organization recommended social distancing to combat Covid-19, many people were not able to attend their appointments for diabetes medical care in person. This became a problem for us, as the number of consultations declined but the number of calls inquiring for information grew by 700%.  Given this problem, I began to lead the team to develop the tools needed to attend to patients remotely by telephone and videoconferencing as soon as possible. In parallel, we rapidly implemented safety measures at each of our clinics to make sure we followed the sanitary guidelines. During the first week we experienced a 30% drop in in-person appointments. The next week, we experienced an increase in demand for remote consultations as patients did not want to lose their appointments. This allowed us to quickly pivot by introducing remote consultations as patients were eager to continue treatment. By late April, we fully recovered the number of consultations given and even saw an increase during the months of May and June. With a combination of remote and in-person consultations, I turned a potential crisis into an opportunity to continue helping patients stay healthy while they stay at home.

At the age of 17, I spent a year in the indigenous community of the Sierra Tarahumara. Living in such dire poverty without the most basic sanitary services, my life perspective changed. I witnessed several community members die from a lack of basic healthcare. This experience helped me plant the first seeds of my later social ventures and guided me toward solving social health issues. I founded and led an immersion project for the Sierra Tarahumara that brought volunteers to live and experience life in the indigenous community. The non-profit was committed to agricultural development, small business creation, and education. Being able to convince individuals to embark on this journey was challenging as the path was physically hard and the experience could be somewhat uncomfortable for some. I convinced large groups of students to make this life altering decision that marked them for the rest of their lives. This experience marked me as a human being and as a leader as I was managing hundreds of volunteers and had to keep them motivated as we worked to improve life in the indigenous mountainous community.

Clinicas del Azucar’s work is unique as it manages to reduce incongruities in traditional diabetes care through the one-stop-shop model while using new technology and additional process steps to further improve the client’s experience and medical outcomes. The clinics are located in retail locations with significant foot and vehicle traffic to make it more convenient for patients. The organization manages to conduct 7 consultations (laboratory, feet check, eyes checks, doctor, nutritionist, psychologist, and diabetes educator) in one visit while offering an affordable unlimited-use annual membership. The way the workflow of services is organized allows for a patient to complete a comprehensive visit in 90 minutes. This is a reduction in time for patients of about 80%. This reduction in time comes in part from new diagnostic tools to expediate the results of testing during the visit. This allows for clients to know exactly how they are doing without the need for a follow-up visit. The firm has developed “The Diabetes Nudge Lab” in order to develop and test interventions for patients. The firm collects over 2,000 variables per patients over the year and this allows for the patients to be segmented into different groups. Behavioral science-based nudges and machine learning are then applied to specific groups of patients in order to make continuous improvements to the organization’s approach and increase the likelihood of better medical outcomes. The firm managed to reorganize the traditional diabetes care process by emphasizing the value to the patient in the process.

Clinicas del Azucar’s theory of change involves aligning all of the clinics activities to allow for diabetic patients to lower their blood sugar levels in order for them to live better lives. The organization’s main service is the comprehensive care provided to patients inside the clinic. It also provides this service at an affordable price and at a location convenient to the patient. Once’s the patient receives care and education regarding diabetes their blood sugar drops. Early results from an ongoing 3 year Eli Lilly and MIT study led by Economics professor Jonathan Gruber on the firm’s care reveal that in the first six months of care patient’s HbA1c sugar levels drop by 1.8%. The New England Journal of Medicine reveals that a 1% drop in HbA1c is linked to a nearly 30% reduction in long-term complications of diabetes. As of the second quarter of 2020, the firm’s internal data shows that 66.1% of patients have an HbA1c sugar levels of below 7.5%. These results are very good as only 25% of diabetics in Mexico have the disease under control, while in the United States and other developed countries the rate is at about 60% according to the International Finance Corporation. If diabetes is not under a patient’s control, then the risk of developing complications is 60% but if it is, then the risk falls to 4%. The short-term outcome of this medical output is a better quality of life for patients as they are able to be healthier and have a better diet than before. In the medium-term, their risk of developing complications drops from 60% to 4%, In the long-term, patients are able to save more money as the cost of managing their disease is lower than it used to be and medical complications are avoided which allows for patients to be active contributing members of society. At the same time, the medical output allows them to have a higher life expectancy.

Clinicas del Azucar has 16 clinics and 134,913 patients as of the end of quarter 2 of 2020. In one year, there will be 22 clinics with new clinics in states of Leon, Queretaro, Puebla, and San Luis Potosi and approximately 170,000 patients will be treated through clinics and digital initiatives. In five years, there will be 100 clinics with new clinics being located in major Mexican cities and 400,000 patients will be treated through clinics and digital initiatives.

Within the next year Clinicas del Azucar’s goals are to scale to more clinics and to launch their firm’s digital initiatives. In order to treat more patients in Mexico, more clinics need to be opened. These clinics will be opened in different states, cities, towns, and neighborhoods in order to reach new patients that do not know about the project while locating the clinics in areas that are accessible to them. At the same time, telemedical initiatives will be created in order to reach patients in low-income and low-population density areas. These initiatives involve starting teleconsultations and developing an application for new and existing patients to completement our brick and mortar model and reach more patients.

Clinicas del Azucar’s five-year goals is to reach 100 clinics in Mexico, continue improving the digital initiatives, launching a 100% online membership, expanding into another country, and treating additional chronic diseases. In order to specifically cater to patients in low population density areas that would be unprofitable for the firm, a digital-only membership will be created to address those patients’ needs. Once the firm has grown large enough in Mexico, it will expand into other Latin American countries. Lastly, the firm will leverage its infrastructure to expand to manage other chronic diseases such as hypertension and cholesterol, as some examples.

Clinicas del Azucar faces various types of barriers that are time variant and independent from each other.

The first barrier is technical in nature and is relevant for only the first year. Assistance will be needed in order to develop the business’s digital offerings. This involves developing telemedicine initiatives from the ground up. Development can be delayed due to the learning curve from the company’s first foray into consumer facing technology applications.

The second barrier is legal in nature and relevant in the next five year. The firm has experience operating in Mexico, but it does not have experience in other neighboring countries. In order to adapt the firm’s current model in other countries, legal consul will be needed. Depending on the country it might be required initially or continuously throughout time.

The third barrier for the company is to maintain the patient-first culture and will come into play into the next five years. As the company quickly scales, it must make more active efforts to maintain the patient-first culture in new offices within and outside the country. One of the successes of the model has been organizational culture and a patient-first philosophy, which will be key to maintain during the aggressive expansion plan.

The final barrier is managing the capital needed to fund the scaling plan. The investment and working capital required to open a clinic is around $200,000.

To overcome technical barriers, the firm is working with the International Finance Corporation and Deloitte to locate partners to work in developing the relevant technology. Through these partnerships, the company will rapidly develop the capabilities to manage the firm’s digital initiatives.

To over overcome legal challenges in expanding to another country, the organization plans on partnering with a local law firm at a closer date. Additionally, the International Finance Corporation has great connections on this matter.

To overcome cultural challenges, we will be seeking to make our human resource division more robust and able to provide constant training both virtually and in-person as needed.

In order to overcome financial barriers, the firm plans on raising capital through debt and equity rounds. By doing this the organization would be able to continue to grow at a rapid pace and thus be able to reach more patients.

Clinicas del Azucar has worked with various partners in the past and is currently working with the International Finance Corporation (IFC), the Walgreens Boots Alliance, the Inter-American Development Bank (IDB), and in partnership with Eli Lilly and MIT economics professor Jon Gruber.

The IFC is an investor in the project, named the firm an “inclusive business” and ranked it as one of the firms with the highest grade of impact worldwide. It has also written a case study on the firm’s model for its efforts in ending preventable deaths and disabilities through Universal Health Coverage.

The firm has also successfully partnered with Walgreens in a pilot clinic in Ciudad Juarez five minutes from the US-Mexico border. The partnership consists of being side by side in the location and Walgreens refers patients to the clinic.

The IDB provides debt financing to the organization after going through its rigorous due diligence process.

In partnership with Eli Lilly, MIT economics professor Jon Gruber is leading a 3-year RCT (randomized control trial) to evaluate the impact of the Clinicas del Azucar model. The trial has been active for 18 months as of now and so far 2,200 patients have been recruited. The preliminary results have shown outstanding medical outcomes with an average A1c reduction of 1.8% (HbA1c sugar levels) in 6 months positioning Clinicas del Azucar among the best-in-class (at only a fraction of the cost).

The model manages to reduce the patient’s costs while adapting care to the conditions of the Mexican people. The average yearly cost of diabetes treatment is around US$1,000 and the organization manages to reduce this cost to $300 per year through an unlimited use subscription-based model. This is achieved by locating clinics in retail locations in the patient’s community. The clinic operates under a “one-stop-shop” model which provides patients with a doctor, nutritionist, psychologist, lab tests, eye, foot, and kidney diagnoses, a pharmacy, and a retail store under one roof. The organized workflow of services and proprietary software allows for patients to receive 7 consultations (laboratory, feet check, eye checks, doctor, nutritionist, psychologist, and diabetes educator) in 90 minutes, a reduction in time for patients of about 80%. After their appointment, patients can purchase their medication from the pharmacy and specialty diabetic products such as sugar-free snacks, shoes, and creams. The organization also captures a high volume of data from the patient in order to categorize the patient into a behavioral archetype. Then the patient’s treatment is personalized and optimized through the principles of evidence-based medicine. The results and data from the interventions are collected and this allows for continuous improvement to occur to refine treatment approaches for the patients. Patients want these services because there are no comparable alternatives in the market. Patients are better able to manage their diabetes while spending less money and time to get these results.

In order to reach financial sustainability Clinicas del Azucar needs achieve the right economies of scale. Currently the firm is able to fund the clinics and care provided through a combination of revenue from memberships and retail sales, grants, equity, and debt. The revenue generated by the clinics is able to fully cover all operating expenses and 80% of SG&A expenses. In order to be self-sustainable, the firm needs to continue to scale to reach the point that revenues fully cover expenses. The firm is expected to reach this point by quarter 4 of 2020. However, in order to continue to create new clinics a mix of revenue and investment capital will be needed. Eventually, the firm will reach a point that revenues can fully fund new clinics at the firm’s targeted expansion rate.

I am applying to the Elevate Prize to gain recognition for Clinicas del Azucar, exposure to the network, and to overcome barriers faced by the firm. Recognition of the firm by the Elevate Prize thru the media and marketing campaign will allow the organization to be more well known by those who want to be catalysts of positive change. Alongside, with the dynamic network provided by thru the prize more people will know about the firm. The network and exposure will signal to the world the significance of the work being done and it will help us commence new world-class partnerships. Which in turn helps us be better equipped to improve our existing offerings and grow through clinics and digital initiatives. The prize funding will allow for the firm to have the necessary capital to continue the expansion plan. The mentorship, coaching, educational training, capacity building, industry leaders, experts, and dynamic network provided by Elevate Price will catalyze the firm to be able to properly scale and become more agile. As we plan to grow to 100 clinics in the next 5 years it is important that the firm’s best practices get refined and that the culture is able to remain as strong in the first clinic as in the hundredth clinic.

I am seeking partners to help secure more funding for the firm, to improve our current capabilities especially our digital initiatives, to improve the firm’s recruitment capabilities, and to assist with the international expansion. With good partners we will be able to fund more clinics which will allow for more patients to have access to affordable specialized quality care. We seek mentorship, advice and partners to improving our existing model and especially in our digital initiatives. With help, the firm will be able to continuously improve its offerings but most importantly, with the proper partner our initial foray into digital initiatives will be even better.

Two partners that we look forward to meeting with would be Care2Communities and EPAM along with others. Care2Communities is an organization that has a “one-stop-shop” model of clinics in Haiti. Though they do not focus exclusively on diabetes they are a good model to look at as they are able to provide quality care in a country where nearly 60% of people live below the poverty line of $2 per day. Clinicas del Azucar and Care2Communities would greatly benefit from sharing best practices and collaborating in order to improve both organizations’ existing models. Meanwhile, EPAM’s work in the healthcare field is impressive as they are the largest tele-health provider in the world. Their work in patient engagement tools and incentives, integrated health solutions, virtual hospital experiences, and population health management and precision medicine are of interest to the organization. Partnering with EPAM would allow for us to greatly jump-start our digital initiatives. This would allow for us to provide an initial product greater than what the firm could do on its own.