Oxygen-as-a-Service
Operator's Guide
Practical Lessons for Delivering Sustainable Oxygen Services, drawn from five years of experience across three organisations in three countries
Dr Aishat Adeniji, Co-Founder, HealthPort
“What health facilities really want is that peace of mind that oxygen will be there.”
Welcome
This guide is built from what actually worked, and crucially, what didn't.
For the last five years, FREO2, AFHIA and HealthPort have been trialling, and scaling service-based business models that ensure health facilities have reliable access to medical oxygen when it is needed. This is a curated selection of their lessons and practical tips. The content is entirely their collective wisdom.
What you won’t find below is a set of instructions, or a list of clear cut do’s and dont’s. We have found that delivering and scaling a successful Oxygen-as-a-Service (O2aaS) model relies on tailoring to the context and adapting to the real conditions that you find yourself in.
Therefore, the tips below are here to give you pointers and help you ask yourself the right questions about how O2aaS might work where you are, and give you confidence to go and find out for yourself!
What is Oxygen-as-a-Service?
Rather than a health facility buying oxygen equipment outright and taking on the burden of operating and maintaining it, the facility purchases an ongoing oxygen service. Providers deliver the full solution and take responsibility for installation, maintenance, monitoring, consumables, and clinical training. Facilities pay recurring fees based on service delivery outcomes, such as oxygen availability, and not the infrastructure itself.
The Organisations behind this guide
NIGERIA
HealthPort
On-site solar-powered oxygen generation and a hub-and-spoke cylinder distribution to facilities
HealthPort’s partner health facilities once met just 10% of their oxygen demand. Now, they have oxygen available 100% of the time.
TANZANIA, UGANDA
FREO2
Shared cost or subscription fee-based models providing O2aaS, alongside a hub-and-spoke maintenance model
FREO2 maintained 100% oxygen availability despite 215 electricity interruptions over a 3 month period.
UGANDA
AFHIA x ICChange
Solar-powered oxygen delivered through a hub-and-spoke model
AFHIA saw a 49% drop in child mortality from hypoxemia through their intervention across 20 facilities in Uganda.
The lessons
Five areas where getting it right makes the difference
Each lesson draws on the operational experience of respiratory care businesses. Tips within each lesson are grounded in specific stories, supported by case studies, and practical insights.
"Reality pushes back very fast on your ambition."
HealthPort initially positioned O2aaS as a subscription-based system, with fixed cylinder allocations determined by each facility's average monthly patient count. Early design decisions were informed by research and literature, drawing on existing evidence about oxygen systems. For instance, the initial plan standardised cylinder sizes across all facilities. While this simplified the model, usage patterns revealed that different sites required different configurations.
However, once the team started working directly with healthcare facilities, it became clear that the model needed to adapt. Oxygen use varied significantly across facilities, and day-to-day operations did not always align with the assumptions built into the original design. As operational realities became clearer, piping infrastructure was also incorporated into the system design. Over time, the service evolved toward a responsive, on-demand distribution model shaped by lived realities. These changes improved both clinical fit and commercial sustainability.
O2aaS models are built on a deliberate mix of equipment and supply types to balance demand and revenue. Control over your physical assets is therefore fundamental to maintaining commercial flexibility. Loaning cylinders to facilities ties up working capital and limits your ability to redeploy assets if necessary. Once cylinders leave your control, tracking, maintenance, and recovery become difficult, and your ability to rebalance your equipment mix in response to changing demand is constrained. Having strategies in place to track your equipment is crucial.
- Establish and enforce clear ownership and custody mechanisms for cylinders to retain control of physical assets
- Treat cylinder tracking as a core operational function, not an administrative afterthought
- When exiting a facility, proactively plan for the recovery and redeployment of loaned equipment
"We had to learn how to fix things ourselves."
AFHIA's oxygen equipment supplier was based overseas, while the plant operated in rural Uganda. Flying in technicians from overseas to address faults was financially unrealistic, and would have threatened to exceed revenue from oxygen sales. AFHIA learned to troubleshoot, repair, and maintain equipment internally, reducing downtime and preventing maintenance costs from overwhelming the business.
Plan from the outset how systems will be maintained day to day, and who will realistically do that maintenance. Dependence on distant equipment suppliers can undermine equipment uptime and margins, effectively making otherwise suitable equipment commercially unsustainable. Equipment that cannot be maintained locally constrains both scalability and the ability to optimise your equipment portfolio over time.
- Design equipment choices and maintenance capability together, ensuring every system selected can be sustained within local operating conditions
- Build local self-reliance by training teams to operate, monitor, and maintain critical equipment as part of daily workflows
- Minimise dependence on international call-outs, treating technical self-sufficiency as essential to uptime and cost control
"On paper it looked fine. In reality, it needed constant attention."
AFHIA installed oxygen equipment that was expected to operate with minimal day-to-day intervention. In practice, the equipment required frequent supervision, generated repeated alarms, and produced lower-than-anticipated output when supporting multiple facilities. Although the equipment was technically functional, the operational burden proved higher than expected, affecting staffing requirements, reliability, scalability, and long-term commercial viability.
No single system performs well across all demand profiles, and what looks technically suitable on paper may not generate sustainable margins in real operating environments. Beyond technical specifications, equipment choice must be assessed on total commercial and operational impact.
- Validate equipment performance under real operating conditions, including production capacity, maintenance burden, alarm frequency, and supervision requirements
- Challenge technical assumptions through field experience before scaling
- Aside from headline specifications, compare options based on total cost of ownership and operational impact
"We had to stop treating it as all or nothing."
FREO2 moved away from a binary "all-or-nothing" system offer after encountering contexts where full adoption was not feasible. Instead, components such as monitoring or flow management were offered independently. This allowed engagement with a wider range of facilities while maintaining operational credibility and service integrity.
When a full closed-loop oxygen system is not commercially or operationally viable, modularising the service allows you to deploy only the components that add value.
- Treat full-system deployment as one option rather than the default approach
- Identify components that can stand alone and deliver measurable value
- Match configurations to budget, demand, and operational readiness
- Segment facilities by operational fit and demand profile to optimise utilisation and revenue across your portfolio
"The data from the ground showed patterns we wouldn't have seen otherwise."
FREO2 shifted from anecdotal reports to remote monitoring in order to understand real grid behaviour. This shift revealed patterns of instability that facilities could not reliably report themselves. Local teams combined this data with contextual knowledge to adjust system configurations and maintenance decisions, enabling faster response when conditions changed.
Perceived reliability, seasonality, or demand patterns often differ from reality, and those differences materially affect system performance. Designing around inaccurate assumptions can lock you into an equipment mix that underperforms commercially.
- Collect validated, facility-level data early to ground equipment and configuration decisions
- Use quantitative data alongside local interpretation to ensure configuration decisions reflect real operating constraints
- Diagnose usability barriers alongside supply gaps to ensure equipment can be used effectively and fits real workflows
- Anticipate resistance to heavy or complex systems that may suppress usage and reduce effective demand
HealthPort learned early that while affordability mattered, healthcare facilities consistently prioritised reliability once the service was live. Before go-live, HealthPort encountered quiet skepticism. Facilities agreed to trial the service, but were watching closely to see whether oxygen would still run out. As reliability stabilised, behaviour changed. Facility leadership described the benefit of O2aaS as: fewer late-night escalation calls, fewer weekend shortages, and less constant worry about running out of oxygen.
Only after this experience did trust build. Facilities became more transparent about usage and constraints, and conversations shifted from "will this work?" to practical co-design. Predictability became the reason facilities stayed and deepened engagement.
"Once facilities saw oxygen didn't run out, everything changed."
AFHIA observed that once facilities trusted their delivery schedule, they would sometimes prevent other suppliers from delivering on the same day. This increased the stakes of every promised delivery. A delay could leave a facility without oxygen entirely. AFHIA therefore treated delivery commitments as non-negotiable, building redundancy and operational discipline around promised schedules, which became central to building trust and maintaining long-term relationships.
When oxygen becomes predictably available, it shifts behaviour. Utilisation and dependence increase with improved confidence in supply. Without this confidence, clinicians may hesitate to prescribe oxygen. That lived experience, and the increased use that follows, reveals a more accurate level of underlying demand. Furthermore, facilities begin to reorganise care around the expectation of uninterrupted supply, embedding oxygen into a daily clinical workflow.
- Lead with a clear promise of reliable oxygen availability, recognising that reliability can help unlock appropriate utilisation
- Design operations to protect predictability, especially under periods of stress or peak demand
- Treat uptime and delivery commitments as care-critical, and build redundancy around promised schedules to protect trust
- Measure value through facility confidence and actual utilisation trends in practice, not technical sophistication or specifications
HealthPort identified a recurring pattern: cylinders were often labelled "empty" when they were still partially full. Through ward rounds and direct inventory checks, staff were shown how much oxygen remained and encouraged to continue safe use. This reduced unnecessary refills and demonstrated that the service was not a volume-selling exercise but a reliability-building one.
In many facilities, oxygen use reflects habit and caution shaped by past unreliability. Staff may over-order, under-use, or misjudge stock, and these behaviours distort utilisation patterns and can, in some cases, suppress appropriate clinical use. Reducing wasted oxygen in a visible way builds confidence. When facilities see that the service is not maximising short-term sales, trust increases. That visible alignment supports more appropriate and confident use of oxygen, allowing underlying demand to surface more clearly.
- Identify patterns of wasted oxygen that facilities may have normalised
- Reduce waste in a way staff can see and understand, reinforcing that oxygen is consistently available
"People thought oxygen meant the patient was about to die. Once that belief changed, everything became easier. One patient even started explaining oxygen to other families."
In Tanzania, FREO2 encountered a case where a mother believed oxygen meant her baby was dying. This belief was common in the surrounding community, where oxygen was associated with end-of-life care rather than recovery. After engagement and explanation, the mother's understanding changed. She later became an advocate within her community, helping others see oxygen as treatment and not a sign of death. This increased acceptance at the bedside, and enabled more consistent use of oxygen where clinically needed.
When oxygen is associated with death or last-resort care, communities may resist it, limiting utilisation even when supply is reliable. Perception change is a core part of unlocking latent demand.
- Anticipate resistance rooted in associations of oxygen with death or palliative care
- Integrate community engagement and perception change alongside clinical training
- Support trusted local voices to reframe oxygen as a life-saving treatment
"People were worried the data would be used against them. Once they saw it improving the service, they opened up."
Early baseline assessments were met with resistance, with staff worried data would be used for performance evaluation. Initial figures were often approximate. As FREO2 demonstrated that data informed service improvements and wasn't for scrutiny, resistance decreased. Facilities became more comfortable sharing accurate usage data, improving planning accuracy and helping to unlock latent demand.
Data quality improves when facilities understand how information will be used and see it shaping real service decisions. Without trust, reported utilisation may understate real need, keeping latent demand invisible.
- Make it safe to surface operational issues and utilisation data early by removing blame and being clear about how information will be used
- Treat failures and reported data as system inputs for continuous refinement, accountability, and prevention
- Act visibly on reported issues so transparency becomes normal and sustained
"Clustering is what allows us to move oxygen without facilities feeling it."
Rather than expanding rapidly across Nigeria, HealthPort focused on deepening its presence within specific states. Dense clusters of healthcare facilities were supported by shared logistics infrastructure, reducing the marginal cost of serving each additional facility. When demand spiked at one facility, supply could be rebalanced from nearby facilities without disruption. Facilities experienced continuity, while operational complexity was handled centrally.
Intentional clustering of customer facilities allows infrastructure, vehicles, and technical teams to be shared across multiple facilities. When demand shifts, supply can be rebalanced within the cluster, protecting both uptime and margins.
- Prioritise expansion within defined geographic clusters before entering new regions to protect margins and service reliability
- Consider hub-and-spoke models to shorten response times and spread infrastructure and maintenance costs across multiple facilities
- Build internal systems that can handle sudden increases in demand and shift supply where it is needed, without facilities having to see or deal with the added complexity
"We didn't want vendors who only show up when something is broken… They had to be part of how the system works."
HealthPort chose not to build all technical expertise in-house, instead relying on specialised engineering and legal partners. These vendors were integrated into site assessments and commissioning rather than used reactively. This approach reduced downstream failures and allowed HealthPort to scale without carrying unsustainable fixed costs.
As you expand, building every capability in-house can inflate fixed costs and slow growth. Strategic outsourcing of specialised capabilities can reduce overhead, but only if vendors are embedded into service design, quality standards, and go-live processes.
- Outsource specialised technical capabilities strategically to control fixed costs while scaling
- Embed vendors early in deployment, assessments, and service design rather than engaging them transactionally
- Treat vendor performance and output as integral to core system quality and long-term reliability
"Distribution costs shape everything."
AFHIA did not initially anticipate the complexity of distribution. Over time, managing trucks, drivers, fuel costs, routing efficiency, and delivery scheduling became central to operations. Deliberately reducing unnecessary journeys improved margins and reduced the effective cost of oxygen for customers.
Oxygen availability does not guarantee oxygen access. Distribution, routing, and transport economics often determine whether oxygen can reach facilities affordably. When facilities are geographically dispersed, transport costs can quickly erode margins.
- Build real expertise in transport and distribution
- Optimise routing, fuel efficiency, and driver management to protect margins as networks expand
- Make the cost of last-mile delivery visible to your team and let it guide pricing and growth decisions
"If you don't have people locally who can act, the system stops."
FREO2 described local capability as a gating condition for operating in a country. In one context, upcoming elections created delivery risks that would not have been visible from outside the country. Local teams identified these early and enabled contingency planning before disruption occurred. Without people on the ground who understood political timing, facility dynamics, and delivery constraints, maintaining reliable oxygen supply may have resulted in more reactive and costly interventions.
Formal approvals may enable market entry, but service reliability and expansion depends on trusted local teams who understand the context and can act quickly when conditions change. Without local capability, disruptions — political, logistical, or operational — can increase servicing costs and delay response times, raising the cost per facility as your network grows.
- Make strong local delivery capability a prerequisite before entering or expanding to a new geography
- Build teams that cover execution-critical roles and can respond quickly to local contextual changes
"Issues came up earlier, before they turned into failures."
Over time, facilities began treating FREO2 technicians as part of the internal team rather than as external contractors. Technicians were consulted early when issues emerged and were present during routine operations. This reduced the technical burden on nurses, improved communication, and allowed issues to be identified before they escalated into more costly service interruptions.
Embedded technical support builds trust and frees clinical staff to focus on care. Familiarity allows issues to surface earlier, reducing emergency call-outs, avoiding costly breakdown responses, and protecting uptime across multiple facilities. Over time, this lowers the marginal cost of servicing each site and supports sustainable expansion.
- Make regular site visits a visible and consistent part of the service model
- Invest in continuity so technicians become trusted, familiar partners within healthcare facilities
"We learned to align on outcomes."
FREO2 described strategic delivery partnerships where senior leaders agreed in principle, but delivery teams were unaware of or unprepared to act on those commitments. This gap caused delays and unmet expectations. To address this, FREO2 shifted toward outcome-focused alignment discussions involving both leadership and execution teams, ensuring commitments were understood and resourced before moving forward.
Delivery partnerships fail when commitment exists at leadership level but does not translate into action by implementing teams. Alignment must exist across both levels and be anchored in shared outcomes that support timely, cost-effective delivery.
- Do not rely only on senior leaders saying yes — check that the teams who will deliver the work are ready, have the time, and know they are responsible
- Bring operational staff into the conversation early so expectations match day-to-day reality
- Agree upfront on what success looks like, and revisit that agreement as roles shift and you expand
"Regulatory approvals can easily take six months or more. Such timelines define the business."
FREO2 described regulatory approvals as a persistent bottleneck, with waivers sometimes taking six months to a year to secure. At the same time, shipping costs increased substantially, rising to as much as a quarter of total system cost in some contexts. These pressures forced regulatory and import dynamics to be treated as central to commercial planning.
If regulatory and customs processes are not factored into procurement strategy, the efficiencies unlocked through demand aggregation can quickly be eroded. Import dependency can expose providers to long lead times and unknown costs. Delays in regulatory approvals and shipping can significantly determine unit economics and undermine whether aggregated procurement delivers its savings.
- Plan for long and variable regulatory approval timelines and expect requirements to shift depending on the authority engaged
- Treat shipping, customs, and import processes as core cost drivers that directly shape unit economics
- Reduce exposure to delays and unknown costs by strengthening local manufacturing or supply options, particularly as procurement volumes increase
"At the beginning, contracting took a very long time. Once we simplified things, decisions moved much faster."
Early HealthPort contracts took several months to close due to layered legal language and dependencies that triggered repeated back-and-forth with healthcare facility teams. Over time, new contracts were simplified and discussions reframed around what facility leadership cared about most: continuity of care and reduced operational risk. As a result, sales cycles shortened dramatically, without increasing exposure.
Overly complex agreements slow adoption and can create friction around payment timing and accountability. Shorter sales cycles come when contracts focus on operational essentials and reflect how facility leaders actually assess and make decisions about risk.
- Design practical, focused contracts that reflect how facility leaders assess financial and clinical risk
- Reduce unnecessary dependencies and review loops that slow adoption
- Use each contract cycle to refine terms, strengthen alignment, and improve revenue predictability
"We started asking: if they say yes, then what?"
FREO2 repeatedly encountered situations where signed agreements did not translate into delivery. After what appeared to be final approval, additional requirements emerged that delayed implementation. This led to a deliberate practice of mapping the full decision ecosystem in advance, identifying what sequence of actions and permissions were required before oxygen could actually be delivered.
Setting up an oxygen service business is often shaped by sequential approvals, informal gatekeepers, and hidden decision steps. Understanding the full pathway to delivery is essential to prevent delays and stalled implementation.
- Map full decision pathways rather than just identifying stakeholders, including informal gatekeepers and sequential approvals
- Ask explicitly what happens after each approval and anticipate additional steps even after signatures are secured
- Treat the decision map as a living operational asset that is continuously updated to prevent stalled implementation
"When there's a strike, facility revenue drops immediately. If you don't design for that, the model breaks."
HealthPort observed that healthcare facility income varied significantly, particularly during strike periods when patient volumes dropped sharply. Models that relied on predictable monthly payments quickly became strained. In response, HealthPort introduced more flexible payment structures while extending contract lengths to three or four years. This reduced short-term pressure on facilities while giving the service enough runway to absorb volatility.
Healthcare facility revenues are rarely stable. Payment structures that assume steady monthly income transfer unnecessary risk to the provider. Sustainable O2aaS models recognise this volatility and deliberately balance flexibility with revenue predictability. Structuring payment terms and contract duration appropriately allows facilities breathing space during downturns while protecting supplier liquidity over the long term.
- Anticipate revenue volatility from strikes, seasonal shifts, and fluctuating patient volumes when structuring payment terms
- Avoid rigid payment assumptions by balancing facility flexibility with safeguards for supplier liquidity
- Use longer contract durations where appropriate
AFHIA initially assumed unmet medical need would translate into commercial demand. In practice, many facilities were accustomed to receiving subsidised oxygen through central medical stores and were willing to wait weeks without supply rather than pay privately. In some cases, government and faith-based facilities located minutes from AFHIA's production hub were unable to buy oxygen at all due to procurement lock-ins, even while waiting months for deliveries. The constraint was not medical need, but purchasing rules.
Clinical need does not automatically translate into demand you can serve. Subsidies, procurement rules, and institutional purchasing protocols often determine whether facilities are permitted, or willing, to pay — even in emergencies.
- Test assumptions about who is allowed to buy and how
- Expect existing subsidised supply to suppress willingness to pay
- Treat procurement rules as demand constraints, not friction to be overcome
"Medical oxygen alone couldn't carry the business. The industrial customers kept the plant running."
AFHIA began supplying light industrial customers such as welders, who paid higher prices and did not face procurement barriers. This demand was not part of the original plan. Revenue from these customers helped stabilise cash flow and subsidise medical oxygen delivery, yielding a 17% reduction in oxygen cylinder prices. This allowed AFHIA to continue serving health facilities despite delayed payments and constrained budgets.
In budget-limited public markets, medical oxygen revenue may be insufficient or too volatile to sustain O2aaS operations on its own. When structured intentionally, a mixed customer base becomes a revenue-stability mechanism that protects medical supply rather than distorting it.
- Identify customers with fewer procurement constraints
- Use more profitable customers to help cover the costs of supplying core medical oxygen
- See serving different types of customers as a deliberate way to strengthen your finances
HealthPort introduced a minimum-threshold rule requiring facilities to notify the team when oxygen dropped to a defined level, rather than waiting until depletion. Crossing this threshold triggered automatic internal response, even if facility leadership was unavailable. This reduced last-minute emergencies, improved surge management, and reinforced planned replenishment behaviour.
"We agreed on minimum oxygen thresholds with facilities, and this changed ordering behaviour very quickly!"
AFHIA operates a distributed cylinder model in rural Uganda, where emergency deliveries are costly and logistically disruptive. When emergency delivery was underpriced or too flexible, facilities defaulted to reactive ordering. AFHIA therefore applied premium pricing and fuel cost recovery for emergency requests. Over time, this reduced unnecessary emergency calls and reinforced predictable ordering behaviour.
"If emergency orders are underpriced, everything becomes an emergency."
O2aaS models become unstable when facilities order reactively. If the system allows oxygen levels to reach zero, or makes emergency delivery easy and inexpensive, reactive behaviour quickly becomes the default, transferring risk and disruption to the oxygen service provider.
- Move away from last-minute ordering by setting clear restocking rules and minimum stock levels that trigger early action
- Make regular scheduled deliveries the norm so emergency orders do not become routine
- Make sure the real cost of emergency disruption is reflected in pricing and internal policies, so teams are encouraged to prevent problems
"Willingness to pay doesn't mean ability to pay."
FREO2 initially explored facility-level payment models but found that while facilities were willing, they often lacked the ability to pay consistently. Managing many small, irregular payments created unsustainable overhead. This led to a shift toward models aligned with national budgeting mechanisms, even though this required navigating more complex policy and procurement environments.
Sustainable O2aaS models depend on aligning with how oxygen is formally budgeted and financed within the health system. Revenue design must reflect where money actually flows, not just where clinical demand exists.
- Test whether oxygen is budgeted as a clear line item at facility, sub-national, or national level
- Avoid assuming facilities can manage regular payments independently
- Engage actors who influence national or sub-national budgets
That’s a wrap
Good luck and we’d love to hear any reflections or feedback you have on any part of this guide. Please contact the team at oxygen@makingbetterfutures.org.
For an academic take on O2aaS, explore the following:
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| Scientific Paper |
Exploring the Role of ‘Outsourced Oxygen-to-the-Bedside’ in Expanding Oxygen Access for Patients
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| Academic Paper |
Pilot implementation of ‘Outsourced Oxygen to the Bedside’ models in five countries: a mixed methods impact assessment
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| Academic Paper |
‘Outsourced oxygen to the bedside’ in five countries – a qualitative implementation assessment
