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.
LESSON 1
A mix of equipment across your portfolio is needed to maximise revenue while responding to diverse needs
One of the earliest assumptions you may make is that you can standardise your equipment offer and scale it up or down depending on facility size. In practice, this rarely works.
Apart from size, facilities differ in demand volatility, power reliability, ward configuration, funding flows, and growth trajectory. A single “standard package” will either overspecify some facilities (wasting capital) or underserve others (limiting revenue and reliability).
A flexible equipment mix allows you to optimise production per asset, respond to changing demand, and build a model that works at both facility and aggregate level.
Five areas where getting it right makes the difference
Each lesson draws on real operational experience. Tips are grounded in specific grantee stories, with case studies, practical implications, and direct quotes from the field.
"Reality pushes back very fast on your ambition."
HealthPort initially described O2aaS as "Uber for oxygen," which helped communicate the idea quickly. But once deployed inside real hospitals, this framing proved insufficient. Assumptions embedded in the original model no longer held. The delivery approach had to morph very quickly as the team observed how oxygen was actually used, where bottlenecks emerged, and how wards functioned in practice. Configurations evolved quarter by quarter, driven by lived hospital realities rather than the original concept.
O2aaS cannot be deployed as a fixed, standard package. While core services and boundaries must be clear from the start, implementation needs to adapt continuously as real facility constraints and usage patterns become visible.
- Be explicit about what the service covers and what it doesn't, while keeping core services consistent across deployments
- Adapt configurations to real facility constraints without changing the fundamental offering
- Revisit assumptions after deployment and treat iteration as normal progress, not course correction
AFHIA found they were in a situation where it was difficult to track and account for their cylinders — they became difficult to retrieve, prone to damage or loss, and eventually constrained AFHIA's ability to adapt its delivery model. With assets dispersed across customers, unwinding the arrangement risked losing those customers entirely.
"Once a cylinder leaves, it's very hard to get it back."
Loaning cylinders to customers creates long-term operational and financial risk. Once cylinders leave your control, tracking, maintenance, and recovery become difficult — constraining your ability to rebalance your equipment portfolio.
- 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 rebalancing of loaned equipment
"We couldn't wait for someone to fly in."
AFHIA's oxygen equipment supplier was based overseas, while the plant operated in rural Uganda. Flying in technicians for faults was financially unrealistic. AFHIA learned to troubleshoot, repair, and maintain equipment internally, reducing downtime and preventing maintenance costs from overwhelming the business.
Dependence on distant equipment suppliers can undermine uptime and margins through delays and call-out costs when local technical capabilities are absent. Sustainable oxygen services require pairing equipment decisions with local technical capability from the outset.
- Design equipment choices and maintenance capability together — pair system selection with local technical capacity from day one
- 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
AFHIA installed oxygen equipment expected to operate with minimal day-to-day intervention. In practice, the system required frequent supervision, generated repeated alarms, and produced lower-than-anticipated output when supporting multiple facilities. Although technically functional, the operational burden proved higher than expected, affecting staffing requirements, reliability, and scalability.
"On paper it looked fine. In reality, it needed constant attention. Those things have real cost implications."
Equipment decisions shape staffing, operating costs, reliability, and scalability. Hidden supervision needs, maintenance burden, or output constraints can emerge at scale, eroding margins and limiting growth.
- Validate equipment performance under real operating conditions, including production capacity, maintenance burden, and alarm frequency
- Challenge technical assumptions through field experience before scaling
- Compare options based on total cost of ownership and operational impact, not headline specifications
AFHIA found that many small clinics disliked cylinders because they were heavy and difficult to manage at the bedside. Staff preferred concentrators that fit existing workflows. This led AFHIA to adopt mixed delivery models, combining cylinders and concentrators depending on facility preference and capability.
"One model doesn't work everywhere."
No single oxygen modality works across every facility. Equipment must fit how facilities operate in practice, not how they are expected to operate in theory.
- Diagnose usability barriers alongside supply gaps to ensure equipment fits real workflows
- Anticipate resistance to heavy or complex systems and adapt modality choices accordingly
- Segment facilities by operational fit and offer mixed modalities where needed
"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 service components that can stand alone and deliver value independently
- Match configurations to budget, demand, and operational readiness
FREO2 shifted from anecdotal reports to remote monitoring to understand real grid behaviour. This 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.
"What facilities tell you about power isn't always accurate. The data showed patterns we wouldn't have seen otherwise."
Perceived power reliability, seasonality, or demand patterns often differ from reality. Equipment and configuration decisions should be grounded in validated field data, not assumptions.
- Collect validated, facility-level data early to ground equipment and configuration decisions
- Use quantitative data alongside local interpretation rather than relying solely on qualitative perceptions
- Treat local contextual knowledge as what makes the data actionable, not a substitute for it
"What hospitals really want is that peace of mind — that oxygen will be there."
HealthPort learned early that while affordability mattered, healthcare facilities consistently prioritised reliability once the service was live. Facility leadership described the benefit in human terms: fewer late-night escalation calls, fewer weekend shortages, and less constant worry about running out of oxygen. As reliability stabilised, the commercial proposition became clearer. Predictability became the reason facilities stayed, renewed, and deepened engagement.
When oxygen becomes predictably available, behaviour shifts — oxygen is used confidently rather than cautiously. Innovation and technical sophistication only matter insofar as they strengthen confidence in supply.
- Lead with a clear promise of reliable oxygen availability, treating uptime and consistency as the primary offer
- Design operations to protect predictability, especially under periods of stress or peak demand
- Measure value through facility confidence and utilisation in practice, not technical sophistication
HealthPort identified a recurring pattern: cylinders were often labelled "empty" when still partially full. Through ward rounds and direct inventory checks, staff were shown how much oxygen remained and encouraged to continue safe use. This demonstrated that the service was not a volume-selling exercise but a reliability-building one.
"Once facilities saw oxygen didn't run out, everything changed."
Reducing wasted oxygen in a visible way builds confidence that the service is strengthening the oxygen ecosystem, not maximising short-term sales.
- Identify wasted oxygen that healthcare facilities have normalised — such as cylinders labelled empty when still partially full
- Reduce waste in a way staff can see and understand; visible improvement builds trust faster than reported metrics
- Make system efficiency visible, not abstract
"Missing a delivery isn't just bad business, it's dangerous."
Once facilities trusted AFHIA's delivery schedule, they would sometimes prevent other suppliers from delivering on the same day. This increased the stakes of every promised delivery — a delay was no longer just a service failure, it could leave a facility without oxygen entirely. AFHIA therefore treated delivery commitments as non-negotiable, building redundancy around promised schedules.
Trust is built through demonstrated performance, not persuasion. Once reliability is proven, facilities begin to reorganise care around the expectation of uninterrupted supply — which raises the stakes of every delivery.
- Lead with a simple promise that oxygen will be available — and expect scepticism until reliability is proven through delivery performance
- Treat uptime and delivery commitments as care-critical; build redundancy around promised schedules
- Allow lived experience to define value — facilities will deepen engagement once they see it working
"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, a mother believed oxygen meant her baby was dying — a common belief where oxygen was associated with end-of-life care. After engagement and explanation, her understanding changed. She later became an advocate, helping others see oxygen as treatment rather than a sign of death. A single person's perception shift rippled outward in ways that formal communication could not achieve.
Availability alone does not guarantee use. When oxygen is associated with death or last-resort care, communities may resist it even when supply is reliable. Perception change is a core part of demand creation.
- Anticipate resistance rooted in associations of oxygen with death or palliative care — this is common and directly addressable
- Integrate community engagement alongside clinical training, not as a secondary activity
- Support trusted local voices to reframe oxygen as a life-saving treatment
Early baseline assessments were met with resistance — staff worried data would be used for performance evaluation and initial figures were often approximate. As FREO2 demonstrated that data informed service improvements rather than scrutiny, resistance decreased. Facilities became more comfortable sharing accurate usage data, improving planning accuracy and helping to unlock latent demand.
"People were worried the data would be used against them. Once they saw it improving the service, they opened up."
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.
- Make it safe to surface operational issues and data early by removing blame and being clear about how information will be used
- Treat failures and reported data as system inputs that continuously refine SOPs and prevent recurrence
- Act visibly on reported issues so transparency becomes normal and sustained
"Clustering is what allows us to move oxygen without hospitals 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. When demand spiked at one facility, supply could be rebalanced from nearby facilities without disruption. Facilities experienced continuity while operational complexity was handled centrally.
O2aaS is fundamentally a logistics business. Expanding without footprint density increases servicing costs, technician strain, and transport overhead. Geographic clustering lowers cost per facility over time.
- Prioritise expansion within defined geographic clusters to protect margins and service reliability
- Consider hub-and-spoke models to shorten response times and enable shared infrastructure
- Build internal systems to manage surge demand and rebalance supply while keeping operational complexity invisible to facilities
HealthPort chose not to build all technical expertise in-house, instead relying on specialised engineering and legal partners embedded into site assessments and commissioning rather than used reactively. This reduced downstream failures and allowed HealthPort to scale without carrying unsustainable fixed costs.
"They had to be part of how the system works."
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
AFHIA did not initially anticipate the complexity of distribution. Over time, managing trucks, drivers, fuel costs, and routing became central to operations. By reducing unnecessary transport costs, AFHIA improved margins and reduced the effective cost of oxygen for customers.
"Distribution costs shape everything."
As networks grow, transport costs can quickly erode margins. Oxygen availability does not guarantee oxygen access — distribution and routing economics often determine whether oxygen can reach facilities affordably.
- Build explicit operational competence in transport and distribution rather than treating it as a secondary function
- Optimise routing, fuel efficiency, and driver management to protect margins as networks expand
- Make last-mile economics visible internally and treat distribution cost as a primary driver of pricing
"You can't run this from outside the 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 supply would not have been possible.
Formal approvals may enable market entry, but service reliability depends on trusted local teams who understand the context and can act quickly when conditions change.
- Make strong local delivery capability a prerequisite for operating in any geography
- Build teams that cover execution-critical roles and can respond quickly to contextual risks invisible from headquarters
- Treat local presence and decision-making authority as integral to service reliability
Over time, facilities began treating FREO2 technicians as part of the internal team. They were consulted early when issues emerged and were present during routine operations, not just breakdowns. This reduced the technical burden on nurses and allowed issues to be identified before they escalated into service interruptions.
"The technicians became part of the hospital team. Issues came up earlier, before they turned into failures."
Embedded technical support builds trust and frees clinical staff to focus on care. Familiarity allows issues to surface earlier, reducing emergency call-outs and protecting uptime.
- 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
- Use strong on-site relationships to surface issues early and reduce emergency call-outs
FREO2 encountered delivery partnerships where senior leaders agreed in principle, but delivery teams were unaware of or unprepared to act. This gap caused delays and unmet expectations. FREO2 shifted toward outcome-focused alignment discussions involving both leadership and execution teams before moving forward.
"We learned to align on outcomes, not just agreements."
Delivery partnerships fail when commitment exists at leadership level but does not translate into action by delivery teams. Alignment must exist across both levels and be anchored in shared outcomes.
- Validate commitment beyond senior endorsements by confirming ownership and capacity at delivery-team level
- Engage execution teams early to ensure alignment between intent and operational reality
- Anchor partnerships in shared outcomes and re-check alignment as roles and contexts evolve
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, not peripheral risk.
"These aren't delays — they define the business."
Import dependency exposes providers to long lead times and unknown costs. Delays in regulatory approvals and shipping can 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 where feasible
Early HealthPort contracts took several months to close due to layered legal language that triggered repeated back-and-forth. Over time, contracts were simplified and discussions reframed around what facility leadership cared about most: continuity of care and reduced operational risk. Sales cycles shortened dramatically, without increasing exposure.
"At the beginning, contracting took a very long time. Once we simplified things, decisions moved much faster."
Overly complex agreements slow adoption and create friction around payment timing. Shorter sales cycles come when contracts focus on operational essentials and reflect how facility leaders actually assess 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
"A signature doesn't mean oxygen starts flowing."
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 not only who could approve, but what sequence of actions were required before oxygen could actually be delivered.
Oxygen services are frequently shaped by sequential approvals, informal gatekeepers, and hidden decision steps. Understanding the full pathway is essential to avoid stalled implementation.
- Map full decision pathways rather than just identifying stakeholders — include 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, continuously updated to prevent stalled implementation
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.
"When there's a strike, hospital revenue drops immediately. If you don't design for that, the model breaks."
Healthcare facility revenues are rarely stable. Payment structures that assume steady monthly income transfer unnecessary risk to the provider.
- Anticipate revenue volatility from strikes, seasonal shifts, and fluctuating patient volumes when structuring payment terms
- Balance facility flexibility with safeguards for supplier liquidity — avoid rigid payment assumptions
- Use longer contract durations where appropriate to provide runway for both parties
"Need doesn't mean they're allowed to buy."
AFHIA initially assumed unmet medical need would translate into commercial demand. In practice, many facilities were accustomed to subsidised oxygen through central medical stores and were willing to wait weeks without supply rather than pay privately. Government and faith-based facilities located minutes from AFHIA's production hub were unable to buy oxygen at all due to procurement lock-ins. The constraint was not medical need — it was purchasing rules.
Subsidies, procurement rules, and institutional purchasing protocols often determine whether facilities are permitted or willing to pay. Clinical need and commercial demand are not the same thing.
- Test assumptions about who is allowed to buy and how — don't assume need translates into willingness or ability to pay
- Expect existing subsidised supply to suppress willingness to pay
- Treat procurement rules as demand constraints, not friction to be overcome
AFHIA began supplying light industrial customers such as welders, who paid higher prices and faced no procurement barriers. Revenue from these customers helped stabilise cash flow and subsidise medical oxygen delivery, allowing AFHIA to continue serving health facilities despite delayed payments and constrained budgets.
"Medical oxygen alone couldn't carry the business. The industrial customers kept the plant running."
In budget-limited public markets, medical oxygen revenue may be insufficient or too volatile to sustain O2aaS operations on its own. A mixed customer base becomes a revenue-stability mechanism that protects medical supply.
- Identify customers with fewer procurement constraints who can generate more predictable revenue
- Use higher-margin demand to support core medical supply
- Treat mixed customer models as a deliberate financial strategy, not an ad hoc workaround
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 and reinforced planned replenishment behaviour.
"We agreed on minimum oxygen thresholds with facilities. This changed ordering behaviour very quickly."
O2aaS models become unstable when facilities order reactively. Reliability is preserved by designing guardrails that prevent crises from forming, not by responding faster to them.
- Replace reactive ordering with clearly defined replenishment rules and minimum thresholds that trigger early action
- Define predictable delivery schedules as the operational norm so emergency ordering does not become default behaviour
- Allocate the true cost of emergency disruption through pricing and policy to reinforce preventive action
"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 — more complex to navigate, but with significantly reduced payment risk.
Facility-level willingness to pay does not guarantee reliable revenue. 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 — aligning with these mechanisms reduces payment risk even if it adds complexity