Hospital Chains to Improve Primary Healthcare Access
Hospital Chains to Improve Primary Healthcare Access
Business Model Description
Invest in businesses engaged in running hospital chains across regions to improve and expand healthcare access with a focus on accessible and affordable multi bed hospital chains, especially in semi-urban regions. Examples of companies active in this space are:
Evercare Lahore opened in 2019 is a LEED-Gold certified hospital in Pakistan. The hospital is 240 bed and with multiple specialties. The investment has been made by Evercare a global healthcare investment group, wholly owned by the Evercare Health Fund, a USD 1 billion emerging markets healthcare fund (17)
IFC, a member of the World Bank Group, has invested USD 11.3 million as equity in Shifa International Hospitals Limited, a leading healthcare company in Pakistan, to help it expand and meet the needs of the country’s fast-growing population. (18)
The investment in Shifa gives IFC 12 percent equity in Shifa, a publicly listed company that operates one 600-bed tertiary care hospital and two other smaller hospitals, serving about 440,000 patients annually. It will help Shifa set up more hospitals and clinics and provide increased access to high-quality, affordable care.(18)
Expected Impact
Provision of improved healthcare delivery through establishment of hospital chains at pan-country level.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Pakistan: Punjab
- Pakistan: Sindh
- Pakistan: Balochistan
- Pakistan: Khyber Pakhtunkhwa
Sector Classification
Health Care
As per WHO, public health activities have persistently improved in terms of physical infrastructure and workforce in Pakistan, (1) private sector is responsible for bridging the gap of rising demand and missing healthcare facilities, serving 70 percent population. (2) However, due to the 2022 floods, almost 8 million people have been displaced and face a severe health crisis, requiring a significant increase in healthcare infrastructure for short-term to long-term healthcare needs in the country. (3)
Policy priority
Government of Pakistan (GoP) has initiated numerous programmes that prioritize health: Some examples are Universal Health Care by cards: Sehat Sahulat Card, Ehsaas Programme, Expanded Programme for Immunization (EPI), Polio Eradication Initiative and Covid-19 relief and vaccination. These plans represent the healthcare sector as a policy priority and need to be bolstered by improvements in healthcare infrastructure. (4)
Gender inequalities and marginalization issues
Women's and girls’ access to quality healthcare is persistent and has been severely affected first due to the COVID-19 pandemic and more recently by the floods. Access to healthcare services has been cut off, and recovery efforts have been actively deprioritized during the Pandemic. (5) During recent floods, these inequalities have been further aggravated as 0.65 million women were pregnant and 73,000 were expected to deliver in the immediate few months following the floods. (6)
Investment opportunity's introduction
The healthcare industry offers opportunities such as general and specialized Hospitals, and medical and surgical equipment. (7) The official development assistance for health has increased to USD 350 million in 2018 from USD 160 million in 2014. The expenditure on health was only 1.2% of GDP in 2019 which provides the private sector an opportunity to fill the gap. (8)
Key bottleneck's introduction
Financing gap is one bottleneck in growth of health care sector as GOP' expenditure is only 1.2 percent of GDP which is insufficient. In terms of financing gap for health care access in Sindh alone, with 100% Universal Health Care (estimated), the financing gap is USD 3.2 billion. (9)
Health Care Providers
Per 1000 persons, Pakistan has 1.1 physician, as against WHO's estimates stating at least 2.5 medical staff per 1,000 people to provide adequate coverage with primary care interventions. (4) Furthermore, 2022 floods have damaged 13% of health facilities, with 650,000 pregnant women and 4 million children suffering a major healthcare shortage crisis. (10)
Policy priority
The National Health Vision 2025 aims at universal access to quality essential health services and ensuring financial protection, focusing on vulnerable and delivered through resilient and responsive health systems. (11) Pakistan already lags behind with a 130/195 rank in Global Health Security Index (12)
Gender inequalities and marginalization issues
Post 2022 floods, there is an accentuated need for USD 126 Million worth health infrastructure and USD 34 Million worth prefabricated facilities like mobile clinics. (10)
The gender inequality in terms of access to healthcare facilties has worsened amid 2022 floods. Overall, 1460 health facilities have been damaged, of which 432 are fully damaged and 1,028 are partially damaged. Access to health facilities, healthcare workers, essential medicines and medical supplies is limited, especially for women and girls. (13)
Investment opportunity's introduction
According to a study in Pakistan, rural residents are more likely to visit a private facility as they are perceived to offer better quality services. Private sector provides healthcare to over 60%, while 30% constitute public sector for healthcare delivery in the country. Moreover, as of 2019, 53.8 per cent of total healthcare expenditure in Pakistan is out of pocket, compared to 18.1 per cent as global average, which may severely impair the financial health of households, particularly for those from the low-income segment. (14) (15)
Key bottleneck's introduction
In Pakistan, investors face regulatory risk, lack of transparency, weak contract enforcement and difficulty finding reliable local partners. (16)
Health Care Delivery
Pipeline Opportunity
Hospital Chains to Improve Primary Healthcare Access
Invest in businesses engaged in running hospital chains across regions to improve and expand healthcare access with a focus on accessible and affordable multi bed hospital chains, especially in semi-urban regions. Examples of companies active in this space are:
Evercare Lahore opened in 2019 is a LEED-Gold certified hospital in Pakistan. The hospital is 240 bed and with multiple specialties. The investment has been made by Evercare a global healthcare investment group, wholly owned by the Evercare Health Fund, a USD 1 billion emerging markets healthcare fund (17)
IFC, a member of the World Bank Group, has invested USD 11.3 million as equity in Shifa International Hospitals Limited, a leading healthcare company in Pakistan, to help it expand and meet the needs of the country’s fast-growing population. (18)
The investment in Shifa gives IFC 12 percent equity in Shifa, a publicly listed company that operates one 600-bed tertiary care hospital and two other smaller hospitals, serving about 440,000 patients annually. It will help Shifa set up more hospitals and clinics and provide increased access to high-quality, affordable care.(18)
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
< 5%
There is a need for almost 1500 health facilities that have been damaged by the floods (13)
Revenue in the Health Care segment was projected to reach USD 126.40 Million in 2022 and is expected to grow at CAGR of 3.88 percent during 2022-2025, resulting in a projected market volume of USD 141 million by 2025. (19)
Indicative Return
> 25%
In case of Pakistan, in 2022 the revenue generated by healthcare sector is USD 126 mn and it is projected to reach USD 141 mn by 2025. Investment is also expected to increase to fill the financing gap in just one province, i.e., Sindh, is USD 4 mn.
Ministry of Commerce and Small and Medium Enterprise Development Authority's Pre-feasibility studies for local and foreign investors estimates an IRR of 40% for private hospitals (20)
Investment Timeframe
Short Term (0–5 years)
From Small and Medium Enterprise Development Authority's pre-feasibility the payback period in 3- 4 years. The first year is usually spent in establishing the setup in multiple locations and hiring the HR. For 100% operations and health network to generate returns, almost 3-4 years are required. (20)
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
In the covid, post-covid and post flood scenario, immense pressure has been observed on healthcare facilities and workers. Such scenarios have raised several concerns on healthcare system's capacity to handle crisis and aggravated the need for improvement. (21)
Increasing healthcare facilities in the country can support the government's priority of promoting Sehat Sahulat Card i.e., a scheme for the poor to enable them to access required health-care services in a swift and dignified manner without any financial obligations. (22)
Rapid urbanization, epidemiological transition and dual burden of disease has highlighted the inefficiencies in the healthcare system. Furthermore, determinants of health like illiteracy, pervasive inequalities, poverty and unemployment overburden the healthcare system. (21)
Gender & Marginalisation
Women in Pakistan lack access to health facilities, which increases their risk of contracting diseases or illnesses. Factors like limited autonomy in household financial decision-making, disapproval of unassisted travel and long travel time necessitate the development of health facilities. (23)
Low prioritization for spending on women’s health and inadequate presence of female health providers are identified as barriers to access of healthcare for women. (23) This need has been further aggravated due to the 2022 floods.
There is a need to increase job opportunities for women at higher positions and present them with better and flexible contracts. Currently, majority of top positions are dominated by men, while women are primarily engaged in part time work in the sector. (23)
Expected Development Outcome
Hospital based investment is likely to improve the access of common man to not only provide basic health units, but also care required for treating cardiac diseases and dialysis issues. 37 million families are enrolled under Health Card (2022), IOA will support GOP's health care programme. (22)
Gender & Marginalisation
Healthcare sector and specifically, the IOA have a dual impact on gender equality as it can contribute to generating improved job opportunities for women and promise them increased access to medical facilities.
Primary SDGs addressed
3.1.1 Maternal mortality ratio
3.2.1 Under‑5 mortality rate
In 2022, the maternal mortality rate is 140/100K down from 276 in 2006 (24)
In 2022 the infant mortality rate is 54/1000 births reduced from 62/1000 births (18)
The vision 2025 sets the target of reduction in the maternal mortality rate to 140/100k. (26)
The national vision 2025 sets the target of infant mortality to be reduced to 40/1000 birth (26)
1.a.2 Proportion of total government spending on essential services (education, health and social protection)
The proportion of total government spending on essential services was 17.5 percent and it increased marginally to 18.06 percent in 2019. (25)
The vision 2025 and national health policy considers it pertinent to increase the proportion of government spending on essential services like health but has not given any quantifiable targets.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Public sector
Outcome Risks
The major outcome risk is he challenge of having affordable healthcare of a hospital in a rural or a semiurban area in case the cost is not transferred to the patient. Furthermore, if the facilities do not charge affordable rates for services, especially in remote areas, the uptake of the model or services may be low.
Gender inequality and/or marginalization risk: The access to hospital by the women may not turn out as expected due to long distances.
Impact Risks
The waste generated from such business models needs to be treated efficiently, as improper waste treatment is a matter of national concern in Pakistan.
If healthcare facilities are not equipped with specialist care for women, these may pose a risk of gender exclusion.
Impact Classification
What
Development of hospital chains to provide affordable and accessible medical facilities, and quality healthcare delivery for all citizens.
Risk
If the facilities do not charge affordable rates for services, especially in remote areas, the uptake of the model or services may be low.
Contribution
The business model would contribute to the revenues of private hospitals which range from USD 35,000 to USD 355,000 (27) along with direct impact on GDP in the long run.
Impact Thesis
Provision of improved healthcare delivery through establishment of hospital chains at pan-country level.
Enabling Environment
Policy Environment
National Health Vision (2016-2025): It sets out eight pillars/ priorities that are common to all provinces. The vision also sets out a goal to reduce inequalities in the access to health services, establishing cross-sectional linkages for achieving SGDs and international commitments of WHO (11)
National Health Vision (2016-2025): One of the eight priorities is to increase health spending by three modes: government allocation, official development assistance and most importantly private sector investments. (11)
Punjab Health Sector Strategy: Focus on environment and hospital waste management+ PPP. one of ten point is to enhance healthcare financing and public private partnerships (29)
Health Policy KP: Among its five policy outcomes, one is to enhance health financing for efficient service delivery and financial risk protect of people. (30)
Financial Environment
In case of special economic zones: Exemption from income tax for ten years for Zone Developers, Co-developers and Zone Enterprises and One time exemption from all custom-duties and taxes on import of capital goods to Zone Developers, Co-developers and Zone Enterprises. (33)
Regulatory Environment
Regulations from Ministry of National Health: National and Provincial Hospital Waste Management Rules (Rule 3-25 on waste management, transportation and responsibilities of departments and management), Environmental Protection Act, Healthcare System Governance Regulations (31)
Regulations from Drug Regulatory Authority of Pakistan (2012), Pakistan Medical and Dental Council Ordinance (establishment, registration and running of hospitals and dental institutions and practitioners), 1962. Pharmacy Act, 1967. The Pakistan Nursing Council Act, 1973
Minimum Health Service Delivery Package for secondary and Primary Healthcare prescribes the standards/requirement from and for healthcare in terms of infrastructure, manpower, instruments, equipment, drugs, vaccinations and other supplies. (32)
Marketplace Participants
Private Sector
Evercare, Indus Hospitals, Shifa Hospital, Agha Khan Hospitals, Shaukat Khanam Memorial Hospital. International Finance Cooperation
Government
Ministry of Health and department of health, Drug Regulatory Authority of Pakistan (DRAP). Basic Health Units and Units at District and Tehsil Level
Multilaterals
International Finance Cooperation, Evercare Fund and World Health Organization.
Non-Profit
Pakistan Medical Association, Children Hospital Association of Pakistan and other humanitarian health networks and associations
Public-Private Partnership
Punjab Health Initiative Management Company (PHIMC), department of specialized healthcare, government of Punjab is entering into PPP arrangements for construction, operation and maintenance of general hospitals. (37)
Target Locations
Pakistan: Punjab
Pakistan: Sindh
Pakistan: Balochistan
Pakistan: Khyber Pakhtunkhwa
References
- (1) WHO (World Health Organization). 2023. “Health Service Delivery Pakistan.” https://www.emro.who.int/pak/programmes/servicedelivery.html#:~:text=Public%20sector&text=The%20national%20health%20infrastructure%20comprises,facilities%20is%20estimated%20at%20123394.Accessed 28 March 2023.
- (2) Raza, A. 2020. “6 Facts About Healthcare in Pakistan.” https://borgenproject.org/facts-about-healthcare-in-pakistan/.Accessed 28 March 2023.
- (3) UNDP (United Nations Development Programme). 2022. “Pakistan: Flood Damages and Economic Losses over USD 30 billion and Reconstruction Needs over USD 16 billion.” UNDP press releases. https://www.undp.org/pakistan/press-releases/pdna-pakistan-floods.Accessed 28 March 2023.
- (4) Finance Division. 2021. “Health as a Percentage of GDP.” Pakistan Economic Survey 2021-2022. https://www.finance.gov.pk/survey/chapters_21/11-Health.pdf.Accessed 28 March 2023.
- (5) World Economic Forum. 2022. “Access to Healthcare: Why We Need to Prioritize Women and Girls.” https://www.weforum.org/agenda/2022/05/access-to-healthcare-prioritize-woman-and-girls/.Accessed 28 March 2023.
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- (8) The World Bank. 2021. “Mortality Rate. Infant.” UN Inter-agency Group for Child Mortality Estimation. https://data.worldbank.org/indicator/SP.DYN.IMRT.IN?locations=PKAccessed 28 March 2023.
- (9) UNDP (United Nations Development Programme). 2021. “Sustainable Development Goals Framework For Sindh.” https://procurement-notices.undp.org/view_file.cfm?doc_id=277185#:~:text=As%20the%20first%20step%20towards,Decent%20Work%20and%20Economic%20Growth.Accessed 28 March 2023.
- (10) UNDP (United Nations Development Programme). 2022. “Pakistan: Flood Damages and Economic Losses over USD 30 billion and Reconstruction Needs over USD 16 billion.” UNDP press releases. https://www.undp.org/pakistan/press-releases/pdna-pakistan-floods.Accessed 28 March 2023.
- (11) WHO (World Health Organization). 2023. “Health Policy, Governance and Leadership Pakistan.” https://www.emro.who.int/pak/programmes/health-policy-governance-and-leadership.html.Accessed 28 March 2023.
- (12) Global Health Security Index. 2021. “2021 GHS Index Country Profile for Pakistan.” https://www.ghsindex.org/country/pakistan/.Accessed 28 March 2023.
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- (14) Khalid, F., and W. Raza. “Health Services Utilization and Out of Pocket (OOP) Expenditures in Public and Private facilities in Pakistan: an Empirical Analysis of the 2013-2014 OOP Health Expenditure Survey”.
- (15) The World Bank. 2019.“Out of pocket expenditure (% of health expenditure- Pakistan”. https://data.worldbank.org/indicator/SH.XPD.OOPC.CH.ZS.Accessed 28 March 2023
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- (18) (IFC) International Finance Cooperation. 2019. IFC invests $11 million in Shifa International to Bolster Healthcare in Pakistan. https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=16129.Accessed 28 March 2023.
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- (22) Sehat Sahulat Program. 2023. “About the Program.” https://www.pmhealthprogram.gov.pk/Accessed 28 March 2023.
- (23) WHO (World Health Organization). 2022. “The Gender Pay Gap in the Health and Care Sector a Global Analysis in the Time of COVID-19.” https://www.who.int/publications/i/item/9789240052895Accessed 28 March 2023.
- (24) The World Bank. 2017. “Maternal Mortality Ratio-Pakistan.” Trends in Maternal Mortality: 2000 to 2017. https://data.worldbank.org/indicator/SH.STA.MMRT?locations=PKAccessed 28 March 2023.
- (25) Federal SDGs Support Unit. 2022. Pakistan’s Voluntary National Review 2022. https://www.sdgpakistan.pk/uploads/pub/VNR_2022_Pakistan_Report.pdfAccessed 28 March 2023.
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- (32) Health Department Khyber Pakhtunkhwa. 2023. “Policies.” https://healthkp.gov.pk/downloads/view/7Accessed 28 March 2023.
- (33) BOI (Board of Investment). 2021. “Incentives in Special Economic Zones.” Special Economic Zones Incentive Package. https://invest.gov.pk/sez#gallery-1Accessed 28 March.