Why High-end hospitals are setting up shop closer to the populations

By Monica MUEMA & Agencies

A growing number of high-end hospitals are setting up shops closer to the populations as they seek a larger share of the growing healthcare spending from the growing middle class.

For years, high-end hospitals waited for patients to walk into their state-of-the-art facilities for medical services.

For most Kenyans, seeking healthcare is as simple as walking into a hospital, paying consultation fee, chatting briefly with a doctor who then comes up with a diagnosis and prescribes a treatment plan.

Medical facilities like the Radiant Group of Hospitals (RGHs) have over the years perfected the art of ‘community healthcare’ in what has seen it capture the niche and given it a competitive edge over the high-end facilities.

The family-owned hospital runs seven branches – Pangani, Kasarani Sportsview, Kasarani Seasons, Umoja, Kiambu, Valley Road and Daystar University in Athi River with 200 permanent staff, 135 temporary staff and 50 visiting doctors, with 372 beds and 10 theatres.

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Aga Khan University Hospital becomes the latest to step up its expansion drive into Nairobi estates joining a growing trend where top private hospitals are moving closer to the population to defend their turf against newcomers backed by banks and private equity funding.

Aga Khan opened a specialty care Centre in Roysambu offering dialysis, chemotherapy, endoscopy, and general surgery at an affordable charge, making it the latest addition to the 50 medical centers spread across the East African region.

“The facility will be supported by the renowned Aga Khan Hospital specialists who will be coming from the main hospital to take care of the patients hence delivering the same quality of care you would receive in the main hospital at a subsidized cost,” Aga Khan University Hospital Chief Operating Officer Khurram Jamal said.

This comes at a time when private equity firms are splashing billions into hospitals to get a share of the growing healthcare and pharmaceutical industry, fuelling the aggressive expansion of middle-level hospitals like Penda, Equity Afia, Goodlife and Miliki Afya.

The trend has been supported by similar moves by retail chains that have been moving closer to shoppers, driven by mushrooming malls near suburbs and populous estates.

The small units are filling the gap of a few ill-equipped county and state medical facilities to serve huge sections of the country’s urban population.

Aga Khan sees the opportunity to tap into this price-sensitive market with its recognizable brand and high-quality care at affordable rates due to lower costs like lease space and shared faculty of doctors.

“The services have been priced comparable to what would be offered in the area here meaning that they price friendly to the people in this area,” added Dr Abdalla Abdulkarim, the Chair of Surgery at the Hospital.

Healthcare is attracting investors who are being drawn by the industry’s growing demand for quality service at an affordable cost.

This has attracted a lot of private equity investments from funds like Leapfrog, Capital ventures, Abraaj Group, International Finance Corporation (IFC), and banks like Equity which set up Equity Group Foundation’s (EGF) health in 2015.

Last month, President William Ruto officially launched the Sh3.5 billion AAR Hospital on Kiambu Road, giving a boost to the hospital whose market share has grown due to its small outlets in major satellite towns around Nairobi.

 

Part of this article was first published by Business Daily