Healthcare players are setting up clinics and operating hospitals in Africa. But is the agenda only to tap medical tourism patients? : BY RITA DUTTA
1. African patients come mainly from Kenya, Nigeria, Ethiopia, Tanzania, Uganda, Sudan, Congo, Zambia and Zimbabwe.
Africa is an emerging market for healthcare with patients increasingly seeking multi specialty, affordable healthcare services delivered at international standards. African patients prefer India over Africa as the local private hospitals are expensive, while in cheaper public hospitals the facilities are inadequate and the waiting period is long. For instance, cancer patients have to wait as long as a year to get a cheap radiotherapy treatment at a public hospital. Africa is estimated to lose over $1 billion a year on medical tourism abroad, according to the World Bank in 2015.
More than 50% of foreign patients trudging to India are from the African region. These patients specially come from Kenya, Nigeria, Ethiopia, Tanzania, Uganda, Sudan, Congo, Zambia and Zimbabwe. The patients travel to India mainly for treatment related to oncology (BMT), cardiology, neuro sciences, urology, gynaecology, paediatrics and organ transplants (renal and liver). Being a large continent, with a population of almost 1.2 billion, there are many untapped pockets of business spread across various the countries of Africa.
Says Mahendran Renganathan, global group COO, Columbia Asia, “Africa is home to approximately 16% of world population with a momentum of growth driven by an increasingly strong middle class. The continent is among the world’s most rapidly growing economic regions. Key engines of growth are urbanisation, an expanding labour force, and the rise of the middle-class African consumer.” The Sub-Saharan Africa’s private healthcare industry is pegged at about $21 billion, and expected to double over the next decade. There is a vacuum in overall healthcare services all across sub-Sahara Africa with limited primary care centres and tertiary care hospitals. Several Asian healthcare groups are trying to bridge this gap by setting shops in Africa, be it clinics or running hospitals.
According to Mahendran, “It is time that quality healthcare services are locally available in Africa. Several healthcare groups are able to identify this need and see it as an opportunity for sustaining their growth.” Adds Dinesh Madhavan, director, Healthcare Services, Health Care Global Enterprises Limited, (HCG), “The reasons that Indian healthcare players are showing interest is due to the demand and supply gap and the experience of medical value travel patients to India. Add to the fact that a large amounts of these patients are cash-paying ones.” Experts point out that 50% of health expenditure in Sub Saharan Africa is financed by out-ofpocket payments.
According to analysts, several African countries want to showcase development in healthcare within their country and thereby have requirements for international players to set up shops or alliances. The regulatory norms in Africa have also been very supportive of outside players, improving its healthcare facilities. According to experts, capturing a slice of the African market was initially targeted through the governmental set-ups as well as facilitators. There was reluctance in setting shops in Africa. What started as a facilitatordriven market has slowly evolved into a market where Indian players set referral offices to effectively brand themselves or make clinical alliance to capitalise in the developing clinical segment. These when started yielding results, hospitals started looking at setting their clinical operations to encash better patient flow and to address the fast growing healthcare need within the country.
Many groups are looking at tapping Kenya as it is the economic, commercial and logistical hub for all of East Africa, with Nairobi as a major centre of growth and foreign investment. Nairobi, the capital city of Kenya, with more than 3 million people, is in the midst of a surge in foreign direct investment.
One of the early movers in capturing a slice of this market is Delhi’s Medanta The Medicity, which entered Kenya for pre and post op care on the ground and telemedicine. Medanta Africare commenced business in Nairobi in May 2004 and offers a day surgery centre with radiology (3T MRI, 256 Slice CT, X-ray, advanced ultrasound and Bone Dexa, mammogram), referral laboratory, dialysis, chemotherapy, endoscopy, dental, optical, physiotherapy, pharmacy, doctor consultations, heart clinic (CT Angio, ECHO, Holter, TMT, ECG) and gynaecology.
Says Anil K Maini, president and CEO, Medanta Africare Ltd, “What started as a diagnostic centre in Nairobi is now an ambulatory day surgery centre, offering diagnostics with a spread of 20 primary care clinics with labs, pharmacies and dental services in Kenya, Uganda and Tanzania.” It has recently started the Medanta Heart Clinic, wherein senior cardiologists from Medanta India are now based in Nairobi and operating a cath lab with a local hospital.
No of patients to India per year from Africa Max Healthcare: 3,600 Columbia Asia: 180 HCG: 600 Gleneagles Global Hospitals: 800 to 1,000 Manipal Hospital: 1,800
Columbia Asia, part of Seattle-based Columbia Pacific Management, has also started its first facility in Africa last year. Columbia Africa Healthcare Limited is a privately held, Nairobi based healthcare group that aims to deliver evidence-based medicine in an efficient, effective and caring environment to the people living in Africa. The centre is 100% owned by US-based fund, the International Columbia US LLC. The group invested approximately $2.5 million, including market research and feasibility studies, for the centre.
The facilities offered at the 5,300-square-foot multispecialty clinic and diagnostic centre are specialty clinics, provision for telemedicine and second opinion, dental services, procedure room for minor procedures, radiology facility with provisions for CT scan, USG and X-ray, non-invasive cardiology like ECG and TMT, laboratory facility and pharmacy.
“Kenya has an emerging economy with rapidly growing middle class. The need for quality, modern healthcare is increasing and the economic landscape of Kenya aligns with the growth plans of Columbia Asia. We have entered Kenya with plans to establish and expand in East Africa, similar to our growth in Asia,” says Renganathan. The Nairobi clinic also has a patient services centre to facilitate patients travelling for surgery at Columbia Asia hospitals in Asia. What is in the pipeline from Columbia Asia for Africa? “We are yet to establish pipeline plan yet, giving time to understand the market better and the healthcare demand through our clinic first. If this is successful, we will set up a typical Columbia Hospital in Nairobi and further expand to other parts of Africa,” adds Renganathan.
2. Medanta Africare commenced business at Nairobi in Kenya in May 2004.
Cancer player, HCG, started its operations in Africa in 2014 with managing a series of day care chemo centres, one in Tanzania and one in Kenya. Now it has announced entering into definitive agreements to acquire a majority stake in Cancer Care Kenya Limited (CCK), a leading cancer centre in Nairobi, Kenya. Dr BS Ajaikumar, chairman, HCG, says, “There are over 250,000 new cancer incidences each year in Eastern Africa – resulting in a huge and growing unmet need for advanced cancer care.” CDC, the development finance institution of the UK Government, which has partnered with HCG for Africa investments, through an investment in a HCG off-shore subsidiary that will make the acquisition, and MP Shah Hospital, a leading tertiary care hospital in Kenya, will also participate in the transaction. Dr N Adamali, the founder of CCK, will retain his shareholding in the company post acquisition and will continue his association.
Facts file : • More than 50% of foreign patients coming to India are from the African region. • An estimated 100,000 East African patients travel to India annually. • In 2015, more than 10,000 Kenyans travelled to India seeking medical care. • Africa is estimated to lose over $ 1billion a year on medical tourism abroad, according to World Bank statistics for 2015. • The Global Health Workforce Alliance said in its 2015 report that sub-Saharan Africa was facing a severe shortage of health care professionals and lacked adequate healthcare coverage. • Patients prefer India over Africa as private hospitals charge high rates, while in cheaper public hospitals, the facilities are inadequate and the waiting period is long. Cancer patients have to wait as long as a year to get a cheap radiotherapy appointment at a public hospital. • Africa experiences 24% of the global burden of disease, yet it has only 2% of the global supply of doctors and less than 1% of expenditures on global health. • Medicine prices in sub Saharan Africa is among the highest in the world. • 50 percent of health expenditure in Sub Saharan Africa is financed by out-of-pocket payments. • The Sub-Saharan Africa’s private healthcare industry is pegged at about $21 billion, and expected to double over the next decade.
setting up Vedic Lifecare, a day care and clinical setup back at Lagos in Nigeria. Established with clinical and management support from Manipal Hospitals, it is a first-of-its-kind medical facility in this region. The centre offers high-end diagnostic and day care service. Business wise, the centre is seeing a major opportunity and advantage that is utilised not just to enhance referral but also treat the post operative aspect of care for patients undergoing treatment at Manipal Hospital, Bengaluru. Chennai’s Dr Agarwal’s Eye Hospital has 14 facilities spread across 10 African countries, making it the fastest growing eye care chain in the continent.
Delhi’s Fortis Healthcare Limited manages three centres for CIEL Healthcare Limited (CHL), a Mauritian registered private limited company, at Nigeria, Uganda and Mauritius. Along with Ciel Healthcare, Fortis has bagged the O&M contract for Lagoon Hospitals, part of the Hygeia Group. And Hygeia Nigeria Limited has announced the acquisition of Gold Cross Hospital (GCH), a 35 bedded multi-disciplinary, tertiary care hospital located at Bourdillon Ikoyi, Lagos. The acquisition also includes Gold Cross MRI Diagnostics located in Ikeja, a fully operational diagnostic centre with MRI, CT Scan and other diagnostics facilities.
This move is in line with Lagoon Hospital’s ambitious growth strategy and will bring its clinical and management experience and expertise in the operations of Gold Cross Hospital. Lagoon Hospitals was the first hospital operator in sub-Saharan Africa to receive international accreditation from Joint Commission International and remains one of only two hospital groups in sub-Saharan Africa with this accreditation. The founder of Gold Cross Hospital, Dr Ladi Okuboyejo, said, “This recently concluded integration of Gold Cross Hospital Bourdillon in Ikoyi and MRI Centre in Ikeja with the Hygeia Group is set to transform Nigeria into a hub for medical tourism in West Africa.”
3. There is plan to develop Gold Cross Hospital as a multi-specialist centre
Lagoon Hospitals is planning to develop Gold Cross Hospital as a multi-specialist centre catering to secondary and tertiary care across various specialties not limited to maternal and child health, orthopaedics and trauma, general and minimal access surgery, emergency medicine and cardiac sciences. Senior clinicians from the Lagoon Hospital network will augment the existing medical resource pool.
“The acquisition is in line with our expansion strategy at Lagoon Hospitals. There is significant potential for growth and development of premium and quality healthcare services in Nigeria. By leveraging and integrating each other’s strengths, we are now ready to introduce super specialty as well as tertiary care medical programmes in the country,” says Rajeev Bhandari, CEO, Lagoon Hospitals.
4. HCG has announced entering into definitive agreements to acquire a majority stake in Cancer Care Kenya Limited.
Given the opportunity that Africa had in healthcare, and substantiated by the patient flow into India, investmentrelated funding is also easily available for hospitals to invest or form alliance in African healthcare sector. CDC has partnered with HCG for Africa investments, and IFC (a member of the World Bank Group), along with IFHAII Cooperatief (a private equity fund focused on investing in the healthcare sector in Sub-Saharan Africa), Swiss Re (the reinsurance company) and CIEL Healthcare Africa Limited has announced an investment of $66.8 million in Hygeia Nigeria Limited in recent times.
5. Vedic Lifecare run by Manipal Health is a day care and clinical centre.
Do these healthcare centres in Africa by outsiders have to be in association with a local partner? Not necessarily, but the most ideal way of entering and sustaining business in Africa is with a local partner, opine experts. This not only helps Indian healthcare players understand the volatile political and sectorial challenges but also helps in overcoming the operational bottlenecks easily. Local partner plays a vital role in streamlining the business operations and ensures a seamless compliance for local regulations, considering the high volatility in these markets.
6. Columbia Africa Healthcare Limited is a privately held, Nairobi based healthcare group.
What are the challenges to setting up centres and hospitals in Africa? “There are regulatory challenges, as well as poor infrastructure, doctors license and lack of expertise in both clinical and non clinical areas. Most medical equipments are about 40% – 60% costlier than India,” says Dinesh of HCG. Medicine prices in sub Saharan Africa is among the highest in the world. The other deterrents are the time taken to execute a project is longer and the fluctuation in the economy and risk of devaluation against the USD, as most purchases and the repayment burden are in the USD.
Are these facilities being set up only to attract medical tourism patients? According to Anas A Wajid, headinternational business, Max Healthcare, “Most Indian companies are wary of investing in Africa because of the prevailing political and economic situation in various African countries. Most Indian hospitals run O&Ms in Africa, where in the investment is done by someone local. The MVT also gets a flip from having a locally run hospital and that is usually a significant opportunity. So, MVT is definitely at the back of the mind of an Indian hospital, when it commences local operations in Africa.” However, Dinesh of HCG begs to differ: “The primary intent to opening a centre in another country is not to refer patients back to India but to provide access to quality care and make the country self reliant. For a comprehensive cancer centre, what it cannot manage will be referred to an advanced centre. However, that is the secondary objective and not the primary one.”
7. Columbia Africa has a patient services centre to facilitate patients travelling for surgery at Columbia Asia hospitals in Asia.
nics helped groups get a steady inflow of international patients back home? For instance, has Columbia Africa helped divert patients to hospitals in others locations of Columbia Asia? “Yes, but only to a certain extent. Since its start, we had about four to five conversions into procedures at our hospitals in Bengaluru. Nevertheless, newer challenges like tightening of medical visa requirement in Kenya in relation to sending out patients to India are cropping up,” says Renganathan. According to experts, in the coming years, more players might delve into delivering secondary and territory care level. Also hospitals that are able to successfully demonstrate the business model will start looking for multiple chains across African countries. Technology driven initiatives like tele reporting and tele consulting is another opportunity that will set in.
Anil K Maini