A R Mohan.pdf - International Hospital Federation

PPP Model in the Healthcare
Industry
SGH Group's Experience
Presented by
A R Mohan
Saudi German Hospitals Group

SGH Group takes this opportunity
to thank
Organizers
for bringing this event to the Middle East and
giving us an opportunity to be associated with it

Conference Theme
“Healthcare in a changing world:
Overcoming the challenges”
PPP is a central element in this theme

Overview
Current Scenario of Healthcare Industry
PPP as a form of sustainable Business Model
PPP- SGH Yemen and SGH Hail Experience

Current Scenario of Healthcare
Fragmented industry
High entry barrier
Long lead times
Few corporate players
Industry
Reluctance of institutional funds to finance
Healthcare
Weak scientific management (in relation to
other industries)

Current Scenario of Healthcare
Industry…contd.
Low level of automation- poor integration.
Lack of research.
Clinical research
Policy research
Process research
Market research………etc.

Current Scenario of Healthcare
Industry
In the past, Healthcare was solely under the
Government Sector
Government Hospitals are inadequate to
meet the needs
More recently Governments in Arab world
encourage increasing private sector role.
Emergence of professionally managed Private
Hospitals.

Current Scenario of Healthcare
Rising healthcare costs
Obligatory Medical Insurance
Industry
Strategic development of healthcare hubs
Shortage of healthcare professionals
Increase in life styles diseases e.g. obesity,
diabetes, heart diseases, back pain…..etc.

Healthcare Projects
240% Increase in Treatment Demand in
GCC by 2025
Healthcare provision in GCC will be about
US$60 Billion, 5 Folds from today
(Source: McKinsey)
PPP Model in Healthcare also can do wonders in rich
and poor nations alike

Healthcare
No stakeholder is happy
with the situation or outlook.
There are no perfect models

Healthcare
Capital intensive
Labour intensive
Materials Intensive

Challenges are enormous
Public sector has limitations
Private sector can not do it alone
PPP is part of the solution to provide
the thrust and direction that the
industry requires

PPP can provide Sustainable
Business Model
The PPP can be a sustainable business model in –
Healthcare
Health education
Health research.

PPP Relationship must be
Organic
Based on Shared Vision, Values, Goals and
Strategy
Driven by long term goals
Synergy among the partners

PPP Relationship must be
Respective strengths of partners to
complement and supplement each other
Win-Win for all stakeholders
Economically sustainable
Fully leveraging the strengths of the
partners

PPP Relationship should go
Collaboration on specific projects
Private sector role as a mere provider of
service
beyond
Segmental focus, poor interface and
integration- partnership on non core areas
(clinical care the responsibility of the public
sector and support services the role of
private sector)

Private Sector Strengths
Domain knowledge
Market knowledge
Business acumen
Result orientation
Agile Management
Customer focus
Brand

PPP success factors
Private Sector partner with high level of
corporate governance
Clear and effective governance structure of
the PPP entity
Provide Exit strategy options

SGH Group’s experience of PPP
Many governments / agencies from the region
approached us to start hospitals
-As partners
-Manage their ailing hospitals
-Promote Healthcare Industry with the
support of local and international investors.

PPP- SGH Yemen success story
SGH Yemen Project ( 300 beds) A world class
General Hospital is classical example of Public
Private Partnership in Healthcare Industry of Arab
World.

Cont…PPP- SGH Yemen success
story
SGH-Yemen

Cont…PPP- SGH Yemen success
story
35% stake of the Yemen Government through its
various agencies
Yemenia Airways: 15%
Ministry of Interior-Pension Fund-Yemen 10%
The General Authority Social Security-Yemen: 10%
(SGH Group has 54% and Global
Investment House has 11% stakes)

Cont…PPP- SGH Yemen success
story

Cont…PPP- SGH Yemen success
story
SGH Yemen, setting standards- first JCI
accredited hospital in Yemen.
We never thought that SGH-Yemen will do
better than some of our hospitals in KSA.

SGH Hail an unique business
With the support of Saudi Government, and Hail
governorate, SGH Group is creating a Role Model
Hospital for small and remote regions of KSA
With this successful model SGH Group will reach
different untouched and remote ( by Private Sector)
areas of KSA and other countries subsequently
model
We have more than 50 local Partners in addition to the
Hail development authority, and the institutions like
Prince Sultan Foundation, Islamic Development Bank etc

Cont..SGH Hail an unique
business model
PPP initiatives materialized from SGH Group’s Vision
and Commitment to contribute positively to the
Community.

Cont..SGH Hail an unique
business model
HE Crown Prince Sultan
and HRH the Governor
of Hail Region-
Supports of SGH Hail-
150 Beds Hospital.

Cont..SGH Hail an unique
business model
SGH Hail 150 beds Hospital-
Construction work fast progressing

Other Governments support to
SGH Group

SGH-Dubai

SGH-Dubai

Final thoughts
ommon platforms for public private interaction
ovide incentives to the private sector
reate PPP role models
vestor friendly environment
ficient legal framework
tablish a committee at the city, country, and
gion level for Private and Public Sector
logue and interaction.

SGH Group Endeavor:
To play a responsible role
in shaping the Healthcare Industry in the
region
Thank You