High-end hospitals shift fight for patients to estates

Nairobi’s Aga Khan University Hospital

Aga Khan University Hospital in Nairobi. FILE PHOTO | NMG

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

But more and more high-end hospitals are setting up shop closer to the populations as they seek a larger share of the growing healthcare spend from the growing middle class.

Aga Khan University Hospital is 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 speciality care Centre in Roysambu offering dialysis, chemotherapy, endoscopy and general surgery at an affordable charge, making it the latest addition to the 50 medical centres 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.

AAR Hospital's 140-bed facility was funded by partners including the World Bank Group, International Finance Corporation, International Fund for Health in Africa and Swedfund.

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