It is exactly four years now since this column ran a story on a young duo venturing into the healthcare entrepreneurial scene in the heart of Eastlands in 2012.
On a recent follow up on their progress, I noted remarkable achievements that offer a case study for local business schools and investors with an inclination to healthcare investments.
Their startup Ladnan Hospital now boasts of being the only facility in the Eastlands offering dialysis, intensive care unit, minimal invasive laparoscopic surgery and chemotherapy for cancer patients. This is encouraging given the location — an area previously shunned by hospital operators.
As has been the aim of this column, their story strengthens the belief that young doctors and the private sector hold the answers to the problems bedevilling our health system.
This idea is held because young doctors are more enterprising and also willing to venture where their senior consultants would not.
The high costs charged in private hospitals are partly due to low number of providers offering specialised care.
This demand-supply mismatch means a system inefficiency that allows oligopolies to thrive. With more players innovation and cost reduction usually happens since competition increases.
By way of example, cancer care, ICU, dialysis and laparoscopic surgeries that were off-limits to Eastlands residents seeking an alternative to public health facilities are now within their reach. The costs charged being twice as low as those charged in top tier facilities which previously locked out many ordinary Kenyans.
Ladnan Hospital co-founder and managing director Abdi Mohammed says efficient business models are part of the reasons they have been able to achieve such low costs to their clients.
One factor contributing to high costs is the almost cartel like regulation of the supply of specialists in some private hospitals. This model means patient access is bottlenecked.
The Ladnan Hospital case seeks to overcome this by offering an alternative approach.
“As long as a doctor is qualified and competent, then the hospital should allow them to work. The role hospitals should play is making available the equipment and resources needed,” he says.
This way private hospitals move from possessing patients to just being facilitators of doctors and patients seeking quality healthcare.
In contrast to established facilities, startups are likely to try out new ideas or products that seek to benefit clients. In their case he hopes that a deeper collaboration with the National Health Insurance Fund would see more private sector players rope in patients with conditions like kidney disease and cancer from more expensive facilities.
All has not been rosy though, like other startups, he says, they have had a few hiccups and obstacles on the road. Attaining adequate capital being one of them since healthcare is a heavily capital intensive undertaking. As one starts offering more specialised care the capital demands rise.
The other challenges are getting personnel with patient understanding and business mind-sets, but they have been lucky to have a young team nimble enough to learn as they grow.
Dr Mohammed believes that with a little bit more investment the local health sector can go far.
“There is absolutely no reason why Kenyans should go to India for specialised care. With funding Kenyan doctors should be able to do most of that. Competency is gained through exposure as our case will prove,” he adds.
The hospital’s impressive revenue growth over the four years is vindication for those of us advocating more investments in healthcare.
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