Monday, 23 March 2015

5 Important Factors to Consider Before You Open a Hospital In a Suburban Area (Part 2)



In this post, we will consider the 3 remaining factors in opening a hospital in a suburban area.

  • Scope and Quality of Services
The scope of services spells out what you plan to do and what you plan not to do. It defines the services that will be offered to clients. It covers the range of competencies or skills you intend to put on display. To be successful, you should define the scope of service you are going to offer.

In defining your scope, ask yourself these questions; what skills do I have or intend to provide to the community? What services are already available in the community? Do I plan to improve on existing services, innovate or create something entirely different? What do the people really need? How will I differentiate my business from others already in existence?

Honest answers to these questions will help you define your scope. You will also be able to differentiate your services which will give you a comparative advantage over existing competitors. This makes your hospital distinct and attracts clients to try out your service for the first time.

When they do come, it is important to make a positive first impression to keep them coming back. This is where quality comes in to play.  Quality is the ability to provide service of the highest and finest standard at all times. 

Cost of Services
Many developing countries lack social security safety nets like health insurance; especially among the millions in the informal sector living in suburban areas. The cost of your services is therefore a decisive factor in determining patient turn out. Too low prices may be unprofitable. Too high prices may also be prohibitive and limit the patient inflow. Prices must therefore be set at an affordable rate for the majority of people. Though prices can be used to differentiate your services, it is wiser to remember that a suburban area has many residents who may not afford high prices.

The good news is many government workers also live in suburban areas and commute to the city daily. The uptake of health insurance among this group of residents is probably over 95%. In addition, there is a renewed drive by the government of developing nations to increase the uptake of health insurance among those in the informal sector. It will therefore be necessary for you to get your hospital registered with the National Health Insurance Scheme in your country. This gives you a steady flow of monthly income (called capitation) irrespective of patient turn out. What you need to do is to ensure as many patients as possible choose your hospital as their healthcare provider.

In addition, there are a few private sector individuals living in suburban areas who can afford their health bills. The bad news is many of them will rather go to bigger cities for health care because they erroneously believe that bigger cities have better doctors and better facilities. 

I recall an incidence I had while in Medical School. My Mum had a gynecological condition that required her to undergo an Examination under Anesthesia (EUA). I discussed with a friendly Gynecologist who had over 25 years experience behind him. But her elder sister (my aunt) would have none of it. Though, my school was located in a big city, her elder sister was a Chief Nursing Officer in a bigger city and felt her hospital could provide a better service. She requested that my Mum be taken to Lagos for an EUA!! Finally, I had my way and the helpful Consultant performed the procedure. I have seen this same scenario play out over and over again. Some patients always feel that because a city is bigger, it will have better health facilities than a suburban area. Though, there may be some truth in this belief, it is not always the case.

The question facing you is how to offer services at a cost that such people can appreciate and yet others can afford. You shouldn't be too cheap else they will think you are not giving them the best. In my opinion, this may be resolved in 3 ways.

a.  .   Define your target market and stick to it. Who would you rather cater to? The few private individuals or the many government workers and informal artisans?

b..    Do a market survey when developing your business plan. This will give you an idea of what your target patients will pay for particular services. Then look at the cost of providing that service. After which you can fix a price that may be acceptable to the majority of residents.

c.  .   Hire an advertising agency to help you brand your hospital. Create a brand for your hospital. Be known for something; Starbucks is known for good coffee, Google is known for search engines, Coca-cola is known for quality soft drinks. What will you be known for? Don’t forget that there is a chance that clients outside the suburban area may also access your services if you have a good brand.

Skill set
Finally, ask yourself the following questions. What skills do you possess? Can you provide the services you are promising to offer? Are you going to employ someone with the skills you intend to use? Though, you certainly cannot provide all the skills you need to function, but it is wise that you have training and certification in the core services of your business. This is because human beings are unreliable and the labor turnover rate in small scale hospitals in suburban Africa is quite high. You should therefore train to be a ready back up if for example, the Sonologist goes AWOL for two weeks.

Establishing a hospital in a suburban area can be a risky venture but the dividend is worth the risk. It is a venture worth getting into.


Best of Luck!!

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