This is an interview with Carlos Malet, Co-Founder & CFO of Sphera, published by Healthcare Business International in April 25th
Spanish operator Sphera Global Healthcare is expanding in Africa. Carlos Malet, co-founder and CFO, spoke to Healthcare Nova at HBI 2018 about the market for PPPs delivering efficient medical services in Africa.
Malet explains the group is currently focused on Rwanda, Gabon, and Angola, where the operator has won contracts to manage public hospitals and outpatient services. The group also has plans to expand to Mali, Morocco, Madagascar, and Senegal.
“Many of these countries are experiencing great difficulty in healthcare due to infrastructure problems, lack of financing, lack of HR resources, and there are not enough doctors,” Malet says.
He adds he is confident that Sphera can achieve a double-digit profit margin in the countries it operates in, which is one incentive for going into these regions despite the high cost of financing projects.
Sphera co-created Oshen Healthcare – an Angola-headquartered management company that is investing in healthcare assets in Africa. In 2017, Oshen Healthcare reached an agreement with the Rwandan government to take over the management of King Faisal hospital – the largest acute care provider in the country.
As part of the contract, Oshen Healthcare will manage and invest 18.1bn Rwandan Francs (US$21m) in the next five years to upgrade the existing hospital infrastructure. Within a year, King Faisal hospital has turned profitable. Revenue at the 190-bed hospital (operating at 160-bed capacity) was €12m in 2017.
The hospital caters to both private and public patients, with the former accounting for 60% of total income, and the private payor is equally split between out-of-pocket and PMI. About 35% of the revenue is publicly funded while the remaining 5% is from medical tourism.
“King Faisal aspires to receive more referred patients than any other hospital in East Africa. It receives private patients from the Democratic Republic of Congo, Burundi, and Uganda. It wants to become the medical tourist destination in Africa,” claims Malet.
“There is a plan to increase the capacity to 200 beds, we are opening a brand-new day-hospital. It’s happening as we speak, it should be finished by 2021,” says Malet.
During the five-year plan, Oshen Healthcare plans to bring in new sub-specialties, adding cardiology, gynecology, IVF, paediatric surgery and oncology to the services in the hospital. King Faisal hospital will also form international partnerships with overseas healthcare.
“Cardiac surgery is not offered today in Rwanda,” Malet says, highlighting the lack of human resources in the country, and the need to reinforce and invest in acute care provision. There are over 400 screened patients diagnosed with cardiac diseases awaiting surgery.
Despite a lack of specialists in Rwanda, Malet believes the country is a progressive nation that demonstrates an ongoing potential for further healthcare development.
Rwandan president Paul Kagame told the Africa Business and Investment forum in January: “Inadequate medical care costs companies and the public sector a lot of money and productivity through illness and disability. The private sector is part of the solution – apart from the IFC, a few years ago, found the majority of health services consumed in Africa are already supplied privately. This doesn’t necessarily mean we should privatise our healthcare systems, but rather find ways to improve quality and success. In Rwanda, for example, we have entered into a public-private arrangement with a Spanish run firm to manage our largest hospital and what is being done there is already showing a good success.”
In Gabon, Sphera has also won a PPP contract to run the 176-bed Jeanne Ebori hospital in the capital city of Libreville with operation set to begin in May. It may also take over five hospitals built by Austrian group Vamed which apparently has a payment dispute with the government.
Gabon in western central Africa is implementing a universal healthcare coverage scheme with co-payments set at 10% of total treatment costs.
In Angola, Oshen Health has operated an outpatient clinic Centro Medico International in Luanda since 2014. The company is also developing a greenfield, 60-bed hospital which specialised in obstetrics. The project is expected to complete by 2020.