Pakistan’s Health Care Industry
According to The Economist, health insurance is slowly increasing in Pakistan. The government is making an effort to cover people who fall below the country’s poverty level while corporations and business are starting to offer their employees private health coverage. That means that more people have the ability to seek help from private hospitals, and growth is taking place within the medical care industry.
One of the OnFrontiers experts, Mr. Danish Rana, currently manages internal audits and finances at Surgimed Hospital in Lahore, Pakistan. During his time there, he has overseen audits, tracked expenditures, and solved numerous accounting issues within the hospital. Danish took some time to speak with us regarding the healthcare market in Pakistan and what it takes to makes a hospital successful there.
Currently, both private and state-run hospitals exist within the country. Like most state-run hospitals, Pakistan’s are subsidized by the government, and those who have no insurance and little money are forced to turn to these entities for medical help. That means that these hospitals suffer from a shortage of beds, staff, and supplies. Those who have private insurance and/or money, though, turn to the private hospitals for their care.
Thus far, private insurance is relatively new in Pakistan and is really only offered within the corporate world to employees. Private people are still unable to obtain health insurance and must pay the expenses for any services they receive out of their own pockets. Because the individuals pay for their care, they expect both quality care and facilities, and the little amenities within the hospital are important. If the private “hospital” is the equivalent of a dispensary, the people will actually choose the state-run hospital over the small, private one because it has more to offer.
Given the choice between a large, private hospital and a state-run hospital, though, the people will choose the private one every time. The reason is that the private hospitals have private rooms, adequate staff, quality consultants, and up-to-date facilities. Having all the services under one roof is not only a matter of convenience but also a sign of quality. When the people of Pakistan are considering where to go, one of the items they consider is how many departments the hospital has. Lastly, having some “pomp and show,” as Danish puts it, can never hurt. Just like the rest of the world, Pakistanis respond well to attractive surroundings.
For foreign companies that are considering investing in Pakistan or opening a hospital, getting educated on the tax laws and regulations should be one of the first things they do. Fortunately, most of the laws and regulations are posted online by the regulating authorities and can be downloaded or printed off. The difficulty may come in understanding the information. This is the sort of situation where having locals as partners or employees would be to the benefit of the company. The locals should be employed to oversee things that pertain to Pakistani tax laws and regulations for they can easily navigate the laws and regulations and ensure that the hospital or medical company is in compliance with all aspects of the law.
Another area that foreign companies need to prepare themselves for is the cultural differences of doing business in Pakistan. Danish likens the business culture of Pakistan to that of India. He points out that although the people can seem rather rude or hasty, they are, in reality, extremely helpful and desire to be helpful. Learning how to successfully navigate these cultural waters is what causes some companies to succeed while others fail. Joining forces with local business people and hiring locals for key positions within the hospital will help outside investors better succeed within Pakistan. Danish recommends considering hiring locals for help in marketing and running specific operations within the hospital.
Once the research has been completed, investors can move forward and set up a new hospital or medical group. Since hospitals are capital-intensive businesses and require large costs up front to succeed, finding ways to ensure a return on the investment becomes highly important. For a faster return on investments, the key is to have a large number of beds and all departments or services under one roof. If this can be accomplished, the hospital can draw customers from a larger client pool and thereby recoup its investment much more quickly. Employing well-known consultants will also attract clients to the hospital or treatment center. Since most of the people who use the private hospitals in Pakistan either have insurance or are paying for treatments out-of-pocket, they are willing to pay more for the extra comforts of air-conditioning, big televisions, and private rooms.
Another way to “increase profit,” is by decreasing internal accounting problems. Having accounting software that accurately tracks inventory, requires user sign-ins, and easily creates reports is just as critical as good consultants and the number of beds. Minimizing pilfering and supply errors can save as much money as not hiring extra personnel. If finding enterprise resource planning (ERP) software that meets the hospital’s needs is difficult, finding a vendor for software that has the ability to adapt the code in its existing software is the next best thing. Danish has found that by handing his vendor a list of necessary changes, the vendor has made the software accomplish everything he needs. Having an ongoing service contract with the vendor ensures that any additional changes can be easily made in the future, and the cost of the contract is made up through the money saved in accurate accounting.
As with any business, having audits performed regularly helps insure against both genuine mistakes and intentional thievery. To aid the foreign hospital through the process, employing local staff in key positions that will interact with external auditors is recommended. Danish shares that in his opinion, the Pakistani people prefer to have foreign investors and hospitals coming in and setting up large, well-run establishments.
Through the use of wise accounting practices, local employees, smart marketing, and excellent doctors, new private hospitals can be successfully opened within Pakistan to serve the growing needs of the people. Like most people, all they desire is quality service. The healthcare market is wide-open in Pakistan for those who desire to step in and fill the opening.
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Featured image was taken by Waqas Mustafeez in Lahore, Punjab, Pakistan.
Originally published at OnFrontiers Blog.
