In Nigeria, a Hospital Group Attracts Global Partnerships

The Lagoon Hospitals group has figured out how to bring both international investment and ex-pat Nigerian doctors into its fold.

The Nigeria-based Lagoon Hospitals group has figured out how to attract international healthcare investment and keep talented doctors in Africa.
Lagoon Hospitals was the first sub-Saharan African hospital group to receive Joint Commission International accreditation, meeting the same standards for quality and safety as top-of-the-line hospitals in North America and Europe. Photo from Hotels.ng

 

What does it take to become an effective healthcare facility in Africa, where much of the continent is marked by extraordinary needs and limited resources? In a series of profiles, GHCi’s Alex Freedman looks at operations and management strategies at three standout Africa hospitals, in Kenya, Nigeria and Ghana. This profile is the second in the series.

 

The task of bringing quality healthcare to many places like Nigeria is almost unimaginable. In this West African country, the per capita government healthcare expenditure in 2014 was just US$118 — that’s little more than one tenth of the global average of US$1,060, and not even 1.3 percent of the U.S. per capita expenditure of US$9,403. Only 7.4 percent of Nigeria’s annual government expenditures go towards healthcare, which is about half the global average. And while federal government employees receive health insurance coverage through the country's National Health Insurance Scheme, an agency of the Federal Ministry of Health, the vast majority of Nigerian citizens — 98.8 percent according to a 2012 survey —  pay for services out-of-pocket because they have no insurance coverage at all.

While Nigeria’s public hospitals are not-for-profit and usually less expensive than private hospitals, they have long had a reputation for poor quality. As a result, many citizens go to the country’s better-financed private hospitals for their care. Many of these facilities have been designed to offer specialty care, but they end up offering primary services, too, because of demand.

The highest-profile private hospitals in the country are those in the Lagoon Hospitals Group. The first Lagoon Hospital opened its doors in the Nigerian port city of Apapa in 1986, and it remains the largest and most comprehensive of the health care facilities in the network, which includes two other hospitals and two outpatient clinics across Nigeria. Lagoon is owned and managed by Hygeia Group, a Lagos-based provider of private HMOs in Nigeria.  

Rajeev Bhandari, CEO of Lagoon, says that the infusion of private healthcare services are a good sign for Nigerian healthcare across the board. “Private sector is what typically is critical when healthcare has to get to the next level,” he says. “When you have significant investment coming in, that‘s when it gets more competitive. That’s when healthcare gets better and more services become available.”

Lagoon Hospitals grew a reputation for state-of-the-art care by offering modern surgeries and techniques that were still years away for most other hospitals in Nigeria. It performed the first metallic replacement of an entire arm bone and joints in Africa in 2013, and the first open heart surgery in a private Nigerian hospital in 2014 — with a team of nearly all local surgeons and staff. Lagoon’s Lagos branch became the first hospital in the country to implement an electronic medical records (EMR) system in 2013, and since then EMR systems have been rolled out to all of Lagoon’s sites.

Bhandari says the organization’s focus today is on recruitment of top-quality specialists to increase the network’s tertiary care services, which include neurology, neurosurgery, cardiac sciences, orthopedics and renal programs. “These services typically don’t exist here, because doctors who have those skills are practicing outside of the country,” he says. He notes that there was an exodus of professionals from Nigeria in the 1980s and 1990s, when many doctors left for opportunities in Europe and North America.

But the hospital group has had some success in recruiting dispersed Nigerian doctors. “I’m one of them,” laughs chief medical director Dr. Olujimi Coker, who also serves as the hospital’s chief of surgery and is a specialist in laparoscopic colorectal and abdominal surgeries. He has been on staff for nearly a decade after training, working and teaching in the U.K. until he and five colleagues with similar backgrounds were convinced by the Hygeia Group to return to Nigeria. Some of the staff keep one foot in Nigeria and the other in western hospitals: Dr. Segun Adubu, for instance, is a consulting orthopedic surgeon who spends 10 days a month at Lagoon and the rest of his time in the U.K.

In 2011, Lagoon Hospitals became the first sub-Saharan African hospital group to receive Joint Commission International accreditation, meaning that the organization meets the same standards for quality and safety as top-of-the-line hospitals in North America and Europe. Coker says the accreditation was a monumental victory for healthcare in Nigeria. “Many experts said it was perhaps not achievable, due to the circumstances and challenges here,” he says. The hospital group’s commitment to high standards has stayed strong: In 2016, the group was re-accredited by the JCI and was given, again as a group, the Best International Hospital Award in Nigeria by the International Healthcare Commission.  

Lagoon’s quest for quality comes at a time when the volume of healthcare needs is on the rise across Africa — as is, in some places, the quality of care. Dr. Amit Thakker, chairman of Africa Health Business, a strategic consulting and development platform for African private healthcare providers, says that a growing middle-class willing to pay for better care is fueling the changes. “As the economy keeps increasing, the people will be looking for quality healthcare,” he says, making the role of private sector care more important. Thakker says he expects to see more public-private partnerships, calling them “a non-negotiable, irreducible minimum for better healthcare.”

The imperative is there for health and healthcare in Africa to make some strides forward through international governmental organization and philanthropic investments, says Thakker, citing as an example the 2016 US$24 billion joint commitment to Africa health advancement from the World Bank and the Global Fund to Fight AIDS, TB and Malaria through 2021. African governments are chipping in more as well. “Healthcare may be the most important card for political parties to get elected and stay in office,” he says. But he adds these sorts of governmental and philanthropic investments won’t be able to fully deliver on the promise of better health without the help of the private sector.  

Lagoon has been the recipient of significant outside investment from global players. In 2016, the International Finance Corporation (IFC) — the private sector investment branch of the World Bank — joined with the sub-Saharan Africa-focused equity fund IFHA-II Coöperatief, the reinsurance provider Swiss Re, and the healthcare company Ciel Healthcare Africa Limited in investing US$66.8 million to expand Hygeia’s hospital network further across Nigeria. This follows a 2009 investment of US$25 million by the IFC, the investment firm Satya Capital, and the Netherlands Development Finance Company (FMO). A statement issued at the time of the 2016 announcement said that the IFC consortium was focused on providing new technical expertise to Lagoon Hospitals with help from the Mauritius-based management company Ciel Healthcare Africa and India’s hospital group Fortis Healthcare. Clearly, international organizations have taken notice of the potential represented in Lagoon Hospitals’ success.  

Hygeia is using the investment money in part for acquisitions, and in March 2017, it bought Gold Cross Hospital, in Lagos. Reports say that the plan is to bring Lagoon's management expertise to the facility, which includes state-of-the-art MRI and CT-scan diagnostic equipment. Gold Cross will become a multi-specialist center, including maternal and child health, orthopedics and trauma, general and minimal access surgery, emergency medicine, and cardiac sciences.

Expansion is helping Lagoon to lower its treatment costs significantly, says CEO Bhandari. “It’s all based on volumes,” he explains. Consumable goods are costly in under-resourced areas of Africa, but increasing the volume of procedures gives the hospital some negotiation leverage with its suppliers. “The moment I start doing complex surgeries on a regular basis, it makes the costs for drugs, consumables and implants cheaper,” adds Bhandari. Take interventional cardiology, for example. The number of angioplasties that the hospital group conducts and the expensive stints needed for them currently averages about five a month. “When we get that up to four or five hundred a month, that will really drop the costs,” he says. That will be good news not just to the hospital’s bottom line, but also to all the Nigerians who pay out of pocket for their healthcare needs.

 

— Alex Freedman

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