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Egypt: Health sector looks for private help
Published in Daily News Egypt on 23 - 02 - 2013

A combination of new public investment and increased private participation are expected across Egypt's expanding healthcare sector as the country prepares to meet rising demand for a broader range of services driven by its growing population.
Egypt has one of the largest healthcare markets in the Middle East and North Africa (MENA) region. However, while advances have been made in basic public health, further expansion will require greater investment from both the state and private industry, if the country is to address challenges weighing on the sector, such as ageing infrastructure and inefficiencies.
Egypt's health minister, Mohamed Mostafa Hamed, announced in January that Egypt planned to build or refurbish some 70 hospitals during 2013 and 2014 as part of a drive to overhaul the sector. In an interview with the local press, the minister acknowledged that 200 of the country's hospitals and 3,800 of its clinics required total renovation if they were to provide adequate standards of care. Other challenges facing the sector included a shortage of doctors in regions such as Sohag, Assiut and Qena, alongside inefficient allocation of resources, he added.
Under-investment in Egypt's health service has become a bone of contention for those working in the field. A decision by the government to award 4.8% of the national budget to the sector led to a protest strike in October by doctors who said the allocation was below the international average and called for it to be increased to 15%. Low pay has also led to a brain drain in the sector, with some medical professionals opting to work abroad, particularly in the Gulf states.
The new government has moved to address the issue of under-investment in infrastructure, allocating EGP 27.41bn ($4.08bn) to healthcare in the 2012-13 budget, up 18% on the previous fiscal year. But with national finances currently under intense pressure, the leadership will be looking to boost private investment in health care.
Egypt already has a sizeable private health sector, with some estimates suggesting that government expenditure makes up less than half of overall spending. Key international players have already expanded into the Egyptian healthcare market, with companies such as Saudi-Egyptian healthcare firm Andalusia Group and UK-based Capital Trust Group investing in facilities. The private sector arm of the World Bank, the International Finance Corporation (IFC), is backing Andalusia's expansion.
However, at present, private healthcare in Egypt is largely the preserve of the better-off, and treatment is costly. Hossam Badrawi, founder of the private Badrawi Hospital, told OBG that only 9% of hospital beds were located in private institutions.
Public-private partnerships (PPPs) are widely viewed as a sound way forward for the sector, enabling Egypt to harness private capital and expertise in the construction of its hospitals without overburdening the state. While Egypt has committed itself to PPPs in the past, the 25 January Revolution and its aftermath inevitably led to some of these developments stalling. However, work is already under way to build two PPP hospitals in Alexandria, which are university-linked facilities being built with IFC backing.
Egypt has laid firm foundations for reforms by making major improvements to the basics across its public health services. Infant mortality now stands at around a third of its 1995 levels, while infectious diseases have also been tackled effectively, although a recent discovery of the polio virus in a Cairo sewer highlights the fact that the risk of outbreaks still exists. Chronic diseases associated with lifestyle, such as diabetes, are also becoming an issue for Egypt in a trend reflected across many of the world's emerging markets.
The health minister has suggested that while private sector investment is key to future expansion, reforms will also need to focus on making the current system more efficient and effective. Observers point to a worldwide shift away from hospital-based systems towards set-ups where resources are channelled to primary care centres and clinics at a local level, which can refer patients to secondary and tertiary care if necessary. Such systems aim to take pressure off hospitals while encouraging patients to seek treatment at a local level early on. “For Egypt to reach international healthcare standards the government must create primary health care units with a good referral system," Badrawi told OBG. “That should be their primary goal."
While Egypt has improved its delivery of basic healthcare, new thinking will be needed to deliver more effective medical services. Given the size of Egypt's market, private sector participation looks likely to rise, provided the necessary structures are put in place.


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