The Nawaloka Group, primarily in private healthcare, plans to take its core competencies international in a bid to beat shrinking margins here. The group is in talks with a hospital in Dubai to manage and operate it, a top official told the Business Time. He said this is a skill/expertise the company wants to capitalise [...]

The Sunday Times Sri Lanka

Nawaloka Group eyes managing a Dubai hospital

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The Nawaloka Group, primarily in private healthcare, plans to take its core competencies international in a bid to beat shrinking margins here. The group is in talks with a hospital in Dubai to manage and operate it, a top official told the Business Time.

He said this is a skill/expertise the company wants to capitalise on in terms of going international. He added that in this respect, the group is eyeing similar opportunities in the region. “We want to take this core competency to the region mainly because it is more ‘manageable’ in terms of controlling costs and general efficiency as its closer in terms of travel time,” he said. He said plans will materialise by next year on the Dubai hospital.

The doctor-centric nature of the Sri Lankan healthcare industry suggests that patient volume depends on the quality of the visiting consultants, healthcare analysts say, adding that the lack of skilled medical personnel and the high negotiating power of consultants press margins by increasing personnel costs.

According to the Nawaloka official, this is the primary reason that Nawaloka wants to expand to Dubai. He said that the low margins earned on services can be attributed to the high bargaining power of doctors in the industry. “This dominance (doctors’) enables hospitals to absorb about 55 per cent of the charges made for surgical interventions and nearly 20 per cent of the charges made for medicinal treatments. We are left with only a small portion to cover the hospitals costs.”

He added that shortage of medical personnel is more distinct in private hospitals which are dependent on visiting specialists to attract patients, given the doctor-centric nature of the Sri Lankan healthcare industry.

An increasingly sedentary lifestyle, rapid urbanisation and an ageing population have amplified the pervasiveness of non-communicable diseases (NCDs) in the world and especially in Middle Eastern countries, according to healthcare analysts. The official added that this is intensified by the fact that NCDs typically require specialised treatments which entail longer hospital stays. “The private sector in the Middle East is, therefore, poised to benefit from the resulting anticipated demand for treatment of NCDs.”

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