With a burgeoning, young population and subsequent strain on the healthcare system, where a huge gap between quality of service provision and the needs of the market does not go unnoticed, Egypt sees significant opportunities to invest in and develop the health sector.
The Egyptian healthcare system faces multiple challenges in ensuring and improving the health of Egyptians, combating illnesses associated with poverty and lack of education as well as responding to the increasing number of patients. Challenges that the public sector alone cannot meet.
Population growth and increased health awareness contribute to driving Egypt’s healthcare to expand its scope and channel more efforts into innovative solutions.
A broad challenge is providing quality health service nation-wide in a more distributed manner as many rural and remote areas remain underserved or cut off amid poor distribution of medical facilities and equipment, number of beds, doctors available per population size.
“You hear many stories of people traveling miles from their homes, spending a lot of money to get services in Cairo then falling sick along the way,” said Karim Hussein, CEO of D-Kimia Diagnostic Solutions, a biotech startup that develops diagnostic solutions using nano-technology to identify the nucleic acid signature of a disease.
Hussein suggested technology tools like remote diagnostic centres, new ways of drawing blood samples then directed to a central laboratory, or tele-healthcare could reach a broader range of people enabling Egyptians based outside major cities (i.e. Cairo and Alexandria) to access decent healthcare. In addition, he mentioned homecare solutions for patients, whether affected by chronic diseases or recovering from surgery, to monitor them and deliver nursing or medical aid when needed. Wearables have a great potential to transform the healthcare space and extend services outside the hospital with devices like portable ultrasound connecting to a smartphone, wellness tools for basic diagnosis attached to a phone allowing to interact with a doctor, or insulin implants that control blood glucose level in diabetes patients without injection.
Hospitals are crowded
One key problem faced by Egyptian healthcare is over-crowdedness of state hospitals. In 2013, Egypt had an average of 14.88 beds for 10,000 people. Cairo, which accommodates the highest number of beds, recorded less than 34 beds for every 10,000 Egyptians, according to the Egyptian Center for Economic and Social Rights (ECESR). The Ministry of Health and Population (MoHP) operates 60% of hospital beds while universities, the army, and the private sector constitute the remaining 40%.
The Egyptian Ministry of Health’s statistics show that the number of public hospitals in 2011 was 643 serving a total population of around 80 million. The patient load is huge compared to the available facilities. Lines are always endless, patients wait long hours for consultation, facilities need renovation and expansion due to the overload, and much of the equipment needs frequent replacement. By 2014, based on data from the Health Ministry, about 40% of government hospitals were unable to provide decent medical services due to ill-maintained equipment and facilities.
Technologies in operation management could be developed, for example in creating electronic medical records, scheduling incubators, organising time slots of consultation for patients, keeping operating rooms properly equipped, ensuring periodic maintenance of diagnostic machinery.
“I’ve visited several hospitals in cities where large money is being spent on big facilities, but the hospitals are not running,” the D-Kimia CEO noted, “You’ll find a lot of resources wasted in Egypt. Healthcare is all about resource management.”
Egypt’s healthcare service also lacks well-trained doctors and nursing staff. Hussein, who’s also an investor in various startups in the healthcare field, believes there is great room for innovation in terms of quality management to support the physician on the job. He gave some examples like finding ways to normalise quality of care through processes, management systems that enforce standard protocols in hospitals and clinics, Netscapes providing latest clinical information on drugs with dosing and incompatibility with multiple drugs, ways to ensure patients get the right medication dosage through bar coding or tagging on medicines and patients’ bracelets, proper sterilisation facilities and devices like retractable single-use needles, apps giving reminders or alerts in pre-natal phase through 5 years after child birth.
He also highlighted the shortfall in primary care physicians as another area of improvement, explaining that Egyptians don’t have a family doctor who has their medical history, knows about their health state, or can advise specialist through referral where appropriate. He picked the ‘doc-in-a-box’ model, found in the US to some degree, as a breakthrough whereby patients walk into pharmacies and interact with physicians who can help at a diagnostic level, give prescriptions or refer them to the next level of care.
The deteriorating public health service thus does not adequately respond to the demands of the majority of citizens, meaning the Egyptian people heavily rely upon private doctors and clinics to fulfil primary healthcare needs.
Although the amount spent on healthcare has increased in monetary terms over the past decade, the share of healthcare spending by the government as a percentage of GDP has been decreasing over time. Based on World Bank figures, government expenditure on health is extremely low, making up just 1.5% of GDP, which is well below the 3% minimum spending stipulated by Egypt’s 2014 Constitution.
While state expenditure is steadily decreasing, the percentage of out-of-pocket spending for healthcare in Egypt is very high. The World Bank reports that contribution of out-of-pocket expenditure to the total healthcare costs amounts to 72%. Most Egyptian families are burdened by these costs, especially purchasing medication.
With minimal health insurance presence in the country, measured around 0.7% of GDP, and private health coverage forming a tiny part of it, newly established AXA Egypt found a fresh market to break in and grow though offering products adapted to the income and needs of Egyptians.
“As soon as we entered the Egyptian market, we saw the need for huge development in the healthcare delivery, and made it our key priority, we acquired Commercial International Life Insurance Company (CIL),” said Hassan El Shabrawishi, CEO of AXA Egypt, “Today, we’ve become one of the largest investors in Egypt since 2011.”
In his view, the real challenge in breaking through the healthcare market is how a business delivery model can better serve Egyptians at a lower cost by targeting all the society, not just its top segment.
“When you have a problem and a market need, you have an opportunity,” El Shabrawishi said. “If you do business in a way that does not provide solutions for the society, you fail’’.
The Egyptian government has some plans to finalise a national universal health law with the view to grant equitable access to healthcare services that will provide adequate coverage for the average citizen.
For the CEO of AXA Egypt, working towards large scale in the geographic distribution is key to reaching the masses and create meaningful impact in the lives of Egyptians.
“Through an efficient and cost-effective delivery model, you will treat more people at an affordable price or provide coverage, be it social security or private health insurance, to receive medical treatment,” he argued, “Healthcare is very sensitive, it’s a right for citizens.”
Besides government pledges to improve health service, Egypt requires private investments.
According to El Shabrawishi, the government will partner more with the private sector in the coming future as Egyptians will increasingly need to be covered by health protection, whether by private or public insurance, pushing the health insurance market to develop.
In critical need for investment in the healthcare industry, Egypt opens up vast opportunities for entrepreneurs.
“We can look at opportunities from an entrepreneurial perspective on how we can transform the process of healthcare from prevention (nutrition, lifestyle) to assessment like tele-medicine, and the relationships between providers and insurance companies,” stated Walid Bakr, managing director of the Abraaj Group, a private equity investing firm, at the RiseUp summit. Abraaj is aggressively investing in the Egyptian market by acquiring government-owned hospitals and other healthcare facilities.