SGH Group’s concept and application of Social Business Model in the Healthcare Industry.
(Al-Sabeel and BAB Al-Khair Hospitals Projects)
Saudi German Hospitals Group (SGH Group), headed by Eng.Sobhi Batterjee is developing many Not-for-Profit Hospitals for the poor and translating into practice the Social Business model in Finance and Banking put forward by the eminent Nobel Laureate Prof. Muhammad Yunus (Grameen Bank) in the Healthcare Industry. The concept is leveraging the private sector knowledge to cut the cost to provide services and products to the poor at the cost and also to Leverage the private sector brand, purchasing power, economies of scale and speedy project execution.
SGH Group is working with like minded organizations like BAB Al-Khair, IDB, Grameen Bank, CCC, GE and other businessmen in the nations for not for Hospitals in countries like KSA, Sudan, Bangladesh, UAE, and gradually other Asian and African nations will be covered.
Social Business goes beyond individual charity initiatives due to its long term impact and sustainable development of the Communities and integration as well as participation of the target group. Despite many efforts by the World Bank, NGOs, Local Governments, Development Banks, the poor in many parts of the world are still poor despite specific aids and assistance. This proves that we really need to look at a new concept of how to do business with the poor to make them part of global business and development while recognizing their self pride and provide opportunity to constructively participate into the economic activities. The poor cannot participate in the benefits of globalization without an active engagement and without access to services and products that represent the global quality standards especially in critical areas like the Healthcare and Education. The Bottom of the Pyramid (BOP) must be considered as a market that provides a new opportunity for the private sector’s CSR initiatives and a forum for innovative solutions. Old and tired solutions cannot create self sustaining markets at the Bottom of the Pyramid. We need to develop new business models and strategies for BOP. The BOP market potential is huge, 4 to 5 billion underserved people and an economy of more than $13 trillion PPP. The needs of the poor are many. The case for growth opportunity in the BOP markets is easy to make. However, to participate in these markets, the private sector must learn to innovate to suit the market segment. Traditional products, services, and management processes will not work.
The Middle East, Asian and African Continents with all its strategic location, diverse resources, and huge population is not able to acquire a fast pace of development. The indicators reported from the region usually fall below average, when compared to those of the rest of the world. Among these are the income per capita, the political stability index, the industrial productivity ratios, and the national levels of health indicators.
The region has been suffering of illiteracy, impoverishment, civil wars, corruption, and diseases. All these add to the burden of governments in planning and implementing a corrective policy to reface the performance of these regions, to catch up with the rest of the world. Most of the mentioned problems are strategically tackled by the Governments of the region, and by coordination between the local authorities. But when it comes to Health, it is not the problem of the Middle East, Asian and African Governments alone anymore. Other developing countries are also facing a rising constant danger, if no proper action is undertaken by the Industrial and Business Leaders to help and cure the region of its health problems. The danger lies in the sequence of interrelated and coexisting problems that are to affect these nations, if no rapid interventions are taken.
Diagram explaining how the investments in health contribute to the overall economic development (Source: WHO report 2006).
As demonstrated in the previous diagram, investing in the provision of Healthcare services will lead to an improved status of Health, which subsequently would enhance the educational attainment, increase savings and investments lower the dependency ratio, accompanied by enhanced labor productivity. All these would finally improve the economic growth of the country. In the same sequence, if a country is lacking the needed investments to provide satisfactory Healthcare services, most probably its Health status will be low, with a low attainment on education, minimal savings, high dependency ratio, low labor productivity, and finally a redundant economic growth for the whole country. A case noticed in several countries of the Middle East, Asia as well as Africa.
As much we believe “prevention is better than cure”, it is much easier to organize efforts to fight against health problems at their initial stages, instead of waiting for these diseases to spread across borders and continents, and attack other countries, and thus become epidemics and economic ailments, preventing the progress of all nations.
The developed world is becoming more and more aware of such problems, demonstrated by the increasing commitment of many of the developed countries in establishing organizations, and structuring policies to fund healthcare programs, whether through disposition of direct grants and funds to the local authorities of developing countries, or through funding programs and campaigns of specific organizations concerned with improving the levels of health and productivity.
To alleviate the dangers of poor health status abundant within the Middle East, Asian and African Region, a united contribution of regional and multinational healthcare providers and other industry leaders is mandated. By developing such models of commitment initiated by the Saudi German Hospitals Group(SGH Group) for Not for Profit Hospitals, we hope other parties would join their efforts, expertise and experiences in developing and managing similar facilities, for the sake of the poor population of the Middle East, and African Countries.
In the process of planning for the Not for Profit Hospitals, the SGH Group is focusing on:
§ Selecting the countries, where such hospitals will be of great benefit for a large sector of the population,
§ The Hospitals provide Primary & Secondary Health care services,
§ The Hospitals are to be of low investments, approximately US$ 5-6 million,
§ The hospital is planned on a land plot of 25,000- to 30,000 sqm,
§ The workforce needed is around 150-200 Manpower of different specialties,
§ The Hospitals’ capacity is to be 50 Beds and100 Beds expandable to 150 Beds,
§ The Hospitals models are of flexible design, allowing for the accommodation of patients according to their different healthcare services needs, and admission.
After repeated trials, SGH Group has successfully reached a standard hospital design that matches all the above mentioned criteria, and ensures successful long term operability. The Not for Profit Hospitals – project is based on charging a subsidized user fee, in return for providing a high quality medical service. A policy that proved to be beneficial in maintaining the ability of healthcare facilities to provide optimum levels of health services on the long run. The hospital will be able to cover its operations and maintenance costs from the subsidized fee. This will allow the hospital to run successfully without facing any future funding problems, or adding to the burden of a country’s government to keep it running.
SGH Group and MAF (Medical Association Foundation) are working to develop many BAB Al-Khair Not for Profit Hospitals in many cities and remote areas of Saudi Arabia with support of local authories who will provide required land for the Projects. The initial Hospitals are being planned at Makkah and Jeddah. The proposed Management of the Al-Khair Hospitals is entrusted to Board Members of Medical Association Foundation (MAF). Other members from different Organizations are expected to the join the Promoters Club including many significant businesspersons of Saudi Arabia.
SGH Group and Al-Sabeel- SGH Group is also working with many Institutions and Businessmen to develop several 50-100 beds-Not for Profit Hospitals in countries like Sudan, Bangladesh, UAE, Egypt….etc.