Hamza Asumah, MD, MBA
Healthcare entrepreneurship in Africa is an ever-evolving industry, with many healthcare practitioners and entrepreneurs seeking to provide quality healthcare services to the African population. One key factor that entrepreneurs must consider when starting a healthcare business is the practice model they will adopt. There are two main practice models that healthcare providers and entrepreneurs can choose from: private/group practices and premiums.
Private/group practices are the most common practice model in Africa. In this model, healthcare providers operate as independent businesses and provide services to patients on a fee-for-service basis. Private/group practices can be owned by one or more healthcare providers and can offer a range of services, from primary care to specialized medical services. This model provides healthcare providers with more control over their practice and allows them to develop their brand and reputation.
On the other hand, premiums are a relatively new concept in Africa. In this model, healthcare providers offer healthcare services to members who pay a monthly or annual fee. In return, members receive a range of healthcare services, including preventive care, consultations, and specialist care. Premiums are often offered by insurance companies or healthcare organizations and can include both primary care and specialized medical services.
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There are pros and cons to both private/group practices and premiums. Private/group practices offer healthcare providers more autonomy and control over their practice. They can choose which services to offer, set their own prices, and develop their brand and reputation. However, private/group practices can also be more challenging to manage, as healthcare providers must handle all aspects of their business, including marketing, finance, and administration.
Premiums offer healthcare providers a more stable source of income, as members pay a regular fee for access to healthcare services. Additionally, premiums can provide healthcare providers with a larger patient base and can be more efficient in terms of administration and billing. However, premiums can also be more restrictive in terms of the services offered, and healthcare providers may have less control over pricing and service delivery.
There is limited research on which model works better in the African healthcare market, as the success of a practice model depends on several factors, including the type of healthcare services offered, the target patient population, and the regulatory environment.
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However, there have been some studies that have compared the two models in other regions of the world. A study published in the Journal of Medical Economics in 2015 compared the financial performance of private/group practices and premiums in the United States. The study found that private/group practices generated higher revenue per physician and higher profit margins compared to premiums. However, premiums had a lower rate of non-reimbursed expenses and higher patient volumes compared to private/group practices.
Another study published in the Journal of Health Economics in 2016 compared the quality of care provided by private/group practices and premiums in the United States. The study found that premiums had better quality of care for preventive services, such as immunizations and cancer screenings, compared to private/group practices. However, private/group practices had better quality of care for chronic disease management, such as diabetes and hypertension.
It is important to note that these studies were conducted in the United States and may not be directly applicable to the African healthcare market. The success of a practice model in Africa will depend on several factors unique to the region, including the regulatory environment, the availability of healthcare infrastructure, and the cultural and social factors that influence healthcare-seeking behavior.
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When choosing the right practice model for your career goals, it is important to consider several factors, including your financial goals, the services you want to offer, and the size of your patient base. For healthcare providers who value autonomy and control over their practice, private/group practices may be the best option. For those who prioritize stability and a larger patient base, premiums may be the better choice.
Both private/group practices and premiums have their advantages and disadvantages in the African healthcare market. The choice of practice model ultimately depends on individual career goals and the type of healthcare services being offered. As the healthcare industry in Africa continues to evolve, it is important for healthcare providers and entrepreneurs to stay informed about the latest trends and developments in the industry to make informed decisions about their practice model.
There are several hospitals in Africa that have been successful in both private/group practices and premiums models. Here are a few examples:
1. Netcare Group (South Africa) – Netcare operates a network of private hospitals and clinics in South Africa and is one of the largest healthcare providers in the country. The company offers a range of services, including specialist care, primary care, and emergency services. In addition to its private/group practices, Netcare also offers premiums through its medical scheme, which provides access to a range of healthcare services to its members.
2. Aga Khan Health Services (East Africa) – Aga Khan Health Services operates a network of hospitals, clinics, and pharmacies in East Africa. The company offers a range of healthcare services, including primary care, specialist care, and diagnostic services. Aga Khan Health Services operates both private/group practices and premiums, with its medical insurance scheme providing access to a range of healthcare services to its members.
3. Mediclinic International (South Africa) – Mediclinic operates a network of private hospitals and clinics in South Africa, as well as in other countries around the world. The company offers a range of services, including specialist care, primary care, and emergency services. Mediclinic also offers premiums through its medical scheme, which provides access to a range of healthcare services to its members.
4. Nairobi Hospital (Kenya) – Nairobi Hospital is a leading private hospital in Kenya, offering a range of healthcare services, including specialist care, primary care, and diagnostic services. The hospital operates both private/group practices and premiums, with its medical insurance scheme providing access to a range of healthcare services to its members.
These hospitals have been successful in both private/group practices and premiums models by offering a range of healthcare services to meet the needs of their patients, while also being adaptable to changing trends and demands in the healthcare industry.
Overall, the choice of practice model will depend on individual career goals and the type of healthcare services being offered. Healthcare entrepreneurs and providers should carefully evaluate the advantages and disadvantages of each model and consider which model is best suited for their individual needs and goals.
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Dr. Hamza Asumah 
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