Skip to main content
Case Study

Partnering with Healthcare Infrastructure Investors

By September 16, 2020December 14th, 2021No Comments

EBS Advisory was appointed by a healthcare fund management company to assist with the articulation of the development impacts resulting from their healthcare investments.  EBS conducted site visits to the funder’s operations and investments, engaged with patients and staff at the operations to obtain first-hand reports of their experiences to corroborate the data obtained. The outcomes of the site visits, together with the review of information presented was then incorporated into an impact report.

The South African Constitution guarantees every resident of South Africa, access to health services. The introduction of entry level medical aid schemes has allowed lower-middle income patients to access private health care through medical insurance. The location of the funds clinics in peri-urban and rural areas has significantly increased healthcare access to these communities and has furthered efforts in the country to achieve the Sustainable Development Goal (SDG) 3 targets as well as the country’s health care outcomes communicated in the National Development Plan (NDP) 2030.

Despite Government’s policy to issue hospital licenses mainly to historically disadvantaged individuals, most license holders find it difficult to raise the equity required to access further financing. This lack of financing has led to suboptimal hospitals being built and presents an opportunity for the Fund to support license holders with the funding required. Also, there is an opportunity to further transformation in the sector by consolidating fragmented players in the healthcare sector and challenging the dominance of the larger players in the industry. Consolidation will allow independent groups to benefit from increased economies of scale, have a stronger bargaining position with medical schemes, and thus, allow them to compete with the established operators. The Fund also invests in brownfield hospital projects that are not more than a year from positive cash flow, with the opportunity to further develop and consolidate these projects to enhance value and support longer-term income and capital growth.  Measuring their impact allows them to translate investments into a tangible and measurable footprint. At the Fund, they strive to increase the access, quality, and affordability of healthcare services to people in need of acute, sub-acute and primary healthcare services to achieve improved health outcomes.

As a result of their focus on healthcare provision, the Fund is able to also impact on economic activity and job creation. This happens through construction activities and the staffing of facilities. Lastly, they aim to create a society that is more equal for all people, and therefore reducing inequalities relating to gender and income are also high on their agenda. EBS continues to work with the fund to enhance its ESG performance monitoring, with a view to producing improved ESG reports and impact reports going forward.