Arsalan Hashmani is the young boss of the Hashmani Hospitals. Primarily known for its eye care services, the group has entered into tertiary care now dealing with 25 additional specialties. Arsalan is a qualified Certified Financial Analyst (CFA), has an undergraduate degree in Accounting and Finance, and a Masters in Accounting from the University of Waterloo, Canada. Prior to taking over the hospital his father set up, Arsalan worked with international organizations such as the Scotiabank, Intercontinental Hotels Group, Capgemini Consulting, Phillip Morris International and the Government of Canada eHealth Initiative. 

BR Research sat down with him to talk about the hospital industry in Pakistan, the scale at which the sector operates and the regulatory challenges the private sector is facing in providing the best healthcare services to the patients in the country. Here are edited transcripts: 

BR Research: Tell us about the Hashmani group, and your plans for the group.

Arsalan Hashmani: Under Hashmani we have two brands—the Hashmani Hospital and Hashmani Foundation. The group manages three hospitals and one first-aid center; these include patients who can afford to pay as well as those who are not unable to afford our treatments. At the foundation, we have two hospitals that are completely not-for-profit, all free of cost. That is the portfolio. We started back in 1986 with first hospital built at Numaish Chowrangi, Karachi. My father, the founder, is an ophthalmologist by training flourished in the field. I joined the organization two and a half years ago, and our focus now is to expand in the tertiary segment—providing services in gynecology, urology, pediatrics and a range of other specialties.

Currently, we are at 80 beds capacity, but we are building a new space to reach 250-300 capacity. This will remain our flagship hospital. We also plan to open two more hospitals in Karachi and one in Thatta which will operate pro bono. We are also evaluating feasibility for a medical college and are in the process of identifying prospective locations. d. Usually hospitals hire medical practitioners but have difficulty in retaining quality human resource.

BRR: What is your business model?

AH:  Our staff at the front desk determines whether the patient can afford treatment. Those who cannot, are directed to welfare office. Until two years ago, we were sponsoring patient welfare entirely through own sources. However, we have now taken on board individual and institutional donors which include zakat donations as well. We have also lined up with two institutions, the Sri Lankan Eye Donation Society and the World Memon Organization (WMO). The arrangement is that the Sri Lankan Eye Bank Society will give corneas at subsidized rates while WMO will bear the cost of transplants.

BRR: What percentage of patient billings is financed by the hospital— and how have these numbers grown over the past few years? 

AH: On average, we serve about 3,5000 patients everyday In aggregate,.  A better estimate to gauge the distribution of self-finance versus those who cannot afford would be by the number of surgeries that are done. Around 30-35 percent of the surgeries are performed free of cost. Our growth has been very organic—mostly, word of mouth has allowed us to grow substantially—somewhere between 20-25 percent over the last decade.

Moreover, we have a lot of patients coming from the Middle East, as well as Europe and the US. This is due to the investment we have made in technology and equipment. I can confidently say, only 15-25 percent of the institutions in the world would have the same technology as we do. We also have an assisted training program for surgeons that come from all over the world to polish on their surgical skills.

BRR: Given your group is expanding so rapidly, have you thought about going public to raise funds? This could also give your group the mileage that you need. Generally, why hasn’t this interest materialized in the hospital industry? 

AH: That is an option, for sure. But the drawback is that it takes anywhere from one to two years to get yourself ready in terms of documentation, auditing etc.. But we need the funds right now.

There are a couple of reasons as to why the industry has not listed. First is that most hospitals are generally started and run by  doctors. While many have proven to be good at business, they aren’t businessmen by training. Moreover, majority of the hospitals around us are non-profit or charity-based. Private hospitals that have scale and provide quality services are far and few, looking for some form of funding, not necessarily public listing. Most of the  smaller private  hospitals are too small and struggling.

Some people have argued against listing as the experience of the only listed hospital in the country has not been great, to put it kindly. Shifa Hospital shows very low profit margins (8-12%)—the industry is very capital intensive with high overheads—whatever equipment we purchase, we have to spend $50,000-100,000 just for maintenance each year.

BRR: What is the distribution of hospitals in the country—how many are for-profit and how many are Section 42. Moreover, what would be the share of government run to private hospitals in the country?

AH: There is no  existing database on this subject. My idea is that most hospitals are private but cannot put a number on it. We can talk about bed capacity but even in that case, numbers are not available. Sizable hospitals are few, private clinics and medical centers are more common; apart from a few  such as South City or OMI, the industry hasn’t seen any structured investment.

BRR: Would you shed some light on the governance and regulatory structure of the industry. We have been told that private sector hospitals face high duties and taxation on the import of machinery and equipment, whereas public or military hospitals do not have to bear these costs. 

AH: This is a huge challenge. As a privately funded hospital providing broad based treatments, we have to compete with the likes of Agha Khan and JPMC. Machinery that cost us millions of dollars was donated to AKUH by one of its sponsors. Our foundation that runs two free hospitals is eligible for such donations as well, but our for-profit  private entity cannot. When we import our machinery, we incur large sums of duty, so we simply cannot compete with welfare and government hospitals.

I can tell you that we are financially stable enough to set up ten more hospitals, but we face two major challenges. One is the skyrocketing real estate prices. The amenity plots that have been allocated by the government for private hospitals have been bought by trusts etc. For instance, Agha Khan got its land at the price of one rupee per acre.

Second is the resource gap. Even if we set up these new hospitals, we need good hospital managers, technicians and staff. The latter we are tackling by establishing a medical college and institute for technical personnel. We are also involved in research that would bring new technologies, methodologies and techniques to perform surgeries with improved results. The regulatory challenges require government support.

BRR: Is there any regulatory body for the industry that would provide safety and quality frameworks?

AH: There are three institutions that work as regulatory bodies in the industry: Pakistan Medical Association (PMA), Pakistan Medical and Dental Council (PMDC) and College of Physicians and Surgeons Pakistan (CPSP). The onus falls upon these three to regulate how the operations are run, and how the fellows, doctors and surgeons provide treatment to the patients. But they are not fulfilling their responsibilities to the fullest

There are many challenges that need to be dealt with. The biggest is the mushrooming of clinics and shops with informal facilities run by one or more doctors who receive incentives and commissions. They supply medical treatment to patients and to cut down on costs, they let the patients go home after a surgery that normally would require 3-4 days stay in the hospital for recovery. The regulatory bodies must perform its role in ensuring safety and enforcing quality standards.

BRR: Wouldn’t setting up an association or coalition be your best bet to put your demands forward to the government? In fact, an association would also help you in gathering more patient data by way of information sharing and, support the research you are doing.

AH: There isn’t any private sector association for hospitals that would take our matters to the government. The problem is: who do we set up this association with? The popular hospitals which could have a say in the market are too few. We could bring OMI or South City on board but who else? Agha Khan will not become part of it because it is not for profit and is funded by donors.

As for data sharing, we are getting in touch with research institutions abroad and exchange patient data. We are planning to conduct collaborative research with a Europe based institution on combined data.

BRR: A lot of our peer countries including India, China and some East Asian economies are attracting medical tourism. You mentioned you have patients coming from overseas to get eye surgeries here, but in general, medical tourism hasn’t really picked up in Pakistan. Why isn’t the private sector thinking along these lines, especially when they could adopt cross-subsidy models to get a higher premium from overseas patients to finance low-income patients who cannot afford? 

AH: Security and political tensions in the country have affected how Pakistan is perceived overseas. Some patients still do visit—because it is simply so much affordable compared to medical treatment prices in developed markets,. We are thinking about creating a package.

BRR: Are there any efforts made to manage patient databases given how mobile and globalize lives are?

AH: This is what I was working on when I was in Canada. The government started a project which established a platform where all the patient history and records could be shared across hospitals and healthcare providers. This hasn’t been implemented fully but exists in some form or another in many countries via institutions. Bringing all the public, welfare and private hospitals and medical centers in one place is a huge undertaking.

In Pakistan, I know the institutions that are focusing on this problem.  The conflict here is about the confidentiality of the patient data and protecting rights of patients. These institutions are thinking about using the blockchain technology as one possible means to solve this issue.

BRR: Do you think it is a moral responsibility of the private sector to start thinking about prevention, instead of just cure?  

AH: I think the onus falls upon the government, rather than the private institutions. It is the state’s responsibility to work on health awareness and prevention. In its absence however, the private and non-profit institutions have stepped in and provided that role. Every week we conduct 8-10 medical camps across and outside the city. Others like National Institute of Cardiovascular Diseases (NICVD) have set up mobile medical units across the city.