Market Assessment and Financial Feasibility Assessment

Introduction to Market Analysis

The process begins with a market analysis that lays the foundation for a valid and viable medico-technical and commercial plan. A qualitative primary and secondary market assessment will be conducted to comprehend the healthcare demand and supply situation in the primary and secondary drainage areas of a project.

Market Assessment and Financial Feasibility Assessment

At this stage, hospital consultants travel to the project's location and other areas of interest. They interact with internal stakeholders, medical professionals, and patients to assess healthcare-seeking habits, prevalent ailments, available healthcare facilities in the region, and demand and supply economics in general. They also research and utilize their database for secondary data applicable to each project. This data pertains to healthcare demographics, disease profiles, the availability of healthcare facilities (competition), potential gaps, and pitfalls.

Complementary Financial Feasibility Study

The market analysis is complemented by a financial feasibility study, which encompasses various aspects of the project components contributing to its capital cost, operating revenues, and operating costs. As hospital consultants, we perform a detailed study that encompasses the following components:

• Includes both moveable and non-moveable assets
• Comprises hospital and allied buildings on the campus that could be envisaged with medical devices, medical gas systems, and patient-related furniture plans. Teaching aids based on the clinical and support services intended to be included in the new hospital are also considered. A service/department-wise generic list of medical devices and patient-related furniture is prepared with indicative, estimated market rates based on appropriate technology. This contributes to the moveable and immoveable assets components in the hospital project.

Non-Medical Devices and Vehicles

This section includes backup energy requirements (DG, UPS), IT services, communication equipment, ambulances, and other vehicles. These components play a crucial role in ensuring the hospital's operational efficiency and service delivery.

Operating Revenue

This section provides estimated revenue streams of the proposed hospital arising from patient services at the OPD and IPD levels, consultations, diagnostics, procedures, surgeries, room charges, other commercial services for the hospital, and fees and other forms of revenue.

Operating Costs

This section estimates all recurring expenditures on account of HR services, rendering clinical services, utilities such as power and water, medical gas expenses, fuel costs, laundry, and linen, among other expenses. Accurate estimation of these costs is crucial for the hospital's financial sustainability.

Financial Statements

Inputs from the above-stated sections provide inputs for the following financial statements:

• Depreciation, itemized for all asset classes
• Loan repayment statements (only if there is a debt component)
• Profitability statement
• Balance Sheet
• Cash Flow statement
• Break Even statement
• Essential Financial Ratios

Merits of the Study

These reports serve as your basic guideline or business plan and tell you upfront whether you should proceed or not. A small investment upfront can save you from a massive hole in your pocket. This study is supported with both qualitative and quantitative data. We ensure that it is conservative and covers the worst-case scenarios and pitfalls. They are bankable and can be used to obtain loans/financing for your project. They serve as a simulator, which allows you to look at different scenarios.

According to the International Hospital Groups, feasibility studies are fundamental when planning any new undertaking and form the basis and foundation for successful project implementation. The study records the essentials for both government and private projects, converting the framework scope of services to be provided into a functional, safe, high-quality, and cost-effective building design appropriate to local needs. This is a critical element of any project, ensuring the hospital is suited to the environment in which it is constructed and delivers high-quality healthcare delivery through cost-effective, low-maintenance building solutions.

Development and Project Management

The development phase of the project requires skillful and experienced project management to ensure it is completed to the required standard on time and within budget. The National and International Standards related to the construction aspect of the hospital project must be considered by providing knowledge and expertise concerning local building methods and a sensitivity to local culture that enables effective management of local subcontractors.

Medical Equipment Planning

The planning, specifying, supply, and installation of appropriate medical equipment is a complex operation involving coordination with manufacturers, designers, structural engineers, M&E consultants, clinical staff, and the project management team. Experience in undertaking this process can deliver financial benefits to the project through significant purchasing power and knowledge of the equipment marketplace. Highly qualified experience ensures that the most appropriate, financially beneficial, and highest quality equipment is selected.

Healthcare Facility Licensing

Medical equipment input is essential from the earliest stages of any healthcare project design to ensure that the facility provides the right envelope and range of building services to accommodate all the planned equipment requirements. The licensing of new healthcare facilities requires a complex range of skills and the application of detailed operational experience to ensure that the planned benefits of any new facility are achieved quickly and that the facilities are delivered to an operational state at the earliest time and in the most efficient manner.

Co-ordination and Management

The process requires careful coordination of equipment installation, staff recruitment, training, and the development and implementation of workable operational policies, procedures, and systems in a completely new environment. It requires detailed planning and project management of the highest quality. As noted by Hofstrand and Holz-Clause, the success of a feasibility study is based on the careful identification and analysis of all the important factors for the success of the business. Depending on the project, a few other items may be important. The basic premise of a feasibility study is to determine the prospective success of a proposed business venture.

Project Description and Business Scenarios

When describing the project, it is crucial to identify and explore business scenarios, business models, or opportunities the project will need in the future and how it can be organized to generate revenue. These insights may come from the market assessment completed beforehand. It is also important to eliminate business paradigms that are unrealistic and identify models that appear to have potential for further expansion. The project should be defined properly, with alternative plans in place, and the type and quality of products or services to be marketed should be clearly outlined. The business model framework, along with technical parameters like size, location, and kind of inputs, must be included. Additionally, the period from the time the project is initiated until it is up and running at capacity should be specified, along with its relationship to the surrounding geographical area.

References

• International Hospital Groups. (n.d.). Possibility Studies and Project Management.
• Hofstrand, D., & Holz-Clause, M. (n.d.). Feasibility Study Outline.