Sie sind auf Seite 1von 25

Pre-Feasibility Study

PRIVATE HOSPITAL

Small and Medium Enterprise Development Authority


Government of Pakistan
www.smeda.org.pk

HEAD OFFICE
6th Floor LDA Plaza Egerton Road, Lahore
Tel (042)111 111 456,
Fax: 36304926-7
helpdesk@smeda.org.pk

REGIONAL OFFICE

REGIONAL OFFICE

REGIONAL OFFICE

REGIONAL OFFICE

PUNJAB

SINDH

KHYBER PAKTUNKHWA

BALOCHISTAN

8th Floor LDA Plaza,


Egerton Road,
Lahore.
Tel: (042) 111 111 456,
Fax: (042) 36370474
helpdesk.punjab@smeda.org.pk

5TH Floor, Bahria Complex II,


M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk.sindh@smeda.org.pk

Ground Floor
State Life Building The Mall,
Peshawar.
Tel: (091)111 111 456, 9213046-7
Fax: (091) 286908
helpdesk.NWFP@smeda.org.pk

Bungalow No. 15-A Chamn


Housing Scheme Airport Road,
Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
helpdesk.balochistan@smeda.org.pk

April, 2012

Pre-Feasibility Study

Private Hospital

DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject
matter and provide a general idea and information on the said area. All the material
included in this document is based on data/information gathered from various sources and
is based on certain assumptions. Although, due care and diligence has been taken to
compile this document, the contained information may vary due to any change in any of
the concerned factors, and the actual results may differ substantially from the presented
information. SMEDA does not assume any liability for any financial or other loss
resulting from this memorandum in consequence of undertaking this activity. Therefore,
the content of this memorandum should not be relied upon for making any decision,
investment or otherwise. The prospective user of this memorandum is encouraged to
carry out his/her own due diligence and gather any information he/she considers
necessary for making an informed decision.
The content of the information memorandum does not bind SMEDA in any legal or other
form.

DOCUMENT CONTROL
Document No.

PREF-53

Revision

Prepared by

SMEDA-Punjab

Issued by

Library Officer

Issue Date

March, 2004

Revision Date

April, 2012

2
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

EXECUTIVE SUMMARY................................................................................................................. 1

PROJECT PROFILE ......................................................................................................................... 2


2.1
2.2
2.3
2.4
2.5
2.6
2.7

SECTOR & INDUSTRY ANALYSIS ............................................................................................... 3


3.1
3.2
3.3
3.4

MACHINERY AND EQUIPMENT REQUIREMENT .................................................................................. 7


MOTOR VEHICLES ............................................................................................................................10

LAND & BUILDING REQUIREMENT .........................................................................................10


6.1
6.2
6.3
6.4

MARKET POTENTIAL ......................................................................................................................... 6


NATIONAL MEDICAL AND HEALTH ESTABLISHMENTS ...................................................................... 6
TARGET CUSTOMERS ........................................................................................................................ 7
DEPARTMENTS .................................................................................................................................. 7

MACHINERY DETAILS................................................................................................................... 7
5.1
5.2

HEALTH CARE DELIVERY ................................................................................................................. 3


PHYSICAL TARGETS AND ACHIEVEMENTS DURING 2010-11 ............................................................. 4
HEALTH AND NUTRITION EXPENDITURES ......................................................................................... 5
REGULATIONS ................................................................................................................................... 6

MARKET INFORMATION .............................................................................................................. 6


4.1
4.2
4.3
4.4

OPPORTUNITY RATIONALE ............................................................................................................... 2


PROJECT BRIEF ................................................................................................................................. 2
PROJECT CAPACITY AND RATIONALE ............................................................................................... 2
PROJECT INVESTMENT ...................................................................................................................... 2
PROPOSED LOCATION ....................................................................................................................... 3
KEY SUCCESS FACTORS / PRACTICAL TIPS FOR SUCCESS ................................................................. 3
THREATS FOR THE BUSINESS ............................................................................................................ 3

TOTAL LAND REQUIREMENT ...........................................................................................................10


SUITABLE LOCATIONS .....................................................................................................................11
COVERED AREA REQUIREMENT .......................................................................................................11
UTILITIES REQUIREMENT .................................................................................................................13

HUMAN RESOURCE REQUIREMENT .......................................................................................13


7.1 HUMAN RESOURCE REQUIREMENTS ................................................................................................13
7.1.1
Consultants ............................................................................................................................13

FINANCIAL ANALYSIS ..................................................................................................................15


8.1
8.2
8.3

FINANCIAL ANALYSIS ..................................................................................................................17


9.1
9.2
9.3

10

INITIAL PROJECT COSTS ...................................................................................................................15


ESTIMATED TIME FOR PROJECT COMPLETION ..................................................................................16
PROJECT RETURNS ...........................................................................................................................16

PROJECTED INCOME STATEMENT .....................................................................................................17


PROJECTED CASH FLOW STATEMENT ..............................................................................................18
PROJECTED BALANCE SHEET ...........................................................................................................19

KEY ASSUMPTIONS .......................................................................................................................20

3
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

1 EXECUTIVE SUMMARY
Population of Pakistan has been increasing with the greater percentage. It has become
very difficult for the Government to provide health facilities to large number of
population. This arise a strong need of private hospitals with modern technology and
better infrastructure. This pre feasibility study provides guidelines for setting up a private
hospital. The total project cost is estimated at Rs. 95.578 million including a capital cost
& working capital of Rs. 87.104 million and Rs. 8.474 million respectively. Projected
IRR, NPV and Payback period for the proposed project are 36.39%, Rs. 99.544 million
and 3.86 years respectively. The project is having capacity of 25 private rooms, 10 beds
for general ward, 10 beds for labor ward, 5 bed for ICU/CCU, and 10 beds for
emergency. The project is proposed in the main location of the city in densely populated
areas.
Government is also very much keen about the health services. Government allocation for
health sector has decreased almost 47% compared to last year. During the year 2010-11,
the total expenditure on health is estimated at Rs. 42 billion, of which Rs. 19 billion
allocated for development expenditure and Rs. 23 billion for current expenditure.
Pakistan has availability of well trained and skilled human resource in this sector which is
the key area and plays a major role in the success and popularity of private hospitals. The
Consultants are the main reason for good patient base of the hospital. If the hospital has
renowned consultants, it would bring many patients, who will not only be the source for
consultation fee but will also be using both the outdoor and the indoor facilities of the
hospital thereby increasing the revenues for the hospital. This will also create an image
and reputation of the hospital in the eyes of general public. This document has complete
details of setting up private hospital.

1
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

2 PROJECT PROFILE
2.1

Opportunity Rationale

Growing number of patients and lack of maintained infrastructure has put tremendous
pressure on public sector hospitals. This has resulted in a rising demand for health
services in the private sector. Moreover, introduction of latest technology, hygienic
environment and professional staff attitude at private sector hospitals has also contributed
to the popularity of the hospitals in private sector. In addition to this, increasing trend of
medical diagnosis through sophisticated scientific medical tests has increased the need of
high capital investment in the hospital sector. Investors in the private sector can therefore
exploit this opportunity and provide latest and dependable diagnostic services on round
the clock basis, which is not available in the public sector hospitals.
Hospital is a capital-intensive project. Once the required infrastructure is developed, the
management focus should shift to maintain its repute, provide quality services and
engage reputed consultants to attract patients. Considering the current market structure,
the key success factor for a successful hospital is the provision of modernized
consultancy and diagnostics services in multidisciplinary areas.
Constrained public sector health system, growing population, introduction of new and
modern medical technologies and increased healthcare awareness in the country provides
a better business opportunity for the private sector to invest in the health care services.
2.2

Project Brief

The proposed project is for setting up a private hospital. This hospital would be a general
hospital catering both, indoor and outdoor patients. The hospital indoor facilities include
emergency, ICU/CCU, Rooms, General Ward, Labor Ward with a fully functional
operation theatre capable of conducting major types of surgeries. The outdoor facilities
would include a diagnostic clinic consisting of a complete medical laboratory and a
radiology department.
2.3

Project Capacity and Rationale

The proposed capacity of this hospital is given in the table below:


Table 2-1: Proposed Capacity
Emergency
ICU/CCU
Rooms (25 Nos)
General Ward
Labor Ward
2.4

10 Beds
5 Beds
25 Beds
10 Beds
10 Beds

Project Investment

Total project cost for setting up a Private Hospital is estimated at Rs 95.578 million.

2
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

2.5

Private Hospital

Proposed Location

Large public sector hospitals are concentrated in major cities of the country. Therefore, it
is suggested that new hospital should be opened up either in smaller cities, peripheral
areas or in those areas of the larger cities where there is little presence of existing medical
facilities. May be close to new emerging residential areas and main markets etc.
2.6

Key Success Factors / Practical Tips for Success


Availability of reputed consultants plays a major role in the success and popularity of
private hospitals. It is suggested that consultants from a wide range of specialties
should be attracted for the hospital. The key success factor in this business is the
availability of renowned consultants in the hospital. The consultants are the main
reason for good patient base of the hospital. If the hospital has renowned consultants,
it would bring many patients, who will not only be the source for consultation fee but
will also be using both the outdoor and the indoor facilities of the hospital thereby
increasing the revenues for the hospital. This will also create an image and reputation
of the hospital in the eyes of general public.
Availability of trained and professional Paramedical Staff.
High standard patient care and hygienic environment for the patients, trained nurses
and courteous para-medical staff.
Modern and reliable diagnostic services which would include a fully equipped
Radiology Department consisting of X-Ray, ECG and Ultra Sound Equipment and a
dependable Medical Laboratory for routine medical examinations.
A well equipped Operation Theatre capable of conducting major surgeries.
Reasonable and competitive fees, positioned against competitors fees.
Each city and each area within a city has different demographic characteristics. This
means that every area has its own set of medical problems. For example, in those
areas where there is a large concentration of industries, environmental pollution
related diseases and industrial emergencies would be more prevalent. It is therefore
suggested that a careful market analysis of the surrounding population should be
carried out before determining the services to be provided in the hospital.

2.7

Threats for the Business

One of the major threats to the business is a high turnover rate of medical, paramedical
staff and the consultants. To retain the consultants and other medical staff, salary package
and other benefits / facilities should be competitive.

3 SECTOR & INDUSTRY ANALYSIS


3.1

Health Care Delivery

While Pakistan enjoys a vast network of healthcare facilities, coverage, accessibility, cost
and quality of health care remain critical issues. An effective fight has been launched in
prevention and control of both communicable and non communicable diseases in order to
have an impact in the scenario of double burden of diseases in the country. The health
care system in Pakistan comprises the public as well as private health facilities. In the
public sector, districts have been given power for developing their own strategies,
programmes and interventions based on their local needs. In the private sector, the range
3
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

of health care facilities includes accredited hospitals and clinics, medical practitioners,
homeopaths and hakeems. In addition, nongovernmental organizations (NGOs) and
Pakistans corporate sector are also active in the health and social sector, the latter under
their Corporate and Social Responsibility (CSR) mandate. They have been successful to a
large extent in raising the level of awareness of positive health behavior among the
people. However, the health care system as a whole needs to be strengthened further at all
levels. The details of available human resource are given in the Table below:
Table 3-1: Available Human Resource1
2008-09
133,984
9,013
65,387
1,310
18,101
1,575

Registered Doctors
Registered Dentists
Registered Nurses
Population Per Doctor
Population Per Dentist
Population Per Nurse
3.2

2009-10
139,555
9,822
69,313
1,183
16,914
1,592

2010-11
144,901
10,508
73,244
1,222
16,854
1,701

Physical Targets and Achievements during 2010-112

Targets for the health sector during 2010-11 included establishment of 15 Rural Health
Centers (RHC), 40 Basic Health Units (BHUs) and up gradation of 45 existing RHCs and
900 BHUs. The manpower target included the addition of 5000 new doctors, 450 dentists,
3500 Nurses, 5500 paramedics and 500 traditional birth attendants. Under the preventive
program, about 8.5 million children were targeted to be Immunized and 25 million
packets of ORS were to be distributed during 2010-11. Till date 4500 HIV positive cases
have been reported to the National and Provincial AIDS Control Programs. It includes
3050 full blown AIDS cases. Around 1030 are receiving free treatment through 12 AIDS
Treatment Centers. Total numbers of TB cases reported are 62,321. Whereas the absolute
number of cases is 209,714 up to the third quarter of 2010 and the treatment success rate
remained 91 percent. The percentage of TB case-detection rate is 81 percent and cure rate
is 74 percent. Physical targets, achievements for 2010-11 are given in the table below.

1
2

Source: Economic Survey of Pakistan 2010-11 (Ch#11, Page #143)


Source: Economic Survey of Pakistan 2010-11 (Ch#11, Page #143)
4

PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

Table 3-2: Physical Targets and Achievements during 2010-113


Sub Sector
A. Rural Health Program
i. New Basic Health Units
(BHUs)
ii. New Rural Health Centres
(RHCs)
iii. Up gradation of existing
RHCs
iv. Up gradation of existing
BHUs
B. Beds in
Hospitals/RHCs/BHUs
C. Health Manpower
Development
i. Doctors
ii. Dentists
iii. Nurses
iv. Paramedics
v. Training of TBAs
vi. Training of LHWs
D. Preventive Program
i. Immunization (Million Nos)
ii. Oral Re hydration Salt
(ORS) (Million Packets)
3.3

Targets (No)
2010-11

Estimated
Achievements
(No)

Achievements
(%)

40

35

87

15

13

86

45

40

88

900

850

94

4500

4300

95

5,000
450
3,500
5500
500
100,000

4,500
400
3,200
5000
450
96,000

90
80
90
90
90
96

8.5
25

8
24

94
96

Health and Nutrition Expenditures

During the year 2010-11, the total expenditure on health is estimated at Rs. 42 billion, of
which Rs. 19 billion allocated for development expenditure and Rs. 23 billion for current
expenditure. These figures show decrease of 47% over the last year and work out to be
0.23% of GDP. It may be pointed out that as a result of improvement in fiscal front; the
government has been allocating relatively more resources to health sector.

Source: Economic Survey of Pakistan 2010-11 (Ch#11, Page #144)


5

PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

Table 3-3: Expenditure detail (Rs. billions)4


Fiscal
Year
2010-11
2009-10
2008-09
2007-08
2006-07
3.4

Total
Expenditure
42
79
74
60
50

Development
Current
Expenditure Expenditure
19
23
38
41
33
41.10
27.22
32.67
20
30

Change
(%)
-47
7
23
20
25

As %of
GDP
0.23
0.54
0.56
0.57
0.57

Regulations

The doctors working in the hospital should be registered with the Pakistan Medical and
Dental Council (PMDC). Prior sanction/approval from the government through Pakistan
Atomic Energy Commission (PAEC) is required in case of the equipment being installed
in the hospital such as X Ray machines, as they emit radiation and has to be sanctioned /
approved.

4 MARKET INFORMATION
4.1

Market Potential

From 1981 to 2011, the estimated population of Pakistan has grown from 85 million to
170 million making Pakistan the seventh most populous country in the world. This
growth rate of population has posed tremendous challenge to the existing infrastructure
for basic facilities in the country. Growing population, increasing industrialization,
resultant high level of environmental pollution, and increased healthcare awareness has
specially stretched the existing public health care system in the country. This has given
rise to high demand of private sector health care facilities to compliment its public sector
counterpart.
4.2

National Medical and Health Establishments5

Total number of hospitals and other health center detail is given in below table:
Table 4-1: Health Establishment in Pakistan

Year

Hospitals

Dispensaries

2005
2006
2007

919
924
945

4632
4712
4755

BHUs
Sub
Health
Centers
5334
5336
5349

Maternity &
Child Health
Centers

Total Beds

Population
Per Bed

907
906
903

101,490
102,073
103,285

1483
1508
1544

Source: Economic Survey of Pakistan 2010-11 (Ch#11, Page #142)


Source: Economic Survey of Pakistan 2010-11 (Statistical Appendixes, Health & Nutrition, Table # 11.1 )
6

PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

2008
2009
2010
4.3

948
968
972

Private Hospital

4794
4813
4842

5310
5345
5344

908
906
909

103,037
103,708
104,137

1575
1592
1701

Target Customers

The major target market for the facility consists of residential areas in the vicinity of the
hospital. The basic services that will be provided will also be determined by the need of
the locality and its adjacent areas.
4.4

Departments

The proposed hospital would have the following departments:


Emergency
ICU/CCU
Diagnostic Centre
Radiology Department
Surgical Consultancy
Medical Consultancy
Gynecology and Obstetrics review

5 MACHINERY DETAILS
5.1

Machinery and Equipment Requirement

The major cost involved in establishing a well-equipped hospital is the cost involved in
machinery, equipment and furnishing. The proposed hospital is providing basic in-house
diagnostic and radiology services to its patients. It is also proposed that the hospital is
equipped with a fully functional operation theatre.
Following machinery is proposed for setting up the private hospital:
Table 5-1: Machinery and Equipment Requirement6
Description
Radiology Department
X-Ray Apparatus with motorized tilting
table
Dark Room X-Ray Accessories
ECG Machine
Ultrasound Machine
Printer for Ultrasound
Total
6

No

Cost Per Unit


(Rs)

450,000

450,000

1
2
1
1

75,000
35,000
135,000
58,000

75,000
70,000
135,000
58,000
788,000

Machinery cost has been taken from Mediequip and Nurani Surgical, Lahore.
7

PREF-53/Apr, 2012/Rev 3

Total in Rs.

Pre-Feasibility Study

Private Hospital

Diagnostic Center
Blood Analyzer
ELISA for hormone Analysis fully
automatic
Binocular Microscope
Centrifuge Machine
Clinical water bath
Photo Calorimeter
Lab Incubator
Miscellaneous Lab Equipment
Oxygen Supply Plant with Supply in all
Rooms
Total
Operation Theatre
Operation Theatre Shadow less Light
Electric suction apparatus
Surgical Diathermy
Anesthesia Apparatus
Trolley for Anesthesia
Cardiac Resuscitation Trolley
Cardiac Monitor
Hydraulic Operation Table
Horizontal and Vertical Autoclave
Operation Table
Emergency Oxygen Kit
Total
Gynecology, Obstetrics & Pediatrics
Operation Theatre Shadow less Light
Electric suction apparatus
Delivery Table
Computerized Baby Incubator
Phototherapy Apparatus
Baby Cot with side protection
Total
ICU/CCU 5 Beds
Ventilator
Cardiac Monitors
Arterial Blood Gas Analyzer
Total
Grand Total

195,000
3,200,000

1
1
1
1
1
1
1

150,000
4,000
6,500
45,000
95,000
500,000
150,000

195,000
3,200,000
150,000
4,000
6,500
45,000
95,000
500,000
150,000
4,345,500

8
PREF-53/Apr, 2012/Rev 3

1
1

1
1
1
1
1
1
1
1
1
1
3

33,000
23,000
65,000
450,000
85,000
95,000
135,000
48,000
60,200
48,000
350,000

33,000
23,000
65,000
450,000
85,000
95,000
135,000
48,000
60,200
48,000
1,050,000
2,092,200

1
1
2
3
2
5

33,000
23,000
45,000
125,000
15,000
8,500

33,000
23,000
90,000
375,000
30,000
42,500
593,500

2
5
5

1,500,000
450,000
800,000

3,000,000
2,250,000
4,000,000
9,250,000
17,069,200

Pre-Feasibility Study

Private Hospital

In addition to this machinery, small auxiliary tools are also required for the smooth
operations of the hospital.
Table 5-2: Other Equipment Requirement
Description

No

Electricity Generator
Elevator
Light and Electricity Appliances
Instrument sterilizers
Baby Weighing Machine
Instrument cabinets
Stethoscope
LV Stands
Blood Pressure apparatus
Miscellaneous
Total

1
1
10
2
1
2
12
40
6

Cost Per Unit


(Rs)
1,700,000
1,500,000
1,500
5,000
3,500
8,500
2,000
850
1,950

Total
1,700,000
1,500,000
15,000
10,000
3,500
17,000
24,000
34,000
11,700
500,000
3,815,200

Moreover, there is other office equipment that is required for the daily operations of the
hospital.
Table 5-3: Office Equipment Requirement
Description

No

Split Units
Refrigerators
TVs
LCDs
Computers with UPS
Printers
Telephone Exchange
Telephone Sets
Fire Extinguishers
File Cabinets
Total

99
30
25
2
14
5
1
40
20
15

Cost Per Unit


(Rs)
45,000
29,000
11,000
50,000
40,000
15,000
100,000
1,000
4,000
9,000

Total in PKR
4,455,000
870,000
275,000
100,000
560,000
75,000
100,000
40,000
80,000
135,000
6,690,000

To furnish the hospital rooms, laboratories, and visiting area the following furniture is
required.

9
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

Table 5-4: Furniture and Fixture Requirement


Description

No.

Single side liftable beds


Examination Couch
Sofa set 3 seat
Chairs etc
Office Table
Bed Side Cabinets
Mobile stretcher trolleys
Wheel Chairs
Instrument trolley
Total

71
13
57
69
24
60
8
8
10

Cost Per Unit


(Rs)
18,900
9,950
18,400
4,199
3,450
3,500
8,500
5,900
6,500

Total
1,341,900
129,350
1,048,800
289,725
82,800
210,000
68,000
47,200
65,000
3,282,775

Alternative Chinese machines are available for Radiology and Diagnostic Departments
and for the Operation Theatre. However, their prices are 2 to 3 times lower than Japanese
equipment. However, a mix of Japanese and Korean machinery is proposed for the
project.
5.2

Motor Vehicles

Along with the above mentioned machinery and equipment the proposed hospital will
also be using two ambulances.
Table 5-5: Ambulance
Sr. No

Description

QTY

Ambulance

Cost per
Unit
1,500,000

Total Amount in Rs.


3,000,000

6 LAND & BUILDING REQUIREMENT


6.1

Total Land Requirement

For above recommended size of hospital, approximately 6,750 square feet (1.5 kanal)
area is required with 4 floors including the basement and open area.
Table 6-1: Land Cost
Description
Total Land

No. of Kanal Rate per Kanal (Rs.)


1.5
10,000,000

10
PREF-53/Apr, 2012/Rev 3

Total Cost in PKR


15,000,000

Pre-Feasibility Study

6.2

Private Hospital

Suitable Locations

A hospital is supposed to be in a location that is easily accessible and has considerable


population concentration. Considering the spread of new residential areas some of the
suitable locations in some of the cities of Pakistan are:
Table 6-2: Suitable Locations and their prises range
City

Location

Lahore

Main Road Johar Town


Canal Road
LCCHS New Phases
Jail Road, Gulberg
Ferozepur Road
West Ridge
Peshawar Road
North Nazimabad
Gulshan-e-Iqbal
Defence Phase I to III
Satellite Town
Madrussa Road, Cantt
Hazara Town
Jinnah Road
Susan Road
Railway Road
Madina Town
Dabgari garden
Hayatabad
Cantonment Area
New Multan

Rawalpindi
Karachi

Quetta

Faisalabad

Peshawar
Multan
6.3

Covered Area Requirement

Following is the covered area requirement split into various departments and sections:
Table 6-3: Covered Area Requirement
Building
Basement
Canteen
Pharmacy
Diagnostic
Wash rooms
Laboratory

No

1
1
1
5
1

Dimensions

20
20
30
6
30

x
x
x
x
x

20
15
35
6
35
11

PREF-53/Apr, 2012/Rev 3

Required
Area

Rate per
Sq. Ft

Total Cost
in Rs.

400
300
1,050
180
1,050

1,000
1,000
1,500
1,000
1,500

400,000
300,000
1,575,000
180,000
1,575,000

Pre-Feasibility Study

ICU/CCU
Store room
Lounge
space for stairs and
elevator
Total
Ground floor
Reception and waiting
room
Emergency
Wash rooms
Consultants rooms
General Ward
Nursing centers
Doctors' Room
Lounge
Nurses' room
Space for stairs and
elevator
Total
1st Floor
Bed rooms
Wash rooms
Consultants rooms
Labor Ward
Nursing centers
Lounge
Child nursery and labor
room
Space for Stairs and
Elevator
Store room

Private Hospital

1
1
1

20
20
25

x
x
x

25
15
20

500
300
500

1,500
800
1,500

750,000
240,000
750,000

20

15

300

1,000

300,000

4,580
1

50

50

2,500

1,500

3,750,000

20

30

600

1,500

900,000

5
4

6
12

x
x

6
12

180
576

1,000
1,500

180,000
864,000

1
1
3
1
1

20
12
12
25
15

x
x
x
x
x

30
10
10
20
12

600
120
360
500
180

1,500
1,500
1,500
1,500
1,500

900,000
180,000
540,000
750,000
270,000

10

10

100

1,000

100,000

5,716
14
6
12
20
12
25

x
x
x
x
x
x

14
6
12
30
10
20

2,352
180
576
600
120
500

1,500
1,000
1,500
1,500
1,500
1,500

3,528,000
180,000
864,000
900,000
180,000
750,000

25

25

625

1,500

937,500

20

15

300

1,000

300,000

20

15

300

800

240,000

5,553
13
5
1

14
6
30

x
x
x

14
6
30
12

PREF-53/Apr, 2012/Rev 3

8,434,000

12
5
4
1
1
1

Total

2nd floor
Bed rooms
Wash rooms
Operation theatre

6,070,000

2,548
180
900

7,879,500
1,500
1,000
1,500

3,822,000
180,000
1,350,000

Pre-Feasibility Study

Sterilization room
1 15
Surgeons room
1 12
Recovery room
1 15
Nursing centers
1 12
Lounge
1 25
Admin block
1 25
Space for Stairs and
1 20
Elevator
Total
TOTAL
Circulation Space 20% of Covered Area

Private Hospital

x
x
x
x
x
x

15
10
12
10
20
20

225
120
180
120
500
500

1,500
1,500
1,500
1,500
1,500
1,500

337,500
180,000
270,000
180,000
750,000
750,000

15

300

1,000

300,000

1,000

8,119,500
30,503,000
4,284,400

5,573
21,422
4,284.4

Total Civil Works Cost


6.4

34,787,400

Utilities Requirement
Electricity
Telephone
Gas
Water
Waste disposal

7 HUMAN RESOURCE REQUIREMENT


7.1

Human Resource Requirements

7.1.1 Consultants
Consultant services for the following specialized areas would be made available in the
hospital:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Gastroenterology Specialist
Pediatric Physician
General Surgeon
General Physician (Chest & TB)
Diabetes & Endocrinologist
Cardiologist
Orthopedic Surgeon
Gynecologist
Pathologist
Dentist

The consultants generally get 60-70% of the professional fee charged to the patient. In
surgical cases, 1/3rd of the fee charged is shared by the hospital, while the surgeon and
his team share the rest 2/3rd.
For the proposed size of hospital, apart from consultants following manpower is required:
13
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

Table 7-1: Human Resource Requirement


Positions
Chief Executive
Admin & Finance Manager
Admin Officers
Medical Officers
Nursing Staff
Laboratory Technicians
Operation Theater Assistant.
Mid Wives
Radiology Technicians
Receptionist
Accountant
Accounts clerk / Cashier
Security Guards
Electrician/technician
Cleaner + Ayas
Ward Boy /Office Boy
Male Nurse
Store Keeper
Total

Required

Salary per Month

1
1
2
24
45
9
6
6
6
6
2
3
6
3
6
15
18
3
162

100,000
75,000
35,000
45,000
18,000
15,000
15,000
12,000
15,000
15,000
25,000
15,000
10,000
12,000
7,500
7,500
10,000
9,000

14
PREF-53/Apr, 2012/Rev 3

Salary per Annum


1,200,000
900,000
840,000
12,960,000
9,720,000
1,620,000
1,080,000
864,000
1,080,000
1,080,000
600,000
540,000
720,000
432,000
540,000
1,350,000
2,160,000
324,000
38,010,000

Pre-Feasibility Study

Private Hospital

8 FINANCIAL ANALYSIS
8.1

Initial Project Costs

Following is the breakdown of the startup project cost for the proposed hospital. It is
suggested that the land for the hospital is purchased and a custom designed building
would be constructed keeping in mind the future expansion plan.
Table 8-1: Total Project Cost
Project Costs
Capital Costs
Land
Building
Machinery & Equipment
Other Equipments
Office Equipment
Furniture & Fixture
Ambulance (02 Nos)
Pre-operating costs7
Total Capital Costs
Working Capital
Raw Material Cost8
Cash Required for 2 Months Operations
Salaries
Electricity
Minimum Cash Required
Total Working Capital
Total Project Costs

Total Cost in Rs.


15,000,000
34,787,400
17,069,200
3,815,200
6,690,000
3,282,775
3,000,000
3,460,000
87,104,575
478,603
6,335,000
660,015
1,000,000
8,473,618
95,578,193

Table 8-2: Financing Plan


Financing
Debt (50%)
Equity (50%)
Total

47,789,096
47,789,096
95,578,192

These include salaries of administration staff during the period of construction; incorporation charges
and interest accrued during first year.
8
This represents chemicals, radiology films and other disposable items used in diagnostic department and
Operation Theatre.
15
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

8.2

Private Hospital

Estimated Time for Project Completion


Three months for completion of initial formalities i.e. formation, registration of the
company etc.
One year for purchase of land and construction of building.
Six months for sanction of loan (In case, if financing has to be arranged through
bank)
5-6 months for purchase of machinery, its installation and testing.
Thirty days for premises furnishing and Consultants / Staff appointments.

8.3

Project Returns

Project economics is intended to assess the financial sustainability of the project. This
financial analysis however, depends on the assumption used for the analysis. Since this
document concern a generic hospital business unit, the financials will vary considerably
for individual projects.
According to the information analyzed, the hospital business is a viable business
opportunity. Projected returns are given in the table below:
Table 8-3: Project Returns
Project
36.39%
Rs. 99,544,391
3.86

IRR
NPV
Payback Period (Years)

16
PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

9 FINANCIAL ANALYSIS
9.1

Projected Income Statement

PROJECTED INCOME STATEMENT


Year 1
Rupees
REVENUE
Indoors
- Surgery
- Room rent
Outdoors
- Consultation fee
- Diagnostic Center
Pahrmacy rent
Canteen Rent
DIRECT COSTS
Surgeon's & Anaesthesist's Share
Consultants' Share
Direct diagnostic and Surgery costs
Rooms Electricity
Total Variable Cost of Services
Fixed Overheads
Payroll
Depreciation
Maintenance
Total Services Cost (Fixed + Variable)
Contribution Margin
Gross Profit
OPERATING OVERHEADS
Payroll
Depreciation
Electricity
Other operating costs
Legal & professional charges
Telephone
Amortization of pre-opertaing ezpenses
Total
Rental Income
Financial charges
Long term loan @ 16%
Net profit before tax
Tax
Net Profit after tax

Year 2
Rupees

Year 3
Rupees

Year 4
Rupees

Year 5
Rupees

Year 8
Rupees

Year 9
Rupees

19,800,000
23,850,000
43,650,000

24,750,000
28,858,500
53,608,500

30,492,000
34,918,785
65,410,785

37,853,640
42,251,730
80,105,370

46,822,236
51,124,593
97,946,829

58,074,996
61,860,758
119,935,754

71,641,692
74,851,517
146,493,209

88,978,128
89,459,586
178,437,714

110,222,736
102,635,032
212,857,768

136,807,284
112,898,535
249,705,819

33,750,000
12,420,000
46,170,000
180,000
120,000
90,120,000

42,075,000
15,028,200
57,103,200
198,000
132,000
111,041,700

51,756,000
18,207,360
69,963,360
217,800
145,200
135,737,145

62,937,000
22,060,800
84,997,800
239,580
159,720
165,502,470

75,831,000
26,698,320
102,529,320
263,538
175,692
200,915,379

90,675,000
32,304,096
122,979,096
289,892
193,261
243,398,003

111,720,000
39,119,040
150,839,040
318,881
212,587
297,863,717

136,059,000
47,349,972
183,408,972
350,769
233,846
362,431,301

164,118,000
57,300,552
221,418,552
385,846
257,231
434,919,397

196,470,000
69,343,008
265,813,008
424,431
282,954
516,226,212

11,880,000
16,875,000
5,823,000
2,760,090
37,338,090

14,850,000
21,037,500
7,204,230
3,440,902
46,532,632

18,295,200
25,878,000
8,829,504
4,230,274
57,232,978

22,712,184
31,468,500
10,879,848
5,143,110
70,203,642

28,093,342
37,915,500
13,369,195
6,196,209
85,574,246

34,844,998
45,337,500
16,460,614
7,408,496
104,051,607

42,985,015
55,860,000
20,196,194
9,127,250
128,168,460

53,386,877
68,029,500
24,898,121
10,946,523
157,261,021

66,133,642
82,059,000
30,639,630
12,403,404
191,235,676

82,084,370
98,235,000
37,762,908
13,497,822
231,580,100

27,324,000
5,474,578
686,446
70,823,113

30,056,400
5,474,578
755,090
82,818,700

33,062,040
5,474,578
830,599
96,600,195

36,368,244
5,474,578
913,659
112,960,123

40,005,068
5,474,578
1,005,025
132,058,917

44,005,575
5,474,578
1,105,528
154,637,288

48,406,133
5,474,578
1,216,081
183,265,251

53,246,746
5,474,578
1,337,689
217,320,033

58,571,421
5,474,578
1,471,457
256,753,131

64,428,563
5,474,578
301,483,241

52,781,910
19,296,887

64,509,068
28,223,000

78,504,167
39,136,950

95,298,828
52,542,347

115,341,133
68,856,462

139,346,395
88,760,715

169,695,257
114,598,466

205,170,280
145,111,268

243,683,721
178,166,266

284,646,111
214,742,971

10,686,000
1,389,880
1,200,000
600,000
75,000
350,000
346,000
14,646,880
420,000

11,754,600
1,389,880
1,320,000
660,000
82,500
385,000
346,000
15,937,980
462,000

12,930,060
1,389,880
1,452,000
726,000
90,750
423,500
346,000
17,358,190
508,200

14,223,066
1,389,880
1,597,200
798,600
99,825
465,850
346,000
18,920,421
559,020

15,645,373
1,389,880
1,756,920
878,460
109,808
512,435
346,000
20,638,875
614,922

17,209,910
1,389,880
1,932,612
966,306
120,788
563,679
346,000
22,529,175
676,414

18,930,901
1,389,880
2,125,873
1,062,937
132,867
620,047
346,000
24,608,505
744,056

20,823,991
1,389,880
2,338,460
1,169,230
146,154
682,052
346,000
26,895,767
818,461

22,906,390
1,389,880
2,572,306
1,286,153
160,769
750,257
346,000
29,411,755
900,307

25,197,029
1,389,880
2,829,537
1,414,769
176,846
825,283
346,000
32,179,344
990,338

7,646,255
(2,576,249)
(2,576,249)

6,117,004
6,630,016
1,657,504
4,972,512

4,587,753
17,699,207
4,424,802
13,274,405

3,058,502
31,122,444
7,780,611
23,341,833

1,529,251
47,303,258
11,825,814
35,477,443

66,907,954
16,726,989
50,180,966

90,734,018
22,683,504
68,050,513

119,033,962
29,758,491
89,275,472

149,654,818
37,413,704
112,241,113

183,553,965
45,888,491
137,665,474

17
PREF-53/Apr, 2012/Rev 3

Year 6
Rupees

Year 7
Rupees

Year 10
Rupees

Pre-Feasibility Study

9.2

Private Hospital

Projected Cash Flow Statement

PROJECTED CASH FLOW STATEMENT


Year 0
Rupees
Profit after tax
Adjustment of non-cash changes and other items:
Depreciation
Amortization of preoperating expenses
Working Capital Changes
(Increase) in stocks
Increase/(Decrease) in financial charges payable
Increase/(Decrease) in payables

Year 1
Rupees

Year 2
Rupees

Year 3
Rupees

Year 4
Rupees

Year 5
Rupees

Year 6
Rupees

Year 7
Rupees

Year 8
Rupees

Year 9
Rupees

Year 10
Rupees

(2,576,249)

4,972,512

13,274,405

23,341,833

35,477,443

50,180,966

68,050,513

89,275,472

112,241,113

137,665,474

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

6,864,458
346,000

(113,526)
7,646,255
4,382,376

(133,584)
(1,529,251)
4,517,482

(168,521)
(1,529,251)
2,029,763

(204,604)
(1,529,251)
2,446,465

(254,089)
(1,529,251)
2,910,650

(307,034)
(1,529,251)
3,491,722

(386,460)
4,476,634

(471,905)
5,306,925

(585,475)
5,957,926

3,103,801
6,682,752

(478,603)
(478,603)

11,915,106

2,854,647

331,990

712,610

1,127,310

1,655,437

4,090,174

4,835,020

5,372,451

9,786,553

Net Cash Flow from operating activities

(478,603)

16,549,315

15,037,616

20,816,853

31,264,901

43,815,211

59,046,860

79,351,145

101,320,949

124,824,021

154,662,484

Pre-operating expenses
Fixed Capital expenditure
Net Cash Flow from investing activities

(3,460,000)
(83,644,575)
(87,104,575)

Capital issued
Long term Loan
Dividends paid
Net Cash Flow from financing activities

47,789,096
47,789,096
95,578,193

(9,557,819)
(9,557,819)

(9,557,819)
(9,557,819)

(9,557,819)
(9,557,819)

(9,557,819)
(9,557,819)

(9,557,819)
(9,557,819)

7,995,015

6,991,495

5,479,797

11,259,033

21,707,081

34,257,391

Cash generated (injected) during the year

18
PREF-53/Apr, 2012/Rev 3

59,046,860

79,351,145

101,320,949

124,824,021

154,662,484

Pre-Feasibility Study

9.3

Private Hospital

Projected Balance Sheet

PROJECTED BALANCE SHEET


Year 0
Rupees

Year 1
Rupees

Year 2
Rupees

Year 3
Rupees

Year 4
Rupees

47,789,096
47,789,096

47,789,096
(2,576,249)
45,212,848

47,789,096
2,396,263
50,185,360

47,789,096
15,670,668
63,459,765

47,789,096
39,012,501
86,801,598

47,789,096

38,231,277

28,673,458

19,115,639

9,557,819

4,382,376
7,646,255

8,899,858
6,117,004

10,929,621
4,587,753

13,376,086
3,058,502

16,286,736
1,529,251

19,778,459
-

24,255,093
-

29,562,017
-

35,519,943
-

42,202,695
-

95,578,193

12,028,632
95,472,756

15,016,863
93,875,680

15,517,374
98,092,778

16,434,588
112,794,005

17,815,987
140,095,028

19,778,459
192,238,465

24,255,093
264,765,612

29,562,017
359,348,009

35,519,943
477,547,048

42,202,695
621,895,274

Freehold Land

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

Building
Medical Equipment and furniture
Accumulated depreciation

34,787,400
33,857,175
68,644,575

34,787,400
33,857,175
(6,864,458)
61,780,118

34,787,400
33,857,175
(13,728,915)
54,915,660

34,787,400
33,857,175
(20,593,373)
48,051,203

34,787,400
33,857,175
(27,457,830)
41,186,745

34,787,400
33,857,175
(34,322,288)
34,322,288

34,787,400
33,857,175
(41,186,745)
27,457,830

34,787,400
33,857,175
(48,051,203)
20,593,373

34,787,400
33,857,175
(54,915,660)
13,728,915

34,787,400
33,857,175
(61,780,118)
6,864,458

34,787,400
33,857,175
(68,644,575)
-

3,460,000

3,114,000

2,768,000

2,422,000

2,076,000

1,730,000

1,384,000

1,038,000

692,000

346,000

478,603
7,995,015
8,473,618
95,578,193

592,128
14,986,510
15,578,639
95,472,756

725,713
20,466,307
21,192,020
93,875,680

894,234
31,725,341
32,619,575
98,092,778

1,098,838
53,432,422
54,531,260
112,794,005

1,352,927
87,689,814
89,042,741
140,095,028

1,659,961
146,736,674
148,396,635
192,238,465

2,046,421
226,087,819
228,134,240
264,765,612

2,518,326
327,408,768
329,927,094
359,348,009

3,103,801
452,232,790
455,336,590
477,547,048

CAPITAL AND RESERVES


Issued, subscribed and paid up capital
Retained Earnings

Year 5
Rupees

Year 6
Rupees

Year 7
Rupees

Year 8
Rupees

Year 9
Rupees

47,789,096
74,489,945
122,279,041

47,789,096
124,670,910
172,460,007

47,789,096
192,721,423
240,510,520

47,789,096
281,996,895
329,785,992

47,789,096
394,238,008
442,027,105

Year 10
Rupees
47,789,096
531,903,482
579,692,579

LONG TERM LOAN


Long term loans - unsecured
LONG TERM LOAN @14%

CURRENT LIABILITIES
Creditors accrued and other liabilities
Financial Charges payable

FIXED CAPITAL EXPENDITURE

Preoperating expenses

CURRENT ASSETS
Raw Material Inventory
Cash and Banks balances

19
PREF-53/Apr, 2012/Rev 3

606,895,274
606,895,274
621,895,274

Pre-Feasibility Study

Private Hospital

10 KEY ASSUMPTIONS
Table 10-1: Revenue Assumptions
Description
Surgery
- General Surgery
- No of operations per month
- Average fee per operation
- Gynecology & Obstetrics
- No of deliveries per month
- Average fee per delivery
Room Rent
- No of Rooms
- Working Days
- Total Working Days (Weighted)
- Occupancy Rate
- Occupancy
- Room Rent per Day
Emergency
- No of Beds in Emergency
- Working Days
- Total Working Days (Weighted)
- Occupancy Rate
- Occupancy
- Bed Rent per Day
Labor Ward
- No of Beds in Labor Ward
- Working Days
- Total Working Days (Weighted)
- Occupancy Rate
- Occupancy
- Bed Rent per Day
ICU/CCU
- No of Beds in ICU/CCU
- Working Days
- Total Working Days (Weighted)
- Occupancy Rate
- Occupancy
- Bed Rent per Day

Assumptions

15%
10%

30
25,000

10%
10%

45
20,000

10%
10%

10%
10%

10%
10%

10%
10%
20

PREF-53/Apr, 2012/Rev 3

Annual
Growth Rate

25
360
9,000
45%
4,050
3,000
10
360
3,600
50%
1,800
1,500
10
360
3,600
50%
1,800
1,500
5
360
1,800
50%
900
3,000

Pre-Feasibility Study

Private Hospital

General Ward
- No of Beds in General Ward
- Working Days
- Total Working Days (Weighted)
- Occupancy Rate
- Occupancy
- Bed Rent per Day
Diagnostic center
- Ultra-Sound
No of patients per month
Ultrasound Fee per patient
- X-Ray
No of patients per month
X Ray Fee per patient
- ECG
No of patients per month
ECG Fee per patient
- Complete Blood Test/Urine Test
No of patients per month
Test Fee per patient

10%

10
360
3,600
50%
1,800
2,000

10%
10%

450
750

10%
10%

450
550

10%
10%

450
500

10%
10%

450
500

10%

Table 10-2: Electricity Assumptions


Room Electricity Consumption
One Ton AC Operating for 16 Hours/Day
Other Electric Appliances
Rate Per Unit (Rupees/Kwh)
Electricity Price Growth Rate

26.67 units
6 units
15
10%

Table 10-3: Operating Expense Assumptions


Costs
Surgeon's & Anesthetists Share
Consultants' Share
Direct Diagnostic Costs

Basis
60% of Total Surgery Fee
50 % of Total Consultation Fee
15% of Total Diagnostic Center Fee

Table 10-4: Other Operating Expense Assumptions


Accounts Payable Cycle
Raw Material Inventory
Amortization Of Pre-Operating Expenses

30 Days
30 Days
10 Years
21

PREF-53/Apr, 2012/Rev 3

Pre-Feasibility Study

Private Hospital

Table 10-5: Financial Assumptions


Interest On Long Term Loan
Long Term Debt Tenure
Weighted Average Cost Of Capital

16%
5 years
20%

22
PREF-53/Apr, 2012/Rev 3