1. Strategy Development
XXX Hospital Project

2. Justifications of XXX entry in to hospital sector
Widening demand gap
Government beds per population 5 ( Colombo)
Private beds per 1000 population 3 ( Colombo)
Growth of private sector hospitals
Average revenue growth 15%
Sector vision to be the leader in health care business
Platform to enter other areas in the Healthcare sector
Favourable impression in the market & among professionals about Hemas entry to hospital sector

3. Method of Entry to hospital sector
Hospital with unique concepts acceptable to local community
XXX Equity
Foreign partner, experienced in hospital management

4. Objectives of the XXX hospital Project
To established a Multi-specialty hospital in Colombo district.
To establish 2-3 satellite hospitals in selected outstations.
To support related special projects identified by Hemas.

5. Project model Multi-specialty hospital Group of hospitals
Colombo (01) , initially
Selected Outstations ( 03), later
Partnership with existing hospitals
Outsource unavailable facilities
Reach outstations

6. Multi Specialty Hospital Vs. Single Specialty hospital
Disease pattern in Sri Lanka
Direct patient care & Supportive care
Capital investment
Hospital utilization
Attracting doctors & patients

7. Group of Hospitals Vs. single hospital
Feeding hospitals
Demand in the Outstations

8. Hospital Model New concepts to attract doctors & patients
Use of IT in patient care & administration
Controlled infrastructure
High quality of care with minimal waiting time & cost
Comfortable environment for doctors & patients
Focused on the largest (60%) middle income group
Concentrate on the general specialties
Combination of Medical management & Hotel management

9. Three basic models
According to bed strength
Large
Medium
Small

10. Hospital Model A Bed strength 100 Cost: Rs. 1000 million
Multi-specialty General hospital
Curative, preventive & rehabilitative care
Services
General specialties
No high end,capital intensive services
Facilities
Inward & outdoor care
Special care units
Diagnostics ,up to CT scanner

11. Hospital Model B Hospital Model C beds -75 Beds -25
Project cost :Rs.750 million
Tertiary care facilities
Outdoor: all related specialties
Diagnostics up to CT scanner
Hospital Model C
Beds -25
Project cost :Rs.250 million
Inward: 04 General specialties
Outdoor: all related specialties
Diagnostics up to an US Scanner

12. Selection of the location
People
Population density
Household income & Expenditure on health
Demand gap
Government hospitals & beds
Teaching / University hospital
Availability of Government doctors
Private sector hospitals
Availability of land
Lease basis
Selection of the location.xls

13. Selected of areas Colombo Central : Krimandala
Colombo South: Rajagiriya, Malabe
Colombo North: Gampaha, Kribathgoda,
Galle : Karapitiya
Kandy : Municipality area
Kurunegalla: Omitted after preliminary analysis

14. Selection of the land Highway & Visibility Residential area
Closer to Government Hospital/ medical faculty
On a Lease basis 30 years
Other facilities
02 acres

15. Search for lands Contacts: BOI & Private Colombo Krimandala Mawata
Parliament road:
Kandy road
Negambo
High level road
Kurunegalla
Suitable private land on a lease basis
UDA land
Kandy
Suitable land of UDA
Land of Commercial Company
Galle
- 04 Plots of land available

16. Human Resource Preferred Doctors Nursing & other staff full time
University staff preferred
Second line, young doctors
IT competence
Part time / Full time staff
Pros & cons of permanent/part time staff
Mix of local & foreign doctors ( for back office work)
Nursing & other staff full time

17. Financial Forecast Assumptions made Model A hospital, with 100 beds
Utilization pattern
Ist Year 55%
2nd Year 75%
3rd Year 90%
HR.
Ist Year 90%
2nd Year 100%
3rd Year 100%
Finacial forecast.xls
Revenue forecast of hospital.xls

18. Project cost a. Capital Cost= SLR 1000 million
Capital Cost Category
% Project cost
Cost in SLR
(Million)
Depreciation
Annual contribution
Land
10%
100 30
3.3
Building
60%
600 20
Equipment
30%
300 10 40
Total
1000
63.3

19. Project cost b. Recurrent cost (SLR Million)
Category
% of cost
1st Year
2nd Year
3rd Year HR 57
51.3
Gen. Supplies
1.8
1.1
1.5
Med. Supplies 45
27.5
37.5
Diet 9
5.5
7.5
Overheads
15.5
9.5 13
15.3
Others
4.5
2.7 4
TOTAL
100
97.5
105
126

20. Revenue Forecast (SLR Millions)
Category
1st Year
2nd Year
3rd Year
Apollo
(100 Beds)
Channeling 6 8 11 -
Room Fees 31 42 56 46
Surgery 99
134
179
332
Laboratory fees 62 84
113 78
Diagnostics 27 37 49 65
Pharmacy
136
Others 12 15
255
TOTAL
264
359
479
683

21. Financial Forecast XXX Hospital
Revenue
1st
Year
2nd
3rd
Apollo
90%
Utilization
100 Beds
264
359
479
683
Expenditure
160
169
201
292
Gross profit
104
190
278
391

22. Project Schedule Completion of Project proposal Completion of Design
Agreements
Initiation of construction
Equipment installation
Training & recruitment of staff
Opening of the hospital

23. The Hospital project Feasibility Development of the concept & strategy
Medical plan
Development of the finances
Development of the project budget
Operational finances
Project planning

24. Feasibility Demography Epidemiology Health Services Market research
Financials