As a public health professional, I often find myself reflecting on the striking contrast between Nepal’s banking sector and healthcare system. In recent years, the banking industry has undergone significant consolidation, with 347 banks and financial institutions merging into just 110 entities as of April 2024. This strategic move has undoubtedly strengthened the financial sector, improving operational efficiency, service reach, and stability. In contrast, Nepal’s healthcare sector remains highly fragmented, with a growing number of private hospitals, nursing homes, and diagnostic centers operating independently. Despite facing significant challenges such as financial constraints, workforce shortages, and uneven service distribution, healthcare institutions have not followed suit by merging. This brings us to an essential question: Can Nepal’s healthcare sector adopt a merger model similar to that of the banking sector?
Lessons from Bank Mergers
The recent wave of bank mergers in Nepal can offer valuable lessons for the healthcare sector.
Capital Strengthening: Mergers have enabled banks to meet the regulatory capital requirements set by Nepal Rastra Bank (NRB), thus enhancing financial resilience and stability.
Operational Efficiency: By consolidating resources, merged banks have reduced operational costs and become more sustainable in the long run.
Service Expansion: Larger, merged banks have been able to expand their service offerings, including digital banking solutions, to serve a wider customer base.
Risk Management: Mergers have also led to the creation of financially stronger institutions, which are better equipped to manage risks and prevent potential crises.
Potential Benefits of Healthcare Mergers
Applying a similar merger strategy to the healthcare sector could bring about several advantages:
Financial Viability: Many private healthcare institutions in Nepal operate with limited funding. Merging could create financially robust entities capable of investing in advanced medical technology, upgrading facilities, and attracting skilled professionals.
Addressing Workforce Shortages: Nepal is grappling with a critical shortage of healthcare professionals, particularly specialist doctors and nurses. Merged institutions could share resources more effectively, helping alleviate the strain on individual hospitals and improving service delivery.
Improved Service Coverage: While healthcare services are predominantly concentrated in urban areas, rural regions remain underserved. Mergers could help expand services to remote areas, thus creating a more equitable distribution of healthcare resources.
Enhanced Quality of Care: By standardizing clinical protocols, centralizing procurement processes, and integrating improved patient management systems, merged institutions could ensure better quality and consistency in care.
Government Incentives: The Ministry of Health and Population (MoHP) could introduce policies to encourage mergers, such as tax benefits, financial support, or other incentives for merged entities.
Regulatory Framework: A dedicated regulatory body could oversee healthcare mergers, ensuring fair practices, developing clear criteria, maintaining high-quality standards, and protecting public interests.
Public-Private Partnerships (PPPs): Collaborations between private hospitals and government health facilities could help create a more integrated healthcare network, improving service delivery across regions.
Awareness and Capacity Building: Educating healthcare entrepreneurs and professionals about the benefits of mergers and providing strategies for successful implementation could foster a more collaborative mindset.
Pilot Model: To mitigate risks, it may be prudent to test healthcare mergers on a smaller scale in select area. This pilot approach would allow for smoother transitions and better risk management before scaling up.
Conclusion
While numerous challenges exist, the potential benefits of healthcare mergers in Nepal are undeniable. By learning from the banking sector’s consolidation efforts, and with the right policies and frameworks in place, Nepal could move toward a more integrated, efficient, and resilient healthcare system. Such a shift is not only desirable but essential, as the country faces an increasingly complex and resource-constrained healthcare environment. Now, more than ever, it is time for Nepal's healthcare institutions to move beyond competition and toward collaboration for the sake of better healthcare for all. It is time to consider a unified vision for a healthier, more sustainable Nepal.
