SUMMARIES OF IFC’s WORK

IN KEY FOCUS AREAS

Thematic Brief
March 2020 No. 8

Driving Innovation in Health Care

Private sector innovations have the potential to overcome key challenges in health while contributing to achieving Universal Health
Coverage (UHC) and the Sustainable Development Goals. This brief begins by reviewing the rationale for improved health and
some key challenges that need to be overcome. It then then discusses innovations that can help overcome these challenges—including
new ways to procure private sector services, disruptive models for providing high-quality, low-cost health care at scale, and
promising approaches to lower the cost of medical equipment and drugs. It discusses the impact of IFC’s investments and advisory
work in this area, identifies lessons learned, and outlines IFC’s approach for the coming years.

I. THE URGENT NEED TO IMPROVE in addressing communicable diseases and maternal and child
HEALTH health. Yet large gaps remain:

Improvements in health are integral to economic
development. Good health is consistently ranked as the most
desired outcome in life. In 1978, at the seminal International
Conference on Primary Health Care, the Alma Alta Declaration
affirmed that attaining the highest possible level of health is
“a most important world-wide social goal.” Beyond the intrinsic
value of improved health, increasing access to health care
contributes to economic output by reducing poverty, raising 1
incomes,2 and increasing productivity. The World Bank’s work
on the Human Capital Index (HCI) finds that improvements in
the health components of the index lead to large improvements
in productivity. As a result, the magnitude of improved health
3 particularly in South Asia and Sub-Saharan Africa.
on the overall economy is substantial. Researchers at Harvard’s
School of Public Health estimate that one extra year of life
expectancy increases GDP per capita by 4 percent.4 This suggests
that committing resources to health care is associated with a
“high return on investment, rivaling, or even surpassing, other
high-return investments like those in primary and secondary
education.”5
There have been dramatic gains in health overall, but
important challenges remain. The largest gains have been
• Communicable diseases have fallen by 40 percent amid a dramatic
reduction in diseases such as malaria, typhoid, and HIV/AIDS.
Several factors have underpinned these gains. For example,
increased access to the measles vaccines has saved the lives
of more than 17 million children since the year 2000.6
Improvements in access to water and sanitation have helped
combat diseases such as typhoid. Access to treatment and
lower-priced medications have been key to curbing the spread
of HIV/AIDS. Despite these successes, some diseases such
as multiple-drug-resistant tuberculosis are growing. Overall,
communicable diseases continue to extract a heavy toll,
• Maternal and neonatal death rates have been reduced by more
than 40 percent since 1990. This included a decline of fifty
percent in many countries in Sub-Saharan Africa. Contributing
to these large reductions was increased access to skilled
health care before, during, and after childbirth. Despite these
improvements, more than 2.7 million babies still die every
year, and more than 250,000 women die in pregnancy or
childbirth. Most of these deaths are preventable, with the
majority occurring in sub-Saharan Africa and South Asia.7

IFC Thematic Briefs are for internal use only and cannot be published in this form. But their contents may be used as background inputs to inform
external communications.
• Noncommunicable diseases (NCDs) have been rising—in many
developing countries, they are now the largest cause of ill health.
The spread of heart disease, diabetes, mental illness, cancer,
and other illnesses has been driven by unhealthy lifestyles
and diets, smoking, and pollution, among others. The burden
of disease from NCDs has increased by more than 40 percent
over the last 20 years. Some diseases, such as Type 2 diabetes
mellitus, are growing particularly fast: with diabetes expected
to double by 2030, with most cases occurring in low- and
middle-income countries. Outside of Sub-Saharan Africa,
NCDs now account for most deaths and disability. In Sub-
Saharan Africa, NCDs are rising rapidly, creating a “double
burden” of disease as countries face a growing NCD problem
while still facing a sizable challenge from communicable
diseases.
The Human Capital Index suggests that large gaps exist
in low- and middle-income countries. Overall the HCI suggests
that human capital is strongly correlated with income. This
relationship is far weaker for countries that perform in the
bottom third on the HCI. The lowest performers include middle-
income countries such as Nigeria, Pakistan, and India. Middle-
income countries that perform poorly on the HCI have large
populations—meaning they include many of the people struggling
from poor human-capital outcomes, including poor health
outcomes. This is illustrated in figure 1.
There is an urgent need for further improvements in health
outcomes. The World Bank’s work on the HCI points to very
large gaps across developing countries. Countries across the
world have agreed to overcome these gaps by meeting targets
in the Sustainable Development Goals (SDGs). SDG 3—“Ensure
healthy lives and promote well-being for all at all ages”—includes
goals to achieve large improvements in the treatment of mother
and child, and NCDs. To achieve these goals, progress would
need to occur three times faster than projected.8 It is estimated

FIGURE 1. THE HUMAN CAPITAL INDEX AND INCOME FOR THE BOTTOM THIRD OF
COUNTRIES (BUBBLE SIZE SHOWS SIZE OF POPULATION)
y = 0.0239x + 0.2014, R2 = 0.187

0.6

Bangladesh
0.5 India

0.5
Human Capital Index

South Africa
0.4 Ethiopia
Pakistan
DRC
0.4

Nigeria
0.3

0.3

0.2
6 7 8 9 10 11

Log GDP per captita (2011 PPP)

2
achieving SDG 3 will require substantial increases in investment,
which UNCTAD estimates at an additional US$140 billion per
year.
To achieve further improvements in health, countries
will need to overcome several hurdles. Additional resources
will need to be mobilized, and better care provided. As countries
do this, health-care systems will need to overcome many
challenges. Three of the most difficult challenges are:
• Improving the quality of care while lowering cost. In many
developing countries the quality of care is ineffective and
unsafe. In some cases, quality is so poor that access to care
actually leads to harm for patients. A study found that in
low- and middle-income countries more than 100 million
adverse events occur in hospitals each year. These events
contribute to around 2.5 million deaths every year.9 Many
developing countries include facilities that do provide high-
quality care. But they do this through an approach that is
resource-intensive, relying on a scarcity: highly skilled doctors
and nurses. This approach makes it difficult and expensive
to scale up to meet the needs of most of the population.
Accordingly, innovations are necessary to ensure that high-
quality health care becomes more widely available and at
lower cost.
• Reaching patients earlier. For many communicable diseases
it is appropriate to treat patients when they experience the
symptoms of the disease. Many health-care systems are set
up to provide care in this way. But for many NCDs and maternal
disorders such as pre-eclampsia—this is a costly and ineffective
way to provide care. Reaching patients earlier makes treatments
more effective and cheaper. Diabetes, for example, can lead
to heart disease, blindness, amputations, and other severe
complications. Treating these complications in hospital can
be five to six times more expensive than treating diabetes
with medication or insulin. Helping pre-diabetic patients
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avoid Type 2 diabetes through diet changes and exercise is
far less expensive—and has better health outcomes than
even the most effective treatments with medication. Of
course, the most cost-effective approach is often to help
people avoid pre-diabetes entirely through population-level
interventions to improve diet and exercise.
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• Paying for care in a sustainable and equitable way. Many developing
countries continue to rely on patients to pay for health care
provided by the public and the private sectors. This is estimated
to lead to financial distress for more than 800 million people
annually.11 This is a particularly large problem in many of the
larger countries that perform poorly on the Human Capital
Index—such as Pakistan, Nigeria, and India. In these countries,
patients directly pay out of pocket for more than two-thirds
of health care. Improving access to health care that is prepaid
through insurance, or public provision, is crucial to overcoming
the harm that arises from an over-reliance on out-of-pocket
payments.
II. THE POTENTIAL FOR PRIVATE SECTOR
INNOVATIONS TO IMPROVE HEALTH
Innovations in the private sector can play an important
role helping health-care systems overcome some of their
most difficult challenges. Underlying these innovations
are new and technology-enabled approaches to improving
co-ordination.
Innovative approaches to procuring services
New approaches to contracting are enabling the public
sector to better leverage the capabilities of the private
sector. Many developing countries are contracting private
sector providers into their social health insurance schemes.
This allows the public sector to leverage private sector capabilities
to deliver high-quality health care at relatively low cost while
reducing patients’ need to pay out of pocket for care. Spain’s
Alzira model of public-private partnerships (PPPs) goes a step
further and assigns specific areas of the country to the private
sector for health-care management. This gives the provider
an incentive to improve the population’s health and ensure
that patients receive health care earlier in the progression of
a disease. Another example is managed-equipment services
(MES). Under this approach, the private sector company uses
a lease contract to provide high-tech medical equipment—such
as x-ray machines, computerized tomography (CT) scan equipment,
and Magnetic Resonance Imaging (MRI) technology—to public
sector health facilities. The private company finances the
equipment, ensures that it is maintained properly, and trains
technicians to use the equipment. This approach helps overcome
a problem of “equipment graveyards” in which equipment falls
into disuse because it is not properly maintained and staff do
not know how to use it.
Innovative approaches to providing care
Processes first developed in manufacturing are being
applied to health care, generating potential for low-cost,
high-quality, delivery of care that can be scaled up. An
example is India’s Aravind Eye Hospitals, which is an early adopter
of this approach. Hospitals run by the institution explicitly
modeled their approach on McDonald’s restaurants—relying
on standardization and technology to achieve more consistent
and better outcomes at relatively low cost. This approach reduced
their need for highly skilled staff by making them far more
productive. For example, surgeons at Aravind conduct 2,600
surgeries per year, four times more than the average for surgeons
in India.12 Standardization, and strong systems, also makes it
easier for these business models to scale up their operations.
This approach has been applied to areas as diverse as eye surgery,
diabetes care, dialysis, pharmacy, and dentistry. Many of these
models have been early adopters of technologies such as
telemedicine, online treatment protocols, and electronic medical
records. The approach has led to costs that are ten to 50 percent
of that of other health-care providers of comparable quality.
Intervening earlier in the progression of a disease. Intermedica
is a Health Management Organization in Brazil that owns an
insurance company and healthcare facilities. Intermedica
integrates its health insurance operations with its provision of
primary, secondary, and tertiary care. This has allowed the
organization to intervene early with patients. For instance,
Intermedica implemented a prenatal-care program that reduced
the premature-birth rate by around 40 percent and the number
of births requiring intensive care by around 50 percent. In South
Africa Discovery Health’s Vitality program gives its insurance
customers incentives to adopt healthy lifestyles. The company
leverages new technologies such as Apple Watches to monitor
how much exercise patients are getting and to reward those
who exercise more. In Mexico Clinicas del Azucar (CdA) has
developed a retail model for providing diabetes care. Under
4
this model, CdA provides patients with care that is close to
home. The company is a heavy user of technology to integrate
all the interventions patients need—from medical care to therapy
and diabetic products. It has helped many of its patients control
their diabetes, improving their health while reducing the risk
of complications that would require expensive hospital care.
Lowering costs through medical products
Private providers can lower the cost of health care by
adopting low-cost approaches to producing equipment
and medication. Prices of HIV/AIDS medications dropped
significantly in the early 2000s when manufacturers of generic
drugs entered the market. Previously such medications cost
thousands of dollars per year, putting them beyond the reach
of all but the wealthiest patients. The first generic company
lowered prices by around 30 percent. As more companies entered,
prices of the generic medication decreased by a further 80
percent.13 By making drugs more affordable, generics manufacturers
helped to save millions of people. Similar to HIV/AIDS medication
in the late 2000s many of the biologic drugs that treat NCDs
are extremely expensive. Biologic drugs are expensive because
they are far more difficult to manufacture than drugs made
through chemical synthesis.14 Companies are developing new
ways to produce biosimilar drugs that will enable the costs of
these drugs to be reduced and enable greater access to treatment.15
The private sector has clear opportunities to make a strong contribution
to improved health outcomes. To unlock the private sector’s full
potential requires support for private sector companies, and
an increased focus from governments, insurers, and multilateral
organization on how to leverage the potential that the private
sector offers.
III. IFC’S INVESTMENTS AND ADVISORY
WORK IN HEALTH
IFC has developed extensive experience—and deep
expertise—investing in health care over the last twenty
years. The organization has invested US$4.3 billion in over 200
projects during that period. Just over the last 10 years, the size
of IFC’s portfolio in health-care services and pharmaceuticals
has doubled—reach US$2 billion. The portfolio is weighted
towards South Asia, Europe and Central Asia, and Latin America
and the Caribbean—with a sizable presence in Sub-Saharan
Africa. IFC is now the largest multilateral investor in healthcare
in developing countries.
A number of IFC’s investments in health have had substantial
impact. In India, IFC played an important role in catalyzing
the development of the nascent sector for private health-care
providers. IFC financed several integrated networks that are
introducing more coordinated health care to the market. In all,
there have been 12 projects totaling more than US$350 million
in commitments. This paved the way for a second generation
of investments in specialized-care providers such as NephroPlus—a
chain of clinics that provides dialysis to patients with chronic
kidney disease (CKD). IFC has also had substantial impact in
pharmaceuticals. In Jordan, IFC supported the growth of Hikma
from a small generics company to regional company with
operations in several countries in the Middle East. This supported
the introduction of affordable medications. Hikma’s generic
medicines are priced at 15 to 45 percent less than equivalent
originator brands.
Upstream reforms have supported increased access to
high-quality health care while laying the groundwork
for future investments. IFC launched the Health in Africa
Program, which is now operated under the World Bank’s Health,
Nutrition, and Population global practice. Health in Africa is a
ground-breaking program to strengthen the private sector in
Sub-Saharan Africa. In Kenya, it established public-private
dialogue through the Kenya Healthcare Federation and helped
reform Kenya’s social health-insurance scheme—the National
Hospital Insurance Fund (NHIF). This helped to ensure that an
additional 3 million patients received coverage from the NHIF.
The program also strengthened the regulatory framework for
private health-care providers. This included a new approach
to inspecting health care facilities and ensuring effective oversight.
Initial indications are that the program has led to substantial
improvements in the quality of care in both public and private
facilities. Health in Africa’s work not only achieved substantial
policy success but it also laid the foundation for IFC to invest
and mobilize more than US$240 million in support of the health-
care sector in East Africa.
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IV. KEY LESSONS AND REMAINING
CHALLENGES
IFC has helped introduce and expand high-quality providers
of health-care services—even in the most challenging
environments. This has included helping to build of hospitals
in some of the world’s poorest countries and supporting providers
that have continued to provide health-care services during
intense conflict. In Yemen, for example, IFC client Saudi German
Hospitals has continued to provide health-care services in Sana’a
despite losing all its foreign staff, difficult financial challenges,
and bombs exploding meters from the hospital building.
It has been difficult to extend high-quality care to low-
income patients at scale. Providing high-quality health care
is inherently expensive. This puts it out of reach of many patients
unless they receive a subsidy or treat publicly insured patients.
In many countries, public subsidies are provided exclusively to
public facilities even though they sometimes charge patients
to use the facilities. This makes it difficult for private health-
care providers to have a sustainable business model for reaching
lower-income patients. This is so even when such providers
are more efficient and responsive to patients’ needs and provide
better clinical quality of care.
Access to high-quality health care can be expanded through
social health-insurance programs that reimburse private
and public sector providers alike. These programs are well
established in countries such as Colombia and Turkey. They
are being introduced or scaled up in South Africa, India, and
other countries. These programs often reimburse both private
and public sector entities, with a focus on ensuring a “level
playing field” between the two. Colombia introduced social
health insurance in 1993. At that time 24 percent of the population
had health coverage. By 2007 more than 80 percent had coverage.
The system relies on the private sector to provide around 60
percent of services, with the public sector providing around 40
percent. Satisfaction with the quality of care is more than 70
percent (across public and private providers).16
Sudden policy changes regarding reimbursement can
undermine the sustainability of business models that rely
on the public sector. In Mexico, SaloUno adopted the approach
of India’s Aravind Eye Hospitals to provide low-cost, high-quality
eye surgery. In doing so, its extended access to sight-restoring
surgery for low-income patients. Initially it did this with the
support from the public sector, but some of this support was
withdrawn, which required the company to raise prices and
reduce its reach.
The limited capacity of governments to manage private
sector contracts can hinder their ability to generate value
for citizens. To ensure that the public interest is protected,
governments must actively manage their contracts with the
private sector. They must monitor performance, manage
challenges in implementing the contract, and ensure that high-
quality care is provided. This can be done relatively effectively—
even in low-income and fragile countries. Afghanistan, for
example, has extended access to health care through contracts
with the private sector. Indications are that contracting with
the private sector extended services more quickly than would
otherwise have been possible,17 and that users rated private
facilities more positively than government ones. 18
IFC’S extensive experience working in countries that
perform poorly on the Human Capital Index suggests
that:
• Supporting providers of basic infrastructure can yield substantial
gains. In the most challenging markets, the health care system
often lacks the basic infrastructure necessary for providing
high-quality care. For example, distributors of medical
equipment seldom provide after-sales services. Many distributors
of medication have weak internal controls which contributes
to the supply of low quality, counterfeit or ineffective medicines
into the market. It does not take significant investment to
help these companies contribute to overcoming these gaps,
but the impact of the investment can be substantial.
• Supporting providers that deliver high-quality care at relatively
low cost can be effective. IFC has supported the development
of low-cost, high-quality providers and manufacturers. Many
of these companies are developing their business models in
middle-income countries. India, for example, is home to many
of the world’s lowest-cost providers of health-care services.
Many of these companies are now investing in new facilities
in the poorest countries—those eligible to borrow from the
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International Development Association (IDA)—and in fragile
and conflict-affected countries in Sub-Saharan Africa and
the Middle East. An example is India’s HealthCare Global
(HCG), a provider of oncology services that has expanded
to several countries in East Africa and is now expanding
into a fragile and conflict-affected area in the Middle East.
• Targeted investments can help manufacturers of key vaccines and
drugs extend their reach into low-income countries. Many of the
largest gains in low-income countries have been achieved
by expanding access to drugs and vaccines. An important
contribution that IFC can make is to support the development
of competitive markets for these products globally and support
their introduction into developing countries. A recent IFC
project supported a vaccine producer that will be one of the
first entrants into the market for the Pneumococcal Conjugate
Vaccine “PCV” (which protects against pneumococcal bacteria)
and Hexavalent vaccine (which protects against diphtheria,
tetanus, acellular pertussis, haemophilus influenzae type B,
poliovirus, and hepatitis). This company’s entry is expected
to substantially lower prices, reducing the cost of providing
these medications to some of the lowest-income children
in the world including in countries such as Yemen and South
Sudan.
• Donors could be key to the introduction of viable private sector
solutions in low-income and fragile and conflict-affected areas.
In these areas, donors are an important source of funding
for health services. But they often have short budget time
frames, which makes it difficult for private providers to
establish sustainable business models based on revenue from
donors. To overcome these problems donors will need to
make longer term commitments to providers to make it
easier for them to access external financing.
Remaining challenges
Many countries that perform poorly on the Human Capital
Index can make progress by harnessing the potential of
the private sector. Innovative, high-quality private sector
providers of health-care services are an important source of
improved performance in many health-care systems. But they
need support to reach the broader population. Pharmaceutical
companies, medical-equipment manufacturers, and distributors
can play a key role in lowering the cost of health care and
improving quality. To take full advantage of the private sector’s
potential, governments need to develop the capacity to integrate
the private sector into their systems.
The World Bank Group can play an important role in helping
governments to harness the private sector’s full potential.
This will require support for governments to strengthen their
ability to be effective stewards over the whole system, appropriate
regulation, and increased capability to procure services effectively.
V. LOOKING INTO THE FUTURE
Upstream reform—building the foundation for private
sector solutions—will be a particular focus of IFC going
forward, under the new IFC 3.0 strategy. This will entail a
system of decision-making known as The Cascade to maximize
finance for development. The aim of this approach is to strengthen
the private sector’s contribution to health-care systems through:
1. Investments, with a continued focus on health-care services
and pharmaceutical investments. Over the medium term,
IFC’s intention is to increase investments in medical equipment.
The focus is on investing in businesses that can make a
substantial contribution to addressing health challenges in
developing countries. This includes pharmaceutical companies
that are lowering the cost of biosimilar medications, medical-
equipment companies that are pioneering innovative or
low-cost solutions, integrated health-care providers, and
companies that are introducing new technologies or taking
advantage of technology to lower costs and improve outcomes.
2. Capacity-building, focused in three areas. The first is
promoting public-private partnerships (PPPs). The second
involves initiatives to introduce high-impact technologies
to public and private facilities through the TechEmerge
program. The TechEmerge program facilitates the introduction
of technologies to healthcare providers that improve outcomes.
The third involves interventions to strengthen the quality of
care. IFC has developed a Hospital Quality Tool that will be
used to provide advisory services. The tool helps facilities
take the first steps toward improving their systems and
7
processes to ensure that they provide excellent quality care.
This includes ensuring safe and effective care. Over the last
couple of years IFC developed a set of ethical principles to
help guide the behavior of health-care organizations. IFC
has started to roll them out with eighteen providers adopting
the principles so far.
3. Blended finance, where the focus is on building scalable,
economically viable private sector solutions for low-income
patients through the use of concessional funds. This includes
using the IDA Private Sector Window (PSW), and the Global
Finance Facility for Women, Children and Adolescents (GFF)
whose secretariat is housed within the WB. IFC has established
a partnership with the GFF to support viable private sector
solutions across GFF countries in line with the GFF priorities
and investment cases. The GFF Secretariat and IFC have
been building a pipeline of investments and interventions
to facilitate access to finance for health SMEs, scaling of
innovative low cost business models and facilitation of effective
private partnerships; all of which aim to address significant
healthcare gaps especially for under served populations.
4. Promoting private sector solutions through work with
the World Bank’s Health, Nutrition, and Population
Global Practice. The HNP GP is well positioned to:
• Help countries leverage the private sector. This includes work
to extend social health insurance, and effectively include
private sector providers in these programs. The HNP GP
is also well positioned to work on initiatives to make
donor funding more consistent in IDA countries and so
support investments by the private sector. There is substantial
potential to work jointly on PPPs. This includes improving
the legal and regulatory environment, supporting capacity-
building, and implementing PPP transactions. IFC and
the World Bank are also well positioned to work closely
on extending the TechEmerge to the public sector.
• Work jointly with IFC on regulatory reform. This includes
advising governments on the implementation of regulatory
reforms to strengthen the enabling environment for
providing high-quality health services. There is also potential
to work jointly on initiatives to strengthen the regulation
of pharmaceutical products.
The private sector holds significant potential to contribute
to better health outcomes. By working jointly with the World
Bank, IFC has an important role to play in ensuring that this
potential is fully realized.
FREQUENTLY ASKED QUESTIONS
What do Maximizing Finance for Development (MFD)
and the Cascade mean in health?
In the health sector the MFD/Cascade approach aims to unlock
the contribution that the private sector can make to the
performance of health-care system. This thematic brief argues
that the private sector can make an important contribution to
achieving SDG 3—“Ensure healthy lives and promote well-being
for all at all ages”—and Universal Health Coverage (UHC).
Although the private sector does have an important contribution
to make, the public sector is ultimately responsible for the
stewardship of a country’s health system and sets overall policy.
This is particularly important in health care because health is
often a public good—subject to information asymmetries that
involve important ethical considerations in how care is provided
and paid for.
The World Bank Group’s analytical approach to MFD/Cascade
in health follows four steps. (i) The first prioritizes private investment
in providing services and products that help achieve development
goals while providing value for money and meeting the highest
environmental, social, governance (ESG) and fiscal responsibility
standards. Where private solutions are not feasible or desirable
because of regulatory, policy, or capacity gaps, the second step
is considered—whether there is (ii) need for interventions to
create the enabling environment for investment. This considers
areas such as regulatory obstacles to investment that will make
a positive contribution to the health-care system, the quality
regime, and reforms to promote approaches to work with
private sector through public private partnerships and similar.
Where risks remain high and raise the cost of private capital
beyond that afforded by project or corporate revenue generation,
the priority will be to consider the third step—(iii) apply public
resources to reduce risks through blended finance and guarantees.
Where private solutions are not viable or appropriate despite
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sector reform and risk mitigation, the fourth step is considered—
(iv) this entails allocating public financing using mechanisms
such as public expenditure and social health insurance. Although
the Cascade is conceptualized as a four-step process, in many
countries, work will be needed along all four steps.
IFC is implementing the MFD/Cascade approach in health by
working closely across the World Bank Group, as well as with
other development partners. Much of this work is occurring
under the Human Capital Project.
What is IFC’s Quality Assessment Tool?
IFC has developed the Quality Tool to help clients improve
patient safety and align with current best practices. IFC aims
to expand the impact of the Quality Tool by offering clients a
new advisory “full service” suite of products that can support
those using the Tool each step of the way toward improved
quality and other associated services (for example, process
improvement). The purpose of the Quality Tool is to help hospitals
or clinics take steps to improve quality and embed quality into
the culture of the organization. When recommendations from
the Tool are implemented, clients can achieve better patient
safety, clinical quality, and care outcomes. The Tool has been
designed specifically for hospitals and clinics in emerging markets.
By using the Tool, clients will be better prepared to eventually
pursue one or more of the existing national or international
health-care accreditations. The Healthcare Quality Assessment
Tool evaluates facilities across eight key areas, (i) international
patient safety goals, (ii) ethics, patient and family rights, (iii)
medication management and use, (iv) quality improvement
and patient safety, (v) infections, (vi) governance, leadership
and direction, (vii) facility management and safety, and (viii)
human resources. Across these eight areas 34 performance
standards are evaluated using 154 measurable elements. On
the basis of the review of the hospitals systems, the hospital’s
performance is determined and recommendations provided.
IFC has developed a set of principles, called Ethical Principles
in Health Care (EPIHC). These promote ethical behavior and
help health-care service providers make informed decisions.
EPIHC is a Code of Conduct made up of 10 concise, pragmatic
and widely applicable principles that apply to the provision of
private health care services. They were developed through a
wide ranging consultative process, and were developed in close
collaboration with the Health, Nutrition, and Population Global
Practice of the World Bank. The principles are accompanied by
guidance on how to interpret and implement the principles.
The principles are used to guide ethical practice expectations
and decision-making; rather than enforce institutional norms
and performance standards. The initiative to develop EPIHC
was launched due to the importance of ethical considerations
in the provision of health-care services, and health financing.
Ethical considerations are particularly important in the health
sector because of widespread information asymmetries in the
provision of health care, and associated issues of moral hazard
western standards of care, retraining doctors, rolling out evidence-
based protocols across its network of hospitals and polyclinics,
and transforming quality in labs and pharmacies. This accelerates
the timetable under which the government can bring high-
quality health care services to communities.
The partnership has accelerated access to life-saving treatments
that reaches 75 percent of the country. From January 2017 to
June 2018, there were approximately 375,000 patient visits to
GHG hospitals and there were 3.2 million patient visits at GHG
polyclinics.
Saudi German Hospital (SGH) Group

and adverse selection. The principles were launched in 2019

Since 2007, IFC has supported the regional expansion of Saudi
with a set of 18 early adopters to the principles. IFC is now
German Hospitals (SGH) with two investments consisting of
working to roll out the principles globally. This includes publicizing
loans and equity totaling US$75 million for the construction
the principles, working to sign up additional adopters of the
and equipping of two multi-specialty hospitals, each with 300
principles, and developing a community of organizations that
beds in Cairo, Egypt; and Sana’a, Yemen. Operating a hospital
are interested in supporting the spread of the ethical practices
in war-ravaged Yemen is an exceptionally challenging endeavor,
in health care, including through further development of the
yet SGH continues to persevere in providing life-saving
principles.
treatments—despite aerial bombs, fuel shortages and lack of
medical supplies. Their hospital is the only one built with foreign
ANNEX 1. PROJECTS OF NOTE investment in Yemen still open.

In highly fragmented and underdeveloped markets, the SGH

Georgia Healthcare Group (GHG)
In September 2016, IFC invested US$25 million in Georgia
Healthcare Group (GHG) through a combination of debt and
equity investments. IFC’s financing was used to fund the overhaul
of Soviet-era hospitals and polyclinics that GHG purchased
including upgrading these facilities and introducing new standards
of care and services.
For years, Georgia struggled with high rates of mortality, ailing
infrastructure, poorly trained doctors and below average quality
of care that was expensive. In 2013, the government introduced
basic Universal Health Coverage (UHC) but with a twist—it
was paid for by the government but implemented by the private
sector. The model is a win-win. Government can keep labor,
pensions, and infrastructure costs off the national balance sheet.
GHG has a lighter bureaucracy and can deliver rapid results—
it can overhaul hospitals in two to three years. GHG is adapting
network has leveraged its scale to establish tertiary level hospitals
in the MENA region. It owns 10 hospitals with about 2,500
beds in Saudi Arabia, the United Arab Emirates, Egypt, and
Yemen. It employs more than 7,400 employees, of whom 3,000
are women. It is currently expanding into Morocco and Pakistan.
In 2017, SGH Group treated nearly 1.8 million patients, of which
70,000 were inpatient. Since 2006, the hospital in Yemen has
treated over one million patients, while since 2016 the hospital
in Cairo has treated nearly half a million patients. Its vision is
to be the most trusted health-care provider in the MENA region
through the delivery of high-quality care that is backed by Joint
Commission International (JCI) accreditations.

9
Rede D’Or
Since 2010, IFC has provided four loans totaling US$230 million
and mobilized an additional US$285 million from third-party
lenders for Rede D’Or (RDOR). This is helping the company
expand its network of high-quality tertiary hospitals. This
funding aided the company in becoming the largest private
hospital operator in Brazil. With 37 hospitals and 5,200 beds,
RDOR offers a wide range of services.
Through its network, the Brazil’s leading provider of cancer-
related health services can deliver to large numbers of middle-
and lower-income people the quality of oncology care that
was previously only available to wealthy Brazilians. Together
with insurance companies, RDOR has helped to control the
growing cost of health care and expanded access to quality
hospital services to a broader segment of Brazilian society,
including lower-income workers, such as nurses, industrial
workers, and administrative staff.
The availability of health insurance has boosted patient volumes.
In 2016, RDOR’s emergency rooms attended to 3.35 million
patients. The network delivers quality care through a cadre of
40,000 employees, of which about 75 percent are female.
hospital expertise closer to the home. As of March 2017, the
group had about 400 centers and served nearly 1.3 million
patients that year.
Global Health Investment Fund (GHIF)
In 2013, IFC invested US$10 million of equity in the Global Health
Investment Fund (GHIF). The Bill and Melinda Gates Foundation
(BMGF) sponsored GHIF as a novel social impact fund to finance
the development of drugs, vaccines, and diagnostic tests for
diseases that disproportionately burden low and middle-income
countries.
Infectious diseases remain serious health concerns in emerging
markets. In Sub-Saharan Africa alone, communicable diseases
represent a majority of the disease burden with millions losing
their lives annually. These diseases tend to affect vulnerable
populations where there is limited capacity to pay for treatment.
The BMGF and its partners including IFC believed it could be
possible to address neglected diseases while generating reasonable
financial returns. IFC’s involvement enabled GHIF to attract
other investors and surpass its funding target. GHIF was able
to attract a diversified group of investors, allowing it to raise
US$108 million of capital.

Apollo Health and Lifestyle (AHLL) GHIF’s investments are helping to end a global shortage of
cholera vaccines. It is enabling development and manufacture
In 2016, IFC and IFC’s Asset Management Company took an
of treatments for diseases such as river blindness.. It is enabling
equity stake of US$67 million in Apollo Health and Lifestyle
cheaper, more effective diagnostic tests for tuberculosis, HIV,
(AHLL)the Indian healthcare provider to help it grow the network
malaria, dengue, preeclampsia, gestational diabetes while
in locations that are closer to where patients live. This marks
providing more accurate results and reducing healthcare costs.
IFC’s fifth investment in the Apollo Group over the last 20 years.
As of 2019 it is projected that the investments that GHIF has
Apollo and IFC have partnered on other investments totaling
made has the potential by 2025 to improve 6 million lives and
nearly US$190 million in equity and loans.
save over 100,000 lives per year.

Apollo has created a “continuum of care” available through its

integrated care network to save patients’ lives. The model Fybeca
connects Apollo’s hospitals and its community-based centers.
In 2016, IFC approved a US$30 million investment in Fybeca to
The model allows it to shift lower-cost care into neighborhoods
help this Ecuadorian company grow its network of ‘SanaSana’
through a chain of clinics, outpatient surgery centers, diagnostic
retail pharmacy stores that cater to low-income and underserved
centers, women’s and neonatal specialty hospitals, diabetes
rural populations. Recognizing that such customers have more
clinics, and dialysis centers. Apollo Clinics now constitutes
limited financial means, these stores permit them to buy pills
India’s largest chain of primary-care clinics operated by the
in individual units rather than having to fill a prescription’s
private sector, and it plays a major role in bringing Apollo’s

10
worth. A family-owned business since its foundation in 1930, TechEmerge
Fybeca has expanded to 580 stores. IFC’s investment will enable
TechEmerge, a World Bank Group initiative led by the IFC, is a
it to overhaul its stock control system, including by introducing
first of its kind matchmaking program for proven technology
a centralized robotically operated warehouse that will reduce
companies around the world that are looking to grow their
the cost of distribution, and enable the firm to stock a wider
business in emerging markets. The objective is to bring technologies
range of stock keeping units.
to new markets, and spur sustainable innovation. The India
program led to 17 innovators being successfully matched with
NephroPlus
15 providers, to implement 22 pilot projects as a first step to

IFC invested US$7 million in NephroPlus series-B round of building long-term partnerships. The program has been introduced

financing in 2014. The investment will be used by NephroPlus to Brazil and is now being taken to East Africa, where the aim

to expand its network of dialysis centers in India. In India, demand is to also provide this service to the public sector.

for dialysis is growing 31 percent a year as diabetes and

hypertension rates soar. For its first venture capital investment
in health care in South Asia, IFC chose NephroPlus, a company
that specializes in providing kidney dialysis and transplants.
NephroPlus charges 30-40 percent below the average market
price for dialysis services. It has 75 centers in 50 cities and is
expanding rapidly.

11
ANNEX 2. SNAPSHOT OF IFC’S
COMMITTED PORTFOLIO IN HEALTH

Overall, IFC’s committed portfolio as of end-FY18 totaled more

than US$2 billion in own account committed portfolio, with
$0.4 billion mobilized.

% FY19 own IFC own-account Mobilization

account committed (US$ millions)
committed portfolio
Industry Group Sector Level 3 portfolio (US$ millions)

Integrated Health Services 42% 905 214

Diagnostic Services 2% 40 0

Other Health Services 2% 53 0

Pharmaceuticals and Medicine 38% 814 60

Manufacturing

Pharmaceuticals and Medicine 8% 166 0

Distribution

MedTech Manufacturing 4% 92 0

MedTech Distribution 3% 70 0

ANNEX 3. ADDITIONAL REFERENCES

• IFC’s Health and Education website which includes a number of case studies

• Inclusive Business Case studies which discusses a number of health projects

• IFC Quality Tool

• TechEmerge

• IFC’s biennial Health Conference

12
END NOTES
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3 Kraay, A, 2018 “Methodology for a World Bank Human Capital
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4 Bloom, D. Canning, D and Sevilla, J “The effect of health on
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5 Bloom, D, Khoury, A, Subbaraman, R 2018 “The promise and peril
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6 WHO, 2015 “Measles vaccination has saved an estimated 17.1
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7 WHO, 2018 “Maternal Mortality”
8 Nicolai, S, Hoy, C, Berliner, T, Aedy, T, 2015 “Projecting progress,
Reaching the SDGs by 2030” ODI Development Progress”
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9 Page S-2, The National Academies of Sciences, Engineering,
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11 Wagstaff, A., Flores, G., Hsu J., Smitz, M-F., Chepynoga, K.,
Buisman, L.R., van Wilgenburg, K. and Eozenou, P., 2018 “Progress
on catastrophic health spending in 133 countries: a retrospective
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e169-e179
12 Leahy, M “Case Study Aravind Eye Care: Contribution to global
capacity building of eye care personnel” Busines Call To Action
[www.businesscalltoaction.org]
13 Hoen, E, Jonathan Berger, J Calmy, A and Moon, S, 2011 “Driving a
decade of change: HIV/AIDS, patents and access to medicines for
all” Journal of the International AIDS Society 2011, 14:15
14 Economist, 2014 “Pharmaceuticals, Going Large”
15 Singer. E 2011 “Why is Biomanufacturing so hard?” MIT
Technology Review
16 Giedion, U and Uribe, M 2009 “Colombia’s universal health
insurance system” Health Affairs (Millwood), 28 (2009), pp.
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17 Palmer, N 2006 “Contracting out health services in fragile states”
BMJ 2006; 332 doi: (Published 23 March 2006)
18 Cockcroft, A Khan, A, Ansari, N, Omer, K, Hamel, C, and
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Health Services Research 2011, 11(Suppl 2):S11

Contributors

This brief was prepared by Andrew Myburgh (Senior Economist, CSEMA), Chris McCahan (Chief Investment Officer, CMGCS)
and Charles Dalton (Senior Health Specialist, CMGCS). Inputs are gratefully acknowledged from Ann Casanova (Consultant,
CMGCS), Juliana Cristina Da Silva Alves (Investment Analyst, CMGCS), and Chen Li (Associate Investment Officer, CMGCS).
It was reviewed and cleared by Tomasz Telma (Senior Director, CMGDR), Elena Sterlin (Senior Manager of Health and
Education, CMGCS), and Philip Schellekens (Senior Economic Advisor to the Office of the CEO, CEDVP).

Inquiries

Please contact: Chris McCahan, cmccahan@ifc.org, (202) 458-9641, Charles Dalton, CDalton@ifc.org, (202) 473-7236 or
Andrew Myburgh, amyburgh@ifc.org (202) 458 8395

Thematic Brief Series

1. Gender Business 2. Climate Business 3. Disruption in Power 4. Edtech 5. Digital Infrastructure 6. Fintech
7. Environmental, Social, and Governance (ESG) 8. Driving Innovation in Health Care 9. Investing in Low-Income IDA
and FCS 10. Cities 11. Insurtech 12. Agtech 13. Mining and Sustainable Development 14. Urban Water and Sanitation
15. Biopharma

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