How investors can tackle emerging market workforce issues
HBI reports this week that the number of NHS England dentists had dropped significantly after the pandemic. The government’s solution is, unsurprisingly, to encourage dentists from emerging markets to immigrate. This has been thematic of late, short of doctors or nurses? Ship them in. However, this can often leave the country of origin with a brain drain – and discourage investors who might otherwise buy a hospital group in that country.
Emerging market hospital groups are very in vogue for PE firms at the moment. In richer countries they have safe, established hospital groups in politically stable countries with high purchasing power, but they also have very stagnant growth and highly consolidated markets where competition authorities can scupper deals. Emerging market hospitals are a better bet for growth, but have even worse workforce problems.
So how can this issue be solved? It’s not easy. High wages and a promise of a better lifestyle are of course alluring to clinicians wanting to make the most of their talents. An obvious solution is to build up training capacities within emerging markets to ensure hospital groups have their own supply of trainees who can meet their standards of quality. But what’s to stop those trainees from moving to a richer country as soon as they’re qualified? With the expense of training, hospital groups are wise to put a mandatory time trainees must spend in their employ, lest large countries reap the benefits of quality training at their expense.
The situation is not completely hopeless. Workforce is actually one of the few emerging market risks foreign investors can have some influence over. While they can’t tackle governance and stability issues, they can take steps towards ensuring they have the high-quality staff they require to meet patient needs. Doing so will help them leverage the high yields emerging markets promise.
We would welcome your thoughts on this story. Email your views to Joe Quiruga or call 0207 183 3779.
