Healthcare Value Chain

The value chain of for healthcare is very similar yet different from other industries. It is similar
as it includes manufacturers of equipment and pharmaceuticals, wholesalers and distributors of
equipment and drugs, health care providers (hospitals), health care professionals (doctors and
nurses), and consumers and payers (patients, Government and insurance companies).

The health care value chain differs from other industries as all the players in the value chain can
segregated into three main institutions. These institutions include Educational Institutes,
Healthcare delivery institutions and Supporting Institutes for healthcare delivery. The primary
role of educational institutes is to provide skilled human resource and professionals to Healthcare
delivery institutions. These institutes include Medical colleges for supply of trained doctors,
nursing colleges for supply of supporting and nursing staff and para medics training institutes for
training of paramedic staff.

Just like Educational Institutes, the Supporting Institutes serve the role of suppliers of services
and products such as diagnostic services and pharmaceuticals to the Healthcare Delivery
Institutes. These institutes include insurance companies which provide financial services
specifically to private patients, diagnostic companies which provide diagnostic facilities for
patients of both public and private healthcare delivery institutes. Pharmaceutical companies,
ambulance organizations and equipment manufacturers who are responsible for all kind of
equipment used in healthcare delivery institutions

The Healthcare Delivery Institutes are at the forefront of healthcare value chain and are
responsible for directly handling patients and delivering value to them. The Healthcare delivery
institutes are divided into Public and Private sector institutions. In Pakistan, the public sector
institutes are further divided into primary, secondary and tertiary healthcare institutes. At the
primary level there are Basic Health Units (BHUs) and Rural Health Units (RHUs). Whereas,
secondary and tertiary level facilities are available at Tehsil Head Quarter Hospitals (THQs) and
District Headquarter Hospitals (DHQs). Similarly the private sector healthcare delivery institutes
can be further divided according to the size of facility. Private sector institutes are divided into
private clinics which provide primary level care to the patients, whereas small and medium and
large size hospitals provide both secondary and tertiary level care to the patients. Furthermore
public and private sector healthcare institutes are also segregated in terms of payers of the
services. In Public sector health institutes, all the expenses except for diagnostics are paid for by
the government, whereas in Private sector institutes all expensed are handled by the patients or
the insurance companies.

The most important player in Healthcare value chain is the Government, since there are many
level of government involved in healthcare delivery and policy making. Furthermore, the
government is responsible for Healthcare budget allocation and effective utilization of the
healthcare budget. Similarly the Government also regulates the entire healthcare sector including
the educational and supporting institutions and hence has an important role in the healthcare
value chain.

MARKET
PLAYERS Worker/employee
SUPPORT FUNCTIONS membership
Government Insurance Companies organizations
R&D
Punjab Health Dept. Information YDA, PNC
Educational Institutes Diagnostic Services

Infrastructure Equipment
Suppliers
Informing & Communicating

Informal Sourcing Marketing Health

Networks Delivery Private Sector

Setting & Enforcing Rules

Regulations Informal rules
& norms

Not- for-profit Standards Laws Business membership

Sector organizations
Edhi RULES & REGULATIONS Pharmacy Council of
Pakistan