TERMS OF REFERE CE HEALTH CARE I SECO D TIER CITIES A D RURAL I DIA

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1 TERMS OF REFERE CE HEALTH CARE I SECO D TIER CITIES A D RURAL I DIA 1 Background and introduction Who are we? The International Finance Corporation (IFC) with the support of the Government of Netherlands have come together to focus on the role of the private sector in the financing and provision of health services for the poor in second tier cities and in rural India and to develop an agenda for action for its improvement. We are seeking to engage a consultant/consultancy firm ( consultant ) to assist us in this exercise. International Finance Corporation IFC is a member of the World Bank Group. Its mission is to promote sustainable private sector investment in developing countries in order to reduce poverty and improve people s lives. It does this by: financing private sector projects located in the developing world; helping private companies in the developing world to access finance; and providing advice and technical assistance to businesses and governments. IFC employs 3,134 people based at its headquarters in Washington DC and throughout its offices worldwide located mainly in developing countries. In 2007, IFC committed US$8.2 billion and mobilized an additional US$3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. Context There is a strong demand for quality health care as the income of Indians is rising. According to a 2007 Health care in India Emerging Market Report conducted by PricewaterhouseCoopers, health care is one of India s largest sectors, in terms of revenue and employment, and the sector is expanding rapidly. During the 1990s, Indian health care grew at a compound annual rate of 16%. In 2007, the total value of the sector was over US$34 billion or approximately 6% of GDP. By 2012, India s health care sector is projected to grow to nearly US$40 billion. The private sector accounts for more than 80% of total health care spending in India. Demand is expected to be more pronounced if a sustainable health insurance sector evolves, as is expected once more favorable regulations are introduced. To date, most health care providers are located in tier one cities. The Indian health care sector presents substantial opportunity for private sector providers of health care. The existing supply and infrastructure for health care in the private sector is not sufficient to satisfy existing demand which continues to grow. Furthermore, incomes are rising and demand is growing as is the ability to pay for private health care, which accounts for 75% of health care spending. 1

2 India s National Health Policy of 2002 welcomes the participation of the private sector in all areas of health activities primary, secondary or tertiary. It envisages the enactment of suitable legislation for regulating minimum infrastructure and quality standards in clinical establishments/medical institutions as well as encourages the set up of private insurance instruments to increase the scope of the coverage of the secondary and tertiary sector under health insurance packages. Amongst other factors, India s health infrastructure needs to be improved significantly to meet demand for health care. IFC is already actively involved in health care projects in Delhi and its vicinity. Nevertheless, significant growth potential is expected to be in tier two cities. Given IFC s mission and the significant role of the private sector identified above, we believe that there is an onus on IFC to take a lead role in determining a strategy for the improvement of health care provision in India. To that end, the Health and Education department of IFC, with the support of the Government of Netherlands, proposes to develop new mechanisms aimed at improving the financing and provision of health services in India. 2 The Project Our goal / Purpose of this project The ultimate purpose of this project is to help improve access to health for the people of India earning an income of less than US$5 a day by stimulating sustainable private sector development in the sectors dealing with the financing and provision of health services. The objective of this technical assistance is to conduct a survey of private health care providers in tier two cities and rural India to profile these providers and their expansion viability as well as determine the extent of the increase in demand for their services in the future. Based on the consultant s findings and recommendations, IFC anticipates providing advisory services to identified providers eligible for expansion by developing tailored business plans to secure access to finance, thereby enabling businesses to provide more affordable and accessible health care to a broader spectrum of the population. IFC is gaining further momentum in expanding the breadth of its investment activities in the health care sector in India. By identifying companies and facilities in tier two cities and rural areas in need of financing for further expansion, IFC will play an important role in helping improve access to health facilities in these cities and in the rural areas which do not attract the same level of investment as tier one cities. Outputs and deliverables The appointed consultant will conduct a study of health care infrastructure and facilities in as many geographically dispersed tier two cities and surrounding rural areas (within radius of 300km) in India as feasible, given the budgetary constraints, which will result in the production of a comprehensive report. The report should include at least one city per state from the following list of tier two cities: Vijayawada, Visakhapatnam, Tirupati, Waranga, Kakinada, Guhawati, Patna, Ahmedabad, Rajkot, Surat, Vadodara, Faridabad, Dhanbad, Jamshedpur, Mysore, Mangalore, Kochi, Bhopal, Indore, Jabalpur, Aurangabad, Nagpur, Nashik, Pune, Bhubaneswar, Amritsar, Ludhiana, Jaipur, Coimbatore, Madurai, Agra, Allahabad, Kanpur, Lucknow, Meerut, Varanasi, Siliguri, Haldia, Asansol, Chandigarth Tricity. 2

3 The analysis would involve the following: 1. Assess the current supply and demand for health care services; 2. Identify whether there is sufficient demand for expansion for private health care sector and pipeline of potential projects and initiatives feasible for IFC s intervention; 3. Identify constraints and key risks for expansion of the private health care sector. How are these barriers most effectively removed and how can private sector investment in the financing and provision of health services be encouraged? (e.g. what could/should governments and regulators do? what could/should development organizations do? what could/should the local entrepreneurs and financiers do?); 4. Provide examples of business models that work or are commercially viable; 5. Prepare a list of successful private healthcare providers, map their growth over the last three years. Select and identify at least 15 private healthcare providers with high growth potential for work in phase 2 of the project 6. Assess current financing available and identify financing needs for those health care providers and key gaps between the financing needs and availability; and 7. Assess risks for investments (e.g. reputational, regulatory issues, both industryspecific and non-specific, including policies that govern opening new businesses, supply chains, and availability of human resources). This output will focus on the role IFC should play in improving the financing and advisory services for the provision of health services in India. Approach We would expect the consultant to consult extensively with stakeholders. Stakeholders should include, but not be limited to: Existing private organizations and individuals engaged in health in India; Organizations which could potentially play a role in health in India, either based in India or elsewhere; Relevant government officials and policymakers; Development organizations including IFC, World Bank and other relevant donor organizations; Providers of finance for example local banks, charitable funds, etc. We would expect significant in-country work in India in the locations referenced above as well as in rural areas. The consultant will also work closely with our IFC office representatives based in Washington D.C. and in India. Overview As outlined above, IFC is looking to engage the services of a leading financial services and strategy consulting firm to assist them in improving the health of the peoples of India. With this in mind, we are requesting proposals from a small number of suitably qualified and credentialed consultants. Consortia involving organizations based in India are strongly encouraged. 3

4 3 Consultant profile The winning consultant/consortium will demonstrate the following characteristics: A strong understanding of the goals and objectives of IFC; A willingness to work with IFC to disseminate the findings of the research and analysis undertaken; Demonstrable and meaningful experience in the health sector in developing countries (both financing and service provision), international development, and financial services sectors; A study methodology that is consistent with the timing and budgetary constraints outlined in this document and that will deliver the desired outcomes; A willingness, given the nature of the objectives of this project, to provide a value-formoney proposal; and The capacity to work in English and local Indian language(s) a plus. Alliances with India-based organizations are strongly encouraged. Local participation (as reflected by nationals among key staff presented by foreign and local firms) is encouraged. The consultant must first specify the consultancy firm it intends to enter into a joint venture and obtain written approval from the IFC. Firms entering into a joint venture are not required to provide their joint venture agreement when they submit their proposal, but must have a letter of intent indicating their intent to form a joint venture if awarded the contract. 4

5 4 Timetable The process and timetable for the selection of the consultant will be as follows: December 1, 2008: Release of Request for Proposals to consultants; By December 15, 2008: Consultants may request further clarifications on the RFP from Therese Fergo by communicating via electronic mail to IFC will respond by and will send written copies of the response (including an explanation of the query but without identifying the source of the inquiry) to all invited consultants who intend to submit proposals. At anytime before the submission of proposal, IFC may, for any reason, whether at its own initiative or in response to a clarification requested by an invited firm, amend the RFP. Any amendment shall be issued in writing through addenda, which shall be sent by electronic mail to all invited consultants and will be binding on them. IFC may at its discretion extend the deadline for the submission of proposals. December 22, 2008: Submissions due by 5:00pm Washington, D.C. (USA) time. Technical and financial proposals must be marked as Health Care in Second Tier and Rural India and be delivered electronically (by ) to Therese Fergo, Projects Officer at tfergo@ifc.org and to Sushanta Kumar Pal, Business Development Officer, at spal1@ifc.org By January 9, 2009: IFC will review submitted proposals and may invite the short-listed consultant to make a presentation to a selection panel. By January 16, 2009: Shortlisted consultants will present, if so requested, via teleconference call organized by a local IFC office, their proposals to the selection panel. By January 30, 2009: Selection of successful consultant and remaining consultants are notified of selection. Contract is negotiated and awarded. February 27, 2009: Assignment is expected to commence - kick off meeting in New Delhi. February 27 May 26, 2009: Research and analysis is conducted by consultant. May 26, 2009: Draft report is submitted to IFC for review. May 26-June 2, 2009: IFC provides feed-back to consultant. June 22, 2009: Final report is submitted to IFC. 5

6 5 Remuneration Remuneration: Payments shall be made according to the following schedule, and will be subject to quality clearance by the IFC Task Manager: 10% Upon signing of the contract and commencement of work. 40% Upon submission of draft report and subsequent approval of IFC s designated Client Authorized Representative. 40% Upon submission of final report and subsequent approval of IFC s designated Client Authorized Representative. 10% Upon IFC s receipt and acceptance of deliverables. This amount has been established based on the understanding that it includes all of the Firm s costs and profits as well as any tax obligation that may be imposed on the Firm. Reimbursable and Miscellaneous Expenses: For Reimbursable and miscellaneous expenses, the Consultant will be reimbursed all expenses proposed in the financial proposal at actual upon submission of invoices, original receipts, or other appropriate documentary evidence of expenses. Payment Conditions: Payment shall be made in (to be discussed during negotiation), no later than thirty (30) days after submission of invoice by the Consultants to IFC Task Manager. The invoice must bear Contract number, Consultant s vendor number, Consultant s Bank Account details, Invoice Reference Number, and Payment Description and amount, etc. Invoice must be printed in Consultant s company letterhead and be signed by the Consultant s authorized person. 6