Where do we build the next one?

Where should Meridian build its next hospital, so that it does the most good for the people who live around it and also returns a profit to the people who funded it? The board’s early leaning is Nigeria, on a health tourism argument.

A complete answer names a jurisdiction and a city, a service configuration, and a staffing strategy, and it shows how those three follow from one another rather than being chosen separately. It does not need to name a parcel, a bed count or a capital figure. Those belong to the next gate and inventing them now would be false precision.

What the answer may not do is treat the profit goal as something to be apologised for or left unstated. Meridian is a for-profit company and its purpose is to return a profit to the people who put up the capital. An objective nobody names is an objective nobody can examine, and the only interesting question here is whether serving the patient better and returning a profit are genuinely in conflict or only appear to be.

So: Nigeria, on a health tourism argument. It is worth taking seriously, and it is worth being precise about, because the phrase "health tourism" is doing something misleading here.

Health tourism normally means attracting foreign patients to a country because care there is cheaper or faster. Building for that means optimising for international accreditation, an airport, hotel-grade amenity and a small set of elective procedures for people who do not live there. It is a real business. It is also a business that competes directly with Bangkok, Istanbul, Dubai and Delhi, on their terms, from a standing start, and it has very little to do with the people who live around the hospital.

The Nigerian opportunity is the other direction, and it is much better. Nigerians already spend enormous sums on care abroad. Official figures put it above a billion dollars a year. The money is not a projection to be argued over: it is already leaving, every year, and it is concentrated in four specialties. Roughly 60% of it goes on oncology, orthopaedics, nephrology and cardiology.

That changes the proposition entirely. Meridian would not be persuading strangers to fly in. It would be giving Nigerians who currently fly out a reason to stay, which means the paying customer and the catchment are the same population. The demand is proven by revealed preference rather than by a market study, the specialties to build are named by where the money already goes, and every patient treated in Lagos rather than Delhi is both revenue for Meridian and a family that did not have to leave the country to get care.

The need is not in question either. Nigeria has roughly 0.9 hospital beds per thousand people against 2.44 in the United Kingdom, and below the WHO reference level of about 2.3. And this is where the case for building there stops being a marketing argument and starts being a real one, because a hospital that captures the outflow is import substitution rather than tourism, and import substitution builds capability in the place it happens.

One caution belongs here, and it follows directly from the horizon chapter. A facility built to serve patients who currently fly to London will be priced for people who could afford to fly to London. That is a genuine business, but it is not by itself impact on the catchment. Whether the rest of the population sees any benefit depends entirely on what the hospital does to the supply of clinicians around it, which is the subject of the next chapter and the thing that actually decides this.

Meridian has capital and a proven demand signal. Neither is the binding constraint, and mistaking them for it is how this decision goes wrong.

Nigeria has roughly 55,000 doctors practising for a population above 200 million, somewhere near one for every 3,600 to 4,000 people. Around 16,000 doctors have left in the past five years. In one fifteen year cohort from a major Nigerian medical school, nearly half had emigrated within fifteen years of qualifying, and of those who went, the largest share came to the United Kingdom.

Read that last clause again with Meridian’s own position in mind. The group’s remaining hospital is in London. The United Kingdom is the single biggest destination for Nigerian doctors who leave. Meridian is not an observer of this flow. It is standing in it, and it has been a beneficiary of it.

Which means there are exactly two ways to staff a new hospital in Lagos, and the choice between them decides whether this project helps the catchment or harms it.

The first is to hire locally at private rates, which in a market this short means outbidding the public hospitals for the same scarce clinicians. The building opens, the ribbon is cut, the figures are excellent, and the total number of doctors in Nigeria has not moved by one. The consultants have simply been reallocated from the people who could not pay to the people who could. The catchment is measurably worse off at the exact moment the press release says the opposite. Nothing in Meridian’s accounts would ever show this, which should be familiar by now: it is the same shape as every other cost in this study that lands on someone who is not in the room.

The second is to build the hospital around bringing people back. A Nigerian consultant in Manchester or Toronto is not going to return for patriotism. They will return for a department that works, equipment that is present, colleagues at their own level, a career that does not stall, and a life that is liveable. Every one of those is a design and operating decision, which is to say it is precisely the kind of thing you would want to model before committing to it. Do that and the doctor count in Nigeria actually rises. The catchment gains capacity rather than losing it, and Meridian gets the one thing its competitors in this market cannot easily assemble: senior clinicians who chose to be there.

This is why the answer to "where should we build" is not really a place. It is a staffing strategy, and the place follows from it. It is also, conveniently, the test of everything Meridian says about itself, since a group that treats goodwill as a resource it is not allowed to plan with has no business solving its staffing problem by draining somebody else’s.

An answer is graded against alternatives, and choosing those alternatives after the preferred answer is known is the second way to rig a rubric. It is also the one nobody audits: weights get argued over in the room, and almost nobody asks why the options on the chart were those options. So the comparator set is fixed here, before any weighting and before any answer.

Four locations: Lagos, Abuja, Port Harcourt and Accra. Three in the target market and one outside it, and the set deliberately contains at least one option that a reasonable person would argue for on grounds this brief does not favour.

Two comparators are excluded, and naming them is the point of this paragraph rather than a footnote to it. The first is not proceeding yet, which is a legitimate answer to a question about where to build and is excluded because it is judged at the gate itself rather than on a scale built out of location criteria. The second is expanding the existing London hospital instead, which competes for exactly the same capital. Both exclusions narrow the comparison in a direction that favours building. Anyone who wants to argue with the eventual answer should probably start here rather than with the scores.

Seven criteria, weighted, and fixed before any candidate was looked at and before any answer was written. The weights are the argument, and anybody who disagrees with the answer that eventually arrives should be able to point at the weight they would change rather than at the conclusion they dislike.

The threshold is 70 out of 100. A location scoring below it is not built on, whatever else is attractive about it, and the threshold is stated here rather than set once the scores are known.

Two criteria carry nearly half the total between them and they are the same argument in two parts. Clinician supply over time is first because it is the only criterion that decides the sign of the outcome rather than its size: score well on every other line and badly on that one and you have built an excellent hospital that left its catchment worse off. Training and accreditation route is second because it is what makes the first one achievable at all.

The case against weighting clinician supply this heavily is worth stating, because it is not weak. It is the criterion with the least reliable data behind it, and weighting the least measurable factor most heavily is normally an error. The answer is that the alternative is weighting it at zero, which is what every business case in this market already does, and which is how a decision gets taken without ever seeing its main consequence.

Three, and they narrow the answer considerably.

A hospital goes to market only once it is fully mature and demonstrably best in class. Not when the market is warm, not when capital is wanted elsewhere. That single rule turns the usual build-to-sell shortcuts into the reason a sale cannot happen, because each of them is visible in exactly the numbers a buyer’s adviser pulls first. It also means "mature and best in class" has to be defined by something outside the seller, scored against named alternatives, with the places we fall short stated. A gate a company grades itself against drifts, gently and without anybody lying, toward whenever the board would like to sell.

The asset is to be considered across its whole life rather than the holding period. Gating the sale on maturity removes the temptation to hand on a problem deliberately. It does nothing about handing on one nobody knew was there, and a hospital can be genuinely best in class at year eight and still carry a configuration that fails at year twenty five. Any answer that only reasons to the point of sale is incomplete.

Best in class means best against what this place needs, measured where it stands, not best against a standard imported whole from somewhere else. A standard carries its origin’s assumptions about land, power, staffing and travel silently, and those assumptions are the first thing to break on arrival.

Three risks belong to this decision rather than to hospitals in general, and an answer is not complete unless it says what it does about each. They are set out the way every risk on this site is: the mechanism, who ends up carrying it, and what it would take to put a number on it.

The seven that hold wherever a hospital is built are on the argument page, and they apply here too.

The last of these is the one that decides whether any of the rest matters, and it is worth being plain about why.

The decisions that determine how a hospital behaves close in sequence, each one removing options from the next, and all of them close before a single patient walks through the door. So an answer has a shelf life. The same analysis, identical in every word, is worth a great deal before the option on the land is taken and almost nothing afterwards.