The most valuable early-stage decision may be to reshape or stop a project before major resources are committed.
A hospital project can respond to a genuine healthcare need and still be the wrong investment. The problem may not be an inadequate design or an unsuitable financing structure. It may be more fundamental: the project may have defined the solution before it properly understood the need.
The wrong starting question
Healthcare infrastructure projects often begin with a physical answer: a 200-bed hospital, a specialist centre, an extension to an existing facility or a new diagnostic unit. Political urgency, visible capacity shortages and stakeholder expectations can create pressure to move quickly toward design, tendering and financing. Yet “What should we build?” is not the first question. The first question is “What health-service problem must be solved?”
This distinction matters because infrastructure is only one possible response to a healthcare need. A shortage of accessible services might be addressed through a new hospital, but it might also be addressed by expanding an existing facility, strengthening primary and ambulatory care, contracting a private provider, reorganising referral pathways, introducing mobile services or combining several interventions. Starting with a predetermined asset can lock the project owner into a costly solution before alternatives have been compared.
The APMG PPP Guide treats identification and screening as the starting point for any public infrastructure decision, irrespective of whether the eventual procurement model is a PPP. It emphasises that weak work at this stage creates more expensive changes later—in both time and money—and that screening should prevent scarce public resources from being committed to projects that should not proceed.[1]
Project identification: define the need before the asset
In healthcare, identifying the need requires more than noting that beds are scarce or that a region has no modern hospital. The analysis should establish who needs care, what services are missing, where access gaps exist and how demand may evolve. Relevant evidence may include population size and growth, age and disease profile, catchment geography, travel time, utilisation of existing public and private facilities, workforce availability, payer mix and the community’s capacity to pay.
The World Bank’s guide for healthcare entrepreneurs makes the same point from the private-sector perspective. A project concept should identify the target population, services, operating model and financial objectives, while recognising financial sustainability as an early constraint rather than a question to be postponed until the search for capital begins.[2] The International Health Facility Guidelines similarly frame feasibility planning as a basis for sustainable infrastructure: private facilities must be capable of capital and recurrent funding and long-term operation. Following the same logic, public facilities should demonstrate value for money and a clear, holistic community benefit.[3]
A well-defined need should therefore be expressed in service and outcome terms—for example, reducing avoidable travel for emergency obstetric care, increasing access to oncology treatment or closing a projected diagnostic-capacity gap. This creates a neutral basis for comparing solutions.
Pre-feasibility is a decision filter, not a smaller feasibility study
Pre-feasibility is sometimes treated as an abbreviated technical report. Its real purpose is different: it is a decision filter. It should establish whether there is enough evidence to justify the cost and time of a full feasibility study and, if so, which project option deserves deeper appraisal.
At this stage, the analysis should be proportionate. It does not need detailed design, lender-grade due diligence or a fully developed financial model. It does need enough reliable information to identify critical issues that could make the project unviable, compare credible alternatives and determine what remains uncertain.
1. Identify the healthcare need
Define the population, service gap, expected benefit and strategic rationale. The proposed investment should align with health policy and address an evidenced need rather than a general desire for a new building.
2. Assess different project options
Compare the realistic alternatives, including non-build and lower-capital options. The preferred solution should be selected because it best addresses the need, not because it was the first concept proposed.
3. Scope the preferred project around outcomes
Define service outputs, capacity, clinical profile, project scope and interfaces with the wider health system. Early scoping should avoid over-specifying how the asset must be built. Output-oriented requirements leave room for later design and procurement innovation while focusing on the performance that the completed facility must deliver.
4. Conduct an economic and financial pre-assessment
Prepare an initial view of capital cost, recurrent cost, transition cost, revenues or public payments, affordability and major risks. For a public hospital, the question includes whether the project offers sufficient social and economic value and whether its long-term fiscal commitments are affordable. For a private facility, the analysis must test market demand, revenue logic, operating cost, cash-generation potential, the investor’s ability to fund the asset and the estimated payback period.
This is not yet a declaration that the project is bankable. The pre-assessment determines whether a plausible route to financial sustainability exists and identifies the gaps that a full feasibility study must resolve.
5. Screen financing and delivery options
Financing should follow project logic, not replace it. Public budget funding, sovereign borrowing, DFI finance, ECA-supported credit, EPC+F, PPP and blended structures each have different requirements and risks. Screening should test which routes are realistically compatible with the project’s revenue or payment mechanism, public affordability, risk allocation, country context and procurement rules.
6. Make the project decision: proceed, revise or stop
The most important deliverable is a recommendation. A green light should authorise a defined next step: a full feasibility study, supported by a project-management plan, evidence requirements, governance structure, specialist workstreams, budget and timetable. A conditional decision may require the option or scope to be revised. A stop decision prevents further expenditure on a project that is not viable or sufficiently justified.
Better to stop early than fail later. A robust pre-feasibility process protects capital by making “stop” an acceptable and valuable outcome.
What a useful pre-feasibility package should deliver
A concise but decision-ready package will normally include:
- a clearly evidenced healthcare need and intended benefits;
- a comparison of credible technical and service-delivery options;
- an outline scope based on required outputs and capacity;
- preliminary capital, recurrent and transition cost ranges;
- an initial economic, affordability and financial-sustainability assessment;
- screening of potential financing, funding and delivery routes;
- a risk and information-gap analysis;
- a recommendation to proceed, revise or stop; and
- a roadmap, governance structure and budget for full feasibility.
The role of an independent, healthcare-specialised advisor
During project identification and pre-feasibility, an independent healthcare infrastructure advisor supports the project owner in defining the healthcare need, assessing alternative project options, outlining the preferred solution and conducting the preliminary economic, financial and financing assessment. Specialist input may be requested where necessary, but the advisor remains responsible for integrating the findings and presenting a clear recommendation on whether the project should proceed to full feasibility.
If the project receives approval to proceed, the full feasibility study requires a broader multidisciplinary team that may include health-service planners, clinicians, biomedical specialists, architects, engineers, cost consultants, financial modellers, legal advisers and local experts. At this stage, the advisor acts as lead coordinator, defining the required workstreams, guiding the specialists and ensuring that their analyses contribute to a single, coherent and decision-ready feasibility study.
Independence is particularly valuable before the delivery model, financing structure and implementation partner have been selected. Contractors and suppliers may provide useful market knowledge, but they also have a legitimate commercial interest in the solution eventually adopted. An owner-appointed advisor allows the project owner to assess alternatives without becoming tied to a predetermined contractor, technology or financing route.
The credibility of the process ultimately depends not only on independence, but also on reliable evidence, transparent assumptions, relevant expertise and clearly stated limitations.
Conclusion: the first investment is better judgement
The identification and pre-feasibility phase is not a formal administrative preparation. It is where the project owner decides whether the proposed investment is the right response to the healthcare need, whether it is affordable and potentially sustainable, and whether further development resources should be committed.
A technically impressive hospital that cannot be operated or financed is not a successful project. Nor is a financeable project that fails to address the priority healthcare service gap. The objective is to align needs, solution, scope, economics and financing before detailed design and procurement begin, when changes become more difficult and costly.
The best outcome of pre-feasibility may be a green light. It may also be a smaller project, a different service model or a decision to stop. Each is better than reaching the same conclusion after design fees, tender costs and political commitments have accumulated.
About the author. This article reflects Daher Nourieh’s professional perspective on early-stage healthcare infrastructure development. He is an international healthcare infrastructure executive with experience across project management, procurement, business development and general management, and writes about project preparation, feasibility, financing and investment decisions.
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