It is not the first foray abroad for the South London-based National Health Service (NHS) Trust. Its Abu Dhabi-based clinic is
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1 Beyond the horizon Tatum Anderson looks into the growing phenomenon of centres of medical excellence opening outposts in different countries, and analyses the benefits and the challenges of embarking on these overseas projects King s College Hospital (KCH) is one of the largest and busiest teaching hospital trusts in the UK. Training over 900 dentists, 750 doctors and 300 nurses every year, it signed a deal at the end of last year to open a brand new general hospital in New Chandigarh, India, as part of a government-backed scheme led by Indo UK Healthcare Pvt Ltd to create 11 institutes of health in the country in the coming years. Phase one of the project will include a 250-bed hospital, trauma centre and day surgery centre, and during phase two the general hospital will be expanded to 500 beds. It is not the first foray abroad for the South London-based National Health Service (NHS) Trust. Its Abu Dhabi-based clinic is hospitals in Dubai and India will have a similar ethos, and similar services and clinical protocols, to those in London already over a year old, and there are also plans to open more King s-branded clinics there. Furthermore, KCH is set to open an bed hospital in Dubai by 2018 through its partnership with the Ashmore Group plc, a specialist emerging markets investment management company. It will offer four main specialties paediatrics, endocrinology, orthopaedics, and obstetrics and gynaecology alongside acute and general medical services. Importantly, the hospitals in Dubai and India will have a similar ethos and similar services and clinical protocols to those in London, according to the KCH hospital management team. Around 30 per cent of the clinicians in India will be General Medical Council-accredited staff from the UK and Europe, and King s will also bring visiting doctors from London to the Middle East to hold masterclasses on complex cases. King s rapid expansion is the latest in a wave of internationally-recognised hospitals that have embarked on overseas operations, or outposts, away from their home markets. Already, London s Moorfields Eye Hospital has a branch in Dubai and the city s Imperial College Healthcare NHS Trust has two outposts in the UAE. Other well-known UK hospitals, such as the Royal Marsden, are rumoured 8
2 to be ripe for expansion abroad, and several US hospitals have already set up overseas outposts. The Cleveland Clinic, noted for its cardiovascular services, now operates in Abu Dhabi and Saudi Arabia, while Johns Hopkins Medicine International These are hospitals with long and proud histories of quality medical care, teaching and research has 18 operations overseas, including in Singapore, Turkey and most recently, the Middle East. Eyes on the prize The attractions of moving overseas are obvious established brands can carve a niche in a new market, trading on their reputations as centres of excellence to attract a whole new sector of paying patients. These are hospitals with long and proud histories of quality medical care, teaching and research (Moorfields, for instance, began in 1804 treating soldiers returning from the Napoleonic wars with eye injuries). Today, many already serve medical travellers in their home countries. They thus have the potential to be significant revenue-generating operations. Although an NHS Trust, hospitals such as KCH are permitted to open commercial private hospitals abroad using funds generated from treating private patients in the UK (although in this deal, KCH s investment management partners will put in the money, while KCH provides the healthcare services). All the profits they make from treating patients overseas are ploughed back into the NHS hospitals back home. Hospitals looking to set up outposts often target countries that are sorely lacking in health infrastructure or particular specialties and that have burgeoning middle classes. These countries increasingly have to cope with conditions that blight richer populations: cancer, obesity, diabetes and heart disease are on the rise, and growing elderly populations need particular care. Invariably, governments are spending enormous amounts to get their health systems up and running China, for example, plans to increase expenditure on healthcare to $1 trillion by Healthcare infrastructure outside the country s major cities is in urgent need of modernisation, and in 2014 the Chinese government announced a plan to pilot wholly foreign-owned hospitals in seven mainland cities and provinces. India, meanwhile, is building so-called smart cities with state-of-the-art infrastructure to accommodate a growing middle class that requires improved healthcare services, according to Simon Taylor, head of commercial operations with Kings College Hospital s management team. The population growth in India is massive, so when you look at the projections for how many hospital beds they need, there is definitely room for allcomers at the moment, he said. Our >> 9
3 pitch is that we are bringing NHS-standard care to India. The Middle East is very attractive too. Turkey needs more than 95,000 new hospital beds by 2023 and Algeria has announced a major hospital building programme, including several cancer centres. Saudi Arabia has a shortage of local physicians and its healthcare expenditure reached an estimated $35.9 billion in 2013 interestingly, its healthcare budget in 2014 included funding for 11 new hospitals, 11 medical centres and two medical complexes, on top of the 132 hospitals and healthcare centres already under construction. Evolving strategies In the past, medical outposts were very different to the structure they take today. US hospitals typically leased their brands to healthcare service providers for hefty fees, but there was little else that could be linked to the clinical services, equipment or ethos of the original hospital. Johns Hopkins decision to form a joint venture with the Singapore government changed the nature of outposts. Since the 1990s, it has established high-end cancer services in the city-state and researched cancers that disproportionately affect people in Southeast Asia, such as nasopharyngeal cancer; and rather The non-profits, especially academic teaching hospitals, are not going to be so entrepreneurial than leasing a brand only, the hospital provided doctors, research capacity and clinical services. Currently, it also trains doctors and occupies space in Tan Tock Seng Hospital. It is a unique and equally rewarding public-private partnership that places us on the forefront of healthcare advances in the country and allows us to provide Johns Hopkins expertise to patients in Singapore and beyond, said Pamela Paulk, president of Johns Hopkins Medicine International. We enjoy partnering with a local entity. Cleveland Clinic went one step further when it announced that it would be opening its own hospital overseas. Today, its 360-bed facility in Abu Dhabi, which opened last year, has five clinical floors, three diagnostic and treatment levels, 13 floors of critical and acute inpatient units, and is fully digital. Curiously, few of the other well-known and reputable US hospitals have established big-name outposts, said Josef Woodman, CEO of Patients Beyond Borders: I ve queried a number of hospitals. Why haven t you done successfully what hotels have done? You can t go into any large city in the world and not see a Hyatt, Four Seasons or Holiday Inns. I understand it s more complicated. Finding doctors and clinical care? It s not like it s impossible. The fact is, setting up medical outposts abroad has not always been easy. There have been setbacks and disappointments as well as reports of empty beds and complaints from local doctors who believe their clients are being stolen. Furthermore, insiders say that patients had expected to see US doctors inside these five-star hospitals, rather than local doctors. The Mayo Clinic, which had been brought in to help upgrade Dubai s medical system, quietly packed up and left Dubai s 10
4 Healthcare City after the financial crash of Four years later, however, it signed an agreement with the Ministry of Health in Dubai to collaborate in the field of continuous medical education and to exchange experts and consultants to provide check-ups and treatment for critical cases in the Ministry s facilities. Cleveland Clinic, meanwhile, experienced delays opening its Abu Dhabi facility. Opening an outpost outside the US requires being thoughtful and intentional about the merging of different cultures Originally slated for opening in 2010, the hospital preferred not to explain the nature of the delays, although reports at the time suggested it needed to recruit a large number of doctors. CEO Toby Cosgrove, for his part, said of the 2.7-millionsquare-foot facility: We have successfully completed the largest physicianrecruitment effort ever undertaken. Such signature US hospitals, with their teaching and academic prowess, appear to have generally scaled back their commercial ambitions to build big brandname hospitals, according to Woodman. Mayo Clinic has offices from Canada to Mexico, although these only serve to help the 8,000 international patients from 140 countries who travel to its US hospitals. But others have their sights set somewhere over the horizon. Harvard Medical School has recently opened a highly regarded Center for Global Health Delivery in Dubai. The Center does not provide patient care, however, but focuses exclusively on research and training. Johns Hopkins International, meanwhile, has formed a healthcare company with Saudi energy and chemicals giant Saudi Aramco. According to Paulk, the purpose of this long-term partnership, which started in 2014, is to provide medical services to Saudi Aramco s 360,000 employees and dependents, education for its clinicians and other healthcare professionals, and opportunities for research collaborations. The strategy is certainly an interesting one. Opening an outpost outside the US requires being thoughtful and intentional about the merging of different cultures, ensuring that the staff abroad feel part of the Johns Hopkins institution and protecting the integrity of the brand and the research we conduct, the education we provide and clinical care of patients, said Paulk. Other US hospitals are providing services for existing healthcare centres abroad. The University of Pittsburgh is doing so in Sicily and Ireland, and has even set up a joint venture with Qatar s principal public health system, Hamad Medical Corporation (HMC), to run a trauma centre at Hamad General Hospital, HMC s primary hospital. Woodman believes that many of these teaching hospitals may be cautious about penetrating new markets because they aren t as used to the cutthroat >> 11
5 commercial business world. The nonprofits, especially academic teaching hospitals, are not going to be so entrepreneurial, he said. They are naturally more risk-averse. It s a lot more difficult to take on a genuinely entrepreneurial enterprise that involves the buying of land, cutting through red tape, working with developers in setting up infrastructure. In contrast, there has been a proliferation of publicly-traded hospitals in Southeast It s a lot more difficult to take on a genuinely entrepreneurial enterprise that involves the buying of land, cutting through red tape, working with developers in setting up infrastructure Asia making land grabs for territories outside their own borders. Australian Ramsay Sime Darby Health Care and Bangkok Dusit Medical Services are examples, while IH Healthcare Berhad operates in Singapore, Malaysia, Turkey, China, India, Brunei, Macedonia and Iraq, for instance. These companies are more accustomed to conducting themselves as businesses. In contrast, said Woodman, few US hospitals have expanded beyond their own provincial areas. A challenge for all Of course, expansion abroad is not easy, even for commercial operations. Fortis Healthcare in India, for example, expanded rapidly in Asia in recent years before retreating fairly quickly. It is now focusing more on rural markets at home. That said, some companies such as Johns Hopkins Medicine International are looking for more opportunities. As Paulk said: We are only scratching the surface of what we can do. We are currently evaluating ideas for new products and services that could be introduced through Johns Hopkins Medicine International to expand our global impact. UK hospitals also appear to be ambitious. Indeed, the British government is so intent on establishing further NHS outposts that it has set up a joint venture between its business, health and NHS departments to help more NHS hospitals take the plunge and operate commercially overseas. The strategy of this organisation, Healthcare UK, is to target the 10 most potentially lucrative markets from China to Saudi Arabia and the UAE with a range of options including brand-name hospitals, health systems strengthening services (such as with China s pharmacy sector), education and training. Certainly, it will be interesting to see whether UK hospitals and their backers have success with their commercial operations overseas, what revenues they can accrue, and whether they become more widespread than the American giants. Whatever the outcome, outposts are here or there to stay, and they will likely continue to multiply as health institutions horizons expand. 12
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