opportunities in private healthcare in the gcc

“Opportunities in Private Healthcare in the GCC”

Presented by: Ralph Foster II

AHMC is a private US company headquartered in Washington D.C. focused on the development and management of world-class hospitals that operate according to US management fundamentals and quality standards (JCI).

AHMC’s 16 year track record includes successful collaboration in more than 50 hospital projects, on 5 continents and 24 countries around the world.

AHMC’s model is adapted to the varied environments in which we operate and according to the expectations of the clients we serve in order to deliver enhanced operational capabilities, quality, and profitability.

AHMC’s mission is to provide expertise on a local level and through knowledge transfer develop quality medical services that are accessible to the communities we serve.

AHMC PROFILE

AHMC HOSPITAL CHARACTERISTICSAward winning state-of-the-art hospital design.

AHMC HOSPITAL CHARACTERISTICSIntegration of modern technology.

AHMC HOSPITAL CHARACTERISTICSCommitment to quality, safety and patient satisfaction.

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KEYS TO SUCCESS

Assess market demographics

Analyze epidemiological data and trends

Is there demand in the market for services and will prices be sustainable…No profit no mission.

Service selection – Can’t be all things to all people: Ok to be Wal-Mart and ok to be Macys but you can’t be both

What are potential sources of patient referrals

Define strategy and vision of investors/owns

Develop the business plan and objectives of the hospital

Differentiation and positioning effectively

POPULATION TRENDS

GCC has fastest growing population:

2020: Population increase by 33%

• Majority under 25

• Advances in medicine leading to increase in life expectancy

GCC HEALTH TRENDS

Affluence and sedentary lifestyle leading to:

– Obesity

– Diabetes

– Heart Disease

– Cancer

http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/chapters/2_1.pdf

DEMAND FOR HEALTHCARE

A 2005 study estimated that by 2025 demand for healthcare services would increase on average by 240% in GCC– Cardiovascular disease: 419%

– Diabetes-related: 323%

– Cancer: 275%

http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/chapters/2_1.pdf

BED NEED

162,000 Beds by 2025 in GCC– Saudi Arabia and UAE will have largest increase in

demand

Saudi MoH has projected that it will need to double the number of existing beds to 66,000 in the next 5 years to keep pace with needs

http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/chapters/2_1.pdf

NEED FOR SPECIALIZED CARE

Cardiac

Oncology

Surgical Hospitals

Orthopedics

Women and Childrens’ Hospitals

Acute Care and Rehabilitation

CHARACTERISTICS OF HEALTHCARE

Hospitals are a complex business

Healthcare is a dynamic industry

Healthcare is local

Reimbursement for services unique

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CONSIDERATIONS

Long-term perspective Dedicated/sustained effort Business of “people” Team sport Reimbursement Scarcity of capital

Human Financial

= Significant ROI possible

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BUSINESS MODELS

Classic:

Public

Public Private Partnerships

Private: Foundation

Family Owned

Doctor Owned

Investor Owned

Alternative:

Hospital within a Hospital

Doctor – Investor Hybrid

Joint Ventures

Collaboration with Insurance Companies

Concession of Services

HOSPITAL DEVELOPMENT

PHASE 1-FS/BP DevelopmentTIMEFRAME: 2 – 3 MONTHS

Conduct Feasibility Study

Develop Business Plan

Develop the Financial Projections

Analysis of the site and architectural design

Preliminary staffing plan

Market analysis

PHASE 2- PROJECT MANAGEMENT CONSULTINGTIMEFRAME: 18-24 MONTHS Work with architect and

construction manager Operating procedures

development Equipment planning HIT Selection and

implementation Development of bylaws for

the board and medical staff Establish governance

structure

PHASE 3- PRE-OPERATIONS & COMMISSIONINGTIMEFRAME: 6 - 9 MONTHS Staffing core operating team General staffing and

recruitment Physician recruitment Implement operating

policies and procedures Implement process design

and protocol Equipment procurement

and installation Establish financial controls

and measures Hospital commissioning

PHASE 4- OPERATIONSTIMEFRAME: 10-15 YEARS Turnkey executive

management and control of daily business operations

Implement international mode of clinical procedures and medical care

Implement quality improvement and patient safety framework

Implement AHMC best practice financial and operations management

Recruitment, training and retention of physicians, nurses and hospital staff

Selection/implementation of HIT System

AHMC Onsite Full-TimeAHMC Consulting and Support

GAP ANALYISIS

Governance

Medical Staff

Human Resources

Financial

Operations

Quality Management

GOVERNANCE

Governance

Structure

Effectiveness

Strategic Planning

MEDICAL STAFF

Organizational Factor

Leadership

By Laws

Staffing Levels

Productivity

Clinical Credentialing

Alignment

HUMAN RESOURCES

Skills

Productivity and staffing levels

Performance indicators

Salaries & Benefits

Continuous education

Alignment

FINANCIAL MANAGEMENT

Financial Statement Review

Balance Sheet Review

Capital Structure Analysis

Ratio Analysis & Key Performance Indicators

Revenue Cycle

Supply Chain

Equipment Sources and Financing

Information Management

OPERATIONS

Management Effectiveness

Benchmarking

Policy and Procedures

Out Sourced Services

QUALITY

Outcomes and performance indicators

Regulatory compliance

Accreditation readiness

Quality management program- continuous measured improvement

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ALIGNMENT OF INCENTIVES

Owners / Investors

Physicians

Employees

Payors

Other Hospitals

Community

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SERVICE EXCELLENCE

Patient Satisfaction

Quality of care and service: Meeting patients and families’

expectations

Enhancing the patient’s experience

Instilling a culture of service

Differentiation and positioning

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CHARACTERISTICS OF SUCCESS Clearly identified and sustainable local market

Socio-economic levels of patients and related expectations

Aligned, well-trained and multi-specialty medical staffs

Operated to International Standards (ISO9000/HQS/JCAHO)

Emphasis on “value” technology as a clinical and business tool

Clinical benchmarking and measuring of outcomes

Understand the relationship and implications between clinical care and financial performance

Productivity and flexibility

Appropriate and sufficient capitalization – with reality based financing

Accountability, transparency and long-term relationships

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SUMMARY Significant new opportunities exist

Know who you are and know your market

Align incentives with owners/investors, stakeholders, medical staff, employees and payors

Focus on developing a culture of service excellence to enhance patient experience

Staff retention and development

Maintain the optimal mix of technology and financial resources

Nurture an environment that is focused on quality and continuous improvement

Differentiation and effective positioning

Thank you