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Nursing home provider rides the silver tsunami

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"Our vision is to be a leading healthcare operator in the region. We see eldercare as a sector with a lot of potential because of the ageing population. We want to focus on two things: growth and the improvement of quality of care." - Orange Valley CEO Khoo Chow Huat.

NURSING homes do not have to be dull, sterile places crammed with beds. With some experimentation and effort, eldercare services provider Orange Valley is paving the way for residents to enjoy quality care in a comfortable, modern setting that feels just like home.

Singapore, as well as the region, is facing a greying population and the demand for nursing homes has shot up tremendously in the past decade.

Orange Valley has been riding on the silver tsunami to become the largest nursing home operator in Singapore with six locations islandwide and more than a thousand beds.

Khoo Chow Huat took over the helm in August last year and he is not content with just conquering the local market: he has his sights set on the surrounding region as well.

A first-time entrant to the Enterprise 50 Awards, Orange Valley started with just one nursing home in 1993 set up by its founder and previous CEO Tan Soo Sam.

After the business was bought over by equity fund KV Asia last year, Mr Tan stepped down and Dr Khoo was brought in to run Orange Valley.

ENHANCED STANDARDS

Dr Khoo may be new to Orange Valley but he is no stranger to the healthcare business. He was previously at an investment firm which looked at healthcare assets in the region. Prior to that, he was the CEO of Mount Alvernia Hospital and Assisi Hospice from 2008 to 2012.

Says Dr Khoo: "Our vision is to be a leading healthcare operator in the region. We see eldercare as a sector with a lot of potential because of the ageing population. We want to focus on two things: growth and the improvement of quality of care."

With the introduction of the enhanced nursing home standards by the Ministry of Health (MOH), Orange Valley has been reviewing and improving its systems and processes to meet the new requirements which will be enforceable from next April.

Orange Valley recently passed all three licensing audits by MOH with zero findings, and all six facilities are on a two-year licence.

"We have been looking at new tools and equipment to enhance productivity and deliver better care," says Dr Khoo.

This year, the company purchased a new medication packing machine to improve efficiency by allowing staff to pack medication faster and reduce errors with more information printed on the packages. It also enables them to track stock levels.

Orange Valley is also evaluating the use of machines to monitor vital signs of patients more accurately and make the task less taxing for staff.

The company is also looking at new models of care. For example, Orange Valley is currently testing out the "Eden" concept in its newest nursing home at Sims Avenue.

The idea is to create a lush and healing environment for residents with plenty of greenery. Residents also get the opportunity to benefit from pet therapy and to plant their own gardens in the premises. If successful, this initiative will be rolled out to the other homes, says Dr Khoo.

"We want to grow, but we want to also make sure we deliver good care through these different initiatives," he states.

Dr Khoo says that the company is constantly on the lookout for more opportunities. He cites the government's move to grow the eldercare sector by releasing suitable sites for the private sector to develop into nursing home facilities.

Another area that Orange Valley is looking at is the government's Build- Own-Lease model, where MOH builds and owns nursing homes and selects an operator through an open tender. The ministry aims to develop 17,000 nursing home beds by 2020.

These developments are all growth opportunities for Orange Valley and would allow the company to increase its capacity, says Dr Khoo.

Aside from the government's support for the nursing home sector as a whole, he says that having a private equity fund owner gives the company an advantage. While some nursing home operators face constraints when it comes to resources, Orange Valley is able to request more funding to pursue opportunities if it has business propositions that make sense.

OVERSEAS MARKET

Also, as a larger group, Orange Valley is able to enjoy greater economies of scale. For example, the company has a central kitchen that cooks for all six nursing homes instead of having meals cooked separately at each location. This also helps the company to have better control over food quality.

"As a bigger group, it allows us to experiment with different models of care. With six branches, we can try out a model in one home and if it is successful, we can roll it out to the other homes. If we only have one facility, it is hard to try new things and run normal operations at the same time," explains Dr Khoo.

Another growth opportunity that Orange Valley sees is the overseas market.

"In the past, we were very focused on Singapore as our main business. But over the past year, we have started looking at regional opportunities - in particular, China," says Dr Khoo.

He adds that the company has been approached by various parties to collaborate with them on nursing home projects in China as they have a high regard for the Singapore healthcare system.

Just a few months ago, Orange Valley signed a memorandum of understanding with CapitaLand in Guangzhou to develop an eldercare facility.

Dr Khoo says that of all the markets the company is looking at, China is the most ready due to its ageing population as a result of the one-child policy.

"They don't have many good nursing homes and there is a gross shortage of supply. All of the Asian markets are ageing, but in markets like Indonesia, there is still a strong mindset that the elderly should be cared for in the family. The idea of a nursing home might take a while before it becomes a viable business proposition," he explains.

Orange Valley may be benefiting from the growing ageing population and rising demand for eldercare services, but it still faces challenges as an SME.

Rent is not a big factor as it owns some of its facilities and some are leased from the government, which is "quite a reasonable landlord", says Dr Khoo.

"Manpower is always an issue in the healthcare sector, even in big hospitals. When it comes to SMEs, it gets even more challenging," he says.

To cope with the labour crunch, Orange Valley has been looking at different sources of manpower. The company used to bring in workers from the Philippines, but it is now looking at places like Myanmar.

The company is also trying to attract locals to the business by participating in job fairs, and is looking at how to redesign jobs to attract Singaporeans to the sector.

"I am part of the ILTC (intermediate and long-term care) manpower council and we constantly discuss how we can work together as an industry to raise the profile of the sector so that people are more aware of it and the advantages of joining us," he says.

Dr Khoo says he expects demand for eldercare services and nursing homes to continue to grow.

"What we hope to do, besides growing our capacity in tandem with demand, is to offer more options for consumers. In the future, I imagine that when we build nursing homes, we may build homes with more selection of room types, with a higher proportion of single and double rooms, so they can choose," he says.

Dr Khoo adds that over the next 20 years, consumers will be more discerning and there will be people who have the ability and the desire to be cared for in an environment that is better than what's available today.

"As the government ramps up capacity, our question is how we can improve our quality of care and offer value for money," he concludes.