Clarity of purpose leads transformation in the business of healthcare

NAVIGATING uncertainty is par for the course for anyone leading a business through the ongoing global pandemic.

But for one at the helm of a hospital group, as IHH Healthcare's managing director and CEO Kelvin Loh is, being at the frontline means contending with the urgency of medical crises too.

Clarity of vision and purpose has been a ballast through the many operational changes IHH's 80 hospitals across 10 countries have had to make. In discussing the group's future plans, Dr Loh speaks constantly of the group's vision - "to be the world's most trusted healthcare provider", and purpose - "touching lives and transforming care".

Anchoring on that purpose has been key for IHH as the pandemic accelerates changes in the business of healthcare, Dr Loh says.

In particular, patients' greater desire for transparency and convenience has sped up the delivery of digital healthcare and clearer pricing, while IHH's role in vaccination drives and providing bed capacity for Covid-19 patients have highlighted the importance of close partnership with public healthcare providers.

It has been a whirlwind 18 months for Dr Loh, who took the helm at IHH in January 2020, right before a global pandemic was declared.

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Covid-19 impact

IHH's business took a definite hit. Medical travel, which contributed to 25 per cent of its Singapore business pre-Covid, and 5 and 10 per cent in Malaysia and India respectively, came to a halt as borders closed. Many non-urgent elective procedures were also deferred.

Over the course of the past year though, demand for those electives has returned strongly across all of IHH's markets. In May, the group reported 77 per cent year-on-year growth in the first quarter of 2021 net operating income to RM335.8 million (S$107.9 million), on the back of an 11 per cent rise in revenue to RM3.9 billion.

However, the resurgence of Covid-19 cases in multiple countries, including ones IHH operates in - Singapore, Malaysia, Turkey and India - means headwinds persist in the near term.

Describing the situation in India last month as "truly a humanitarian crisis", Dr Loh says IHH hospitals were deferring as many non-urgent procedures as possible to open up beds to severely ill Covid patients and save already scarce oxygen.

"In times like this, we are in healthcare, these are patients' lives, we have a role to play," says Dr Loh.

He believes the role of the private health sector in a public health crisis has been crystallised in the current pandemic. "There is no way that governments themselves, or private healthcare players alone, would have enough capacity all the time, to cater to all exigencies. But in combination, in partnership, they can be very strong."

IHH was one of the first to start on laboratory testing for Covid-19 and has done close to two million PCR tests now, Dr Loh estimates.

More recent Covid-19 related initiatives include setting aside up to 13 per cent of bed capacity in its hospitals in Malaysia for Covid-19 patients, operating three vaccination centres in Singapore via primary care arm Parkway Shenton, and administering vaccines across its Gleneagles Global Hospitals in India and Acibadem hospitals in Turkey too.

"Having those mechanisms in place to respond quickly and in a flexible way to partner with governments to deal with any such crises is very, very important," says Dr Loh.

The anomaly of this past year has transformed IHH's business in other less-obvious ways too.

Harnessing tech and telemedicine

"In the early days of the pandemic, there was a lot of fear, concerns about how the virus will evolve, whether elderly people are more likely to die... there was a great desire for information to be made available as early as possible, as fast as possible," says Dr Loh.

More than ever, he believes, patients want healthcare providers to provide medical information in a clear, transparent way - from what they will go through, to what the outcomes are, and how much it will cost.

"In the old days, when you get into a taxi you might not know how long it's going to take or what you're going to pay. But that has changed. If you use Grab, you'd know the timing, distance and pricing before you get in," says Dr Loh. And, he believes, IHH can take the lead in the healthcare space to provide similar transparency and certainty.

IHH hospitals in Hong Kong and Singapore - which include Mount Elizabeth and Gleneagles hospitals - have launched fixed price packages for certain procedures. By putting in place an AI (artificial intelligence) engine that analyses a patient's specific condition and profile to estimate medical outcomes, the hospitals have been able to predict bills with about 80 per cent accuracy - enabling them to commit to a price prior to the patient's hospitalisation.

"That helps with transparency, and that transparency gives patients peace of mind. When they have that, they will trust us as their healthcare service provider."

And building trust, is that long-term goal.

Another way in which the pandemic has shaped how consumers view healthcare has been in terms of telemedicine.

Before social distancing and lockdowns forced virtual appointments into view, consumers who already fully expect to be able to buy a book online or do their banking online, largely did not expect the same from their doctors.

In March last year, IHH co-led a minority in Singapore-based telehealth startup Doctor Anywhere, as part of the startup's US$27 million Series B fundraising. But that is by no means the group's only contact with delivering healthcare digitally.

By May 2020, IHH had launched telemedicine in all 10 countries it operates in, building the means for doctors to connect with patients beyond hospitals' walls. There are aspects of specialist care that must happen within a brick-and-mortar hospital - for example, when a tumour needs to be removed, or when a heart needs angioplasty.

"But then there's also the pre-hospitalisation contact, the administrative transactions, post-hospitalisation follow-ups - a lot of that can actually start online," says Dr Loh.

That is why the group has built up the ability to deliver telemedicine - as an extension of its traditional hospital operations.

He sees IHH's investment in Doctor Anywhere as a strategic one that gives them a bridge into a different space - the part of the healthcare system before people require hospital treatment: health check-ups, vaccinations and primary care. "Then when they do need specialist care, we provide that. So that provides a seamless medical pathway," explains Dr Loh.

Growing clusters

It remains to be seen how the Covid-19 pandemic will unfold, but there are larger forces affecting healthcare which Dr Loh believes remain unchanged.

An ageing population is one. "People above 65 years of age have two to three times the hospitalisation rate of people below 65. So for the same demographic, the rate of hospitalisation rises as the population ages."

In anticipation of rising demand for its hospital services, the group will continue to expand capacity and add more hospitals. But its strategy going forward will be to grow geographical clusters of hospitals, centred around urban metro areas IHH already has a presence in. "We might add on and repair, or fire up new greenfield hospitals, we are open," he says.

The goal is to reap efficiencies of proximity, and follow the demographic trajectory - metros are where the population growth tends to be too.

"We are a growth company, so we continue to look for growth. But at this point in our development, growing for the sake of size is not that important anymore," says Dr Loh.

Rather, IHH needs to use its international platform to make healthcare better. Staying at the forefront of medical technology advancement is costly; developing its own hospital IT system, or investing in the AI engine to predict costs, can be too.

But the scale IHH possesses allows it to derive significant value from such investments that can be passed on to patients. "Imagine, if we amortise the cost of building an IT system that is eventually rolled out across hospitals across all our markets - it brings down the cost and we can transfer savings to patients," explains Dr Loh.

Having that global network enables best practices and know-how discovered in one hospital to be shared across others. "Using synergies of global scale, we can help our patients to bend the healthcare cost curve," he notes.

Valuing people

Patients are not the only lives referred to in IHH's "touching lives" tagline, though. The lives of IHH's 65,000-strong workforce matter too.

Keeping them safe has been a top priority for the company in this pandemic, according to Dr Loh. He tells of healthcare workers separated from their families for months, and of colleagues who crossed the Causeway at the stroke of midnight before borders shut last year so as to start a shift at Mount Elizabeth the next morning.

"It's our people that make all the difference. It's truly that. We don't create products by using machines. Lives, and our patients are cared for and touched because of our staff and our people."

And Dr Loh's job, as a leader, is to make sure that they are kept safe and have the right processes and tools to do their jobs well. To ensure the sustainability of the workforce too, then, clarity of vision and purpose helps.

"The purpose is important. People who come to healthcare - nurses, doctors, pharmacists - they do so because they want to do the best for the patient. They have to know that as a healthcare service company, we are enabling them to do that."

Dentons Rodyk has been privileged to support IHH Healthcare's businesses in Singapore, such as the Mount Elizabeth and Gleneagles hospitals, in their vision to become the world's most trusted healthcare services network. With over 12,000 lawyers spanning 81 countries, Dentons is the world's largest law firm and can offer the benefit of its expertise, talent and experience across different industries and sectors to clients around the globe. Dentons Rodyk's dedicated multi-specialty legal team stands ready to provide a wide array of legal services to healthcare and life sciences-related businesses, ranging from advice on regulatory matters, intellectual property, corporate transactions, mergers, acquisitions and also legal representation in contentious matters in an increasingly challenging and ever-evolving healthcare and life sciences landscape.