Hospital pioneer expands through crisis
By Muhammad Cohen
BANGKOK - Many think Bangkok's Bumrungrad Hospital invented medical tourism,
but medical tourism didn't invent Bumrungrad. The 1997-98 Asian economic crisis
put Bumrungrad's finances on the critical list and prompted its turn from local
to international patients. Now the current recession has given Bumrungrad an
opportunity to shore up the local foundation for its international business.
Bumrungrad, the self-proclaimed largest private hospital in Southeast Asia,
treated more than 420,000 international patients from nearly 200 countries last
year. That figure represented nearly 40% of Bumrungrad's total of 1.1 million
patients, and a similar percentage of Thailand's medical tourism traffic.
International
patients, because they generally come for more complex treatments, accounted
for more than 50% of Bumrungrad's estimated US$260 million turnover.
A resident base of talented physicians and paying customers is vital to
sustaining a world-class hospital, according to Bumrungrad's chief executive
officer Mack Banner. That limits the chances of success for destinations that
hope to challenge Bangkok as a medical travel hub and it limits opportunities
for international expansion by even the best-known hospital brands, Banner told
Asia Times Online.
Banner, an American who retains his southern drawl and folksy charm despite
more than 15 years overseas, has run the 554-bed hospital since mid-2005.
Before Bumrungrad, Banner served as a healthcare executive in the US, Saudi
Arabia, Australia, Singapore and Malaysia.
Medical paradise
"I've been working overseas since the 1980s and I've had hundreds of proposals:
'Let's go to this nice location and put in a specialty hospital.' They never
work. To have a top-flight hospital, you need top-flight doctors. These
destinations don't have a local base to develop that." Banner explained. "The
lesson I've learned is that hospitals need a critical mass of local population
to support specialties that feed into sub-specialties that are needed to serve
international patients."
Bangkok, the commercial and political capital of Thailand, has the right
conditions, including "a large enough local population that can pay for your
services to sustain a visitor base." Thailand also has the advantage of a large
base of medical doctors, many trained overseas. Prince Mahidol, father of the
current Thai monarch, earned a medical degree at Harvard University - and
married a Thai nurse who came to study there with him - helping to create a
base of Western-trained doctors for teaching in Thailand. This traditional link
to the royal family still thrives, providing a pipeline of quality healthcare
personnel.
Bumrungrad has faced "a perfect storm of challenges" since September 2008,
according to Banner. Those challenges included the H1N1 swine flu scare that,
along with the global recession, crimped global travel, plus political unrest
that climaxed with the shutdown of Bangkok's Suvarnabhumi international airport
for five days. Tourism to Thailand was hit particularly hard. Bumrungrad saw
international visits drop 5.8% through the first three quarters of 2009, with
international admissions down 8.5%, a sharp contrast to the double-digit growth
of recent years.
Bumrungrad has been a household name in medical travel for more than a decade.
"We enjoy a reputation as one of the pioneers of medical travel," Banner said,
noting that patients come from neighboring countries for better care and
Western countries for cost savings, typically 50% or more. "Most of the
attention [to medical travel to Thailand] has come from Bumrungrad. Now we
share that spotlight, and we think that's a good thing. But we're still the
first and we're still the biggest."
To stay on top, Bumrungrad opened a new US$45 million outpatient building in
May 2008, just ahead of the global recession that flattened growth last year.
Ironically, the hospital's first major expansion was completed in early 1997,
months ahead of the Asian crisis. Financed with US dollar denominated loans,
that project drove Bumrungrad to seek international patients, fueling the
medical travel phenomenon. When fully operational, the new building will double
outpatient capacity from 3,000 to 6,000 visitors daily.
"We not only expanded capacity, we feel we expanded usability for patients,"
Banner said. Innovations include pharmacy and cashier facilities on each floor,
and imaging equipment to handle all but the most complex scans in the building.
"We asked ourselves how to make the clinic experience as user-friendly as
possible."
Out of sight
By May, Bumrungrad will have completed a $12 million renovation of its
inpatient rooms. Redesigned by a multi-disciplinary task force, the rooms
feature bedside computer consoles for hospital personnel to access and enter
medical information. Lower-tech improvements include more convenient sinks for
hand-washing before patient contact.
Banner stressed that much of what gives Bumrungrad its competitive advantage
remains out of sight. For example, a team of 20 handles up to 500 e-mail
inquiries daily from prospective patients. They work with the International
Medical Coordination Office, staffed by doctors and nurses to create treatment
plans for patients in advance of their arrival.
From its beginnings, Bumrungrad has been at the forefront of technological
innovation. It established and evolved a single system to cover the entire
hospital operation, a key factor in efficiently handling its outpatient
volumes. That system was purchased by Microsoft in 2007 as the basis for its
healthcare platforms, and Bumrungrad is working with Microsoft to update and
revamp the software.
Last year, the hospital added an automated medication delivery system. At the
heart of it, an Italian-made pharmacy robot - nicknamed Franco by staff -
compiles and labels individual doses of inpatient prescriptions for delivery
throughout the hospital via a pneumatic tube system. "We thought this through,"
Banner explained, "How to make prescribing, administration and dispensing as
simple as possible. It’s not a front of the house item, but it's vital."
Technology also helps Bumrungrad benchmark itself to international standards,
but for Banner that's not the most important measure. "How can we generate
'wows',?" is the key, according to Banner. He defines "wows" as "a service you
don't expect or one delivered in some exceptionally user friendly way."
Bumrungrad is a private hospital listed on the Stock Exchange of Thailand, but
Banner sees no conflict between patient care and profits. He cites an adage
from Dr Thomas Frist, founder of Hospital Corporation of America (and father of
former US Senate majority leader Bill Frist): "If you take care of patients,
the bottom line will take care of itself." Banner recalled, "I've worked for
organizations that say, 'We need a rate of return of X percent.' That's
short-term thinking that won't work." He cited the pharmacy robot as an example
of a service improvement that can't be quantified.
Bumrungrad gets a helping hand on keeping service up and costs down from its
customers. Nearly three-quarters of its patients pay their own bills. "When
people are paying their own bills, they act as their own utilization review
committee," Banner said. "If the doctor says you need an MRI, you ask, 'what
does it cost and where else can I do it that might cost less.' I'm a great
believer in the effectiveness of self-pay to keep costs down. When you get into
a third-party system, you engender a situation where costs can get out of
control."
That said, the hospital does accept payment from local and international
insurers. It even has a deal with Blue Cross of South Carolina in the US that
offers customers the option of having major procedures at Bumrungrad, with the
patient sharing in the savings over a US hospital. However, this segment of the
business, sometimes referred to as medical outsourcing, has been slow to
develop. Banner hopes it will expand, but not at the cost of upsetting
Bumrungrad's winning formula.
"We're not going to get into a situation where we're second-guessed over
pre-authorization and re-authorization that saddle hospitals with extra costs,"
Banner said. "We already have a significant cost advantage over the US. We've
told insurance companies to appreciate that and just let us do our jobs."
Former broadcast news producer Muhammad Cohen told America’s story to the
world as a US diplomat and is author of
Hong Kong On Air,
a novel set during the 1997 handover about television news, love, betrayal,
financial crisis, and cheap lingerie. Follow
Muhammad Cohen’s blog for more on the media and Asia, his adopted home.
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