Badminton was the first to go. Then it was table tennis. Before long, this once-tireless athlete had given up cycling, running and climbing, and just lay about listless. Doctors in his native Sri Lanka knew he needed a kidney transplant. But they also knew that only a few places in Asia could handle a case as complex as his—a scary prospect for this nine-year-old.
Meanwhile, doctors for a much older patient had given up hope. The 81-year-old retired executive had fallen to a host of maladies and lay unconscious in the hospital. Help was just a short flight out of Jakarta, but away from the blinking monitors and whirring ventilators of intensive care, he would succumb within minutes.
Providing care for the sick and injured is a hard business to be in at any scale. The practices, the technologies and, most of all, the patients don’t always obey the rules of the marketplace. Few industries fall so far under the heavy hand of regulators. In Southeast Asia, Kuala Lumpur’s IHH Healthcare has emerged as the biggest in a group of listed providers prospering by catering to the increasingly affluent middle class. This year, it breaks into the Fab 50 for the first time.
IHH went public only in July 2012. But as the offspring of two venerable hospital operators, Singapore’s Parkway and Malaysia’s Pantai, it’s no upstart. A takeover fight for Parkway a few years ago left India’s Fortis Healthcare in the cold—and alerted investors to the region’s possibilities for profits in private health care. “There’s a new market that’s growing with some exuberance across the region,” says Alexander Ng, an analyst at McKinsey & Company in Hong Kong. “Parkway always had credibility, but its professionalism in medicine and as a business had begun to attract patients from all over.” Investors figured the same model could work well wherever incomes are rising. Southeast Asian countries, he says, spend only four percent or five percent of gross national product on health care right now, so there’s plenty of room for growth.
The expectations have paid off. The stock has soared 75 percent since the initial offering, and IHH is now the second-largest health care provider in the world by market capitalisation, behind only US hospital operator HCA Holdings. Revenue should rise 14 percent this year, to $2.4 billion, with net profits climbing 19 percent to $238 million, according to Bloomberg. It added 1,000 beds last year and now has 25,000 employees. “This is more than a vindication that size and scale can make our business model work,” says Dr Tan See Leng, managing director and chief executive. “This proves that the people of the region are ready to support health care as an integral aspect of the good life.”
Consider Mount Elizabeth Novena Hospital, opened in 2012. The most expensive hospital ever built in Singapore, it’s designed like a business hotel, with soothing interiors and public sight lines to keep anyone from guessing they’re in a place with sick people. In the 40 private intensive care rooms, the gear hangs from the ceilings to make more room for caregivers. It also has 22 secured multi-room suites, three with enough space for the retainers, family and bodyguards of royalty, both dynastic and corporate.
None of this is meant to replace state and non-profit facilities, the company says. But it is meant to pamper patients, retain doctors and reduce waiting time for beds, a persistent problem.
Staff-to-patient ratios in private facilities are often three times those of public facilities. At Kuala Lumpur’s Gleneagles Hospital, this allows physiotherapists to design care programmes for patients recovering from surgery. “Medical doctors ratify everything, but we’re the ones who assemble the team,” says Hannah Pearson, head of rehabilitation services for the Malaysian unit of IHH, adding that this unusual step also saves time for doctors.
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(This story appears in the 19 September, 2014 issue of Forbes India. To visit our Archives, click here.)