CORPORATE veteran and entrepreneur Eng Aik Meng boasts a long professional track record – a successful one at that. But when he floated his vision of establishing specialist hospitals in the region, well-meaning friends warned him that he could lose his shirt. Or worse still, go bankrupt.
At that time he had pivoted from two decades in the maritime sector with just two years as a healthcare chief in the Fortis group. But a painful experience of having to cobble together treatment for his mother’s cancer in 2013 – from hospital to oncologist to surgeon – lit a fire under his vision of one-stop specialist hospitals.
Today TE Asia Healthcare Partners, backed by private equity firm TPG Capital, has built an impressive portfolio spanning single-specialty facilities in Malaysia, Vietnam, Indonesia and the Philippines, among others. The centres focus on three of the most worrisome conditions of cancer, cardiovascular disease and orthopaedics.
The group has traversed a long way since its founding in 2014. To date a total of roughly US$250 million in capital has been invested; annual revenue was reportedly US$150 million in 2021. The network has over 300 doctors and 2,600 staff across its various centres.
Eng says the group remains committed to its vision of partnership and addressing a healthcare system’s pain points. “We look at things from three perspectives. For patients, how can we give them the best possible care on-location, and make it as integrated as possible with the least stress? From doctors’ perspective, how do we give them the best place to practise? And third, from a payer’s perspective, how do we make services more accessible? For the next five to 10 years, those three things don’t change for us.
“We’re very lucky in Singapore to have good access to healthcare. In other countries, it can be very tough. Our sandbox continues to be in South-east Asia; we think there is still a lot more to do.’’
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But for the challenge that Covid-19 healthcare crisis posed, now thankfully mostly in the rear-view mirror, TE Asia has hit upon a sweet spot. Healthcare itself is seen as an investment megatrend. Rising affluence in the region has raised patients’ desire for choice and their ability to pay. Doctors’ aspirations have expanded as well. As for third-party partners including insurers, suppliers of equipment and therapies, the group provides a welcome conduit for growth.
Covid, Eng says, delayed completion of some hospitals. Quite apart from operational issues including strains on clinical and support staff, the pandemic also exacted a toll on patients’ health, many of whom could not travel for their chemotherapy.
Still, patients appear to have grown to appreciate the strengths of single-focus facilities post-Covid. “Our recovery has been good and quite fast. When we started, this concept was relatively new.’’
The Asian healthcare landscape tends to be dominated by general hospitals. Specialist facilities, however, offer a number of advantages. One is that they are likely to have equipment not easily available in a general hospital where the volume of patients may not justify the cost of purchase, says Eng. The ALTY Hospital in Kuala Lumpur, for example, has the country’s only weight-bearing or standing MRI, which allows imaging of a patient’s spine while he or she is standing or in a load-bearing position.
Another advantage is access to senior, specialist doctors. “Asia is still largely a doctor-driven society… If we had, for example, a top neurosurgeon, people would come for his or her expertise. We’ve been very fortunate to attract very good doctors who want to work with us.’’
Yet the group also needs to strike a balance between the interests of enlarging the business and catering to patients’ needs. “We need to be very careful in our patient selection. We may not be able to treat patients with many co-morbidities. They may be better off going to a general hospital.
“Our analysis has shown that the market for people with specific conditions that need treatment is very large. But it’s not for everyone. I would also say that (single-focus facilities) appeal to certain types of doctors. Some doctors like to work in a large multi-disciplinary hospital, so they can see all kinds of cases. We appeal to doctors who are very focused on a particular discipline.
“More importantly we want our doctors to work in a team setting.’’ This means a facility seeks to tap expertise in various sub-specialties of the heart, for instance. “This gives comfort to the patient that whatever condition they have, we have a diversity of views. For a spine surgery, for instance, we may have two or three surgeons working on a patient at the same time.’’
Assembling a team of respected doctors is often the first building block to get a facility off the ground. In TE Asia’s model, doctors are co-owners or equity partners, in contrast to most hospitals where doctors are employed. “When we consider a market, we try to identify the likely team players whom we can assemble as our core. In the beginning it was hard, but increasingly, doctors come and look for us. I believe they see the success of our model.
“I think the most important element of our model is the alignment of interests. Doctors want to do good work and I want to help them do good work.’’ A variety of payment schemes is available for younger doctors who initially may not be able to afford an equity stake.
When he began the groundwork to put TE Asia together, he was often warned that doctors are notoriously difficult to work with.
“There is a way to do it. Our best bet is to align doctors’ interests with ours. What are their pain points? The vast majority of doctors simply want to do good work. They want us to give them the support so they can do their work. They don’t like dealing with management or with insurance companies.’’
Part of the balance lies in creating a collegial, consultative approach to important issues like budgeting and decisions on major equipment purchases. “We try to create a hospital that doctors want to be part of. When we think about equipment, it’s not me saying we have a sweetheart deal with (a vendor). It’s a process of discussing what we need. Sometimes we play devil’s advocate. This equipment will cost you x, do you think it’s worth it? Because it raises patients’ costs, will we be competitive?’’
He says despite a smaller overall patient headcount, the volume of cases in specific specialties may surpass that of general hospitals. This makes TE Asia an attractive partner for equipment suppliers. Management also seeks to eke out operational efficiencies. “We think about standardising certain devices. This gives us an opportunity to work closely with the vendors, not just for better pricing but also to get training. We may help them enlarge the whole market.’’
Partnership also extends to other hospitals and doctors, particularly in terms of training and consultation. TE’s oncology centres convenes tumour boards, for instance, to create a forum for doctors to discuss challenging cancer cases. Doctors, oncologists and radiologists from the private and public sectors may participate.
“We partner with stakeholders, regulators, government hospitals and research. It’s one way to create a sustainable business.’’
Eng says he has two role models. One is his late father, a civil servant. “He didn’t go to university. But he instilled a strong work ethic, and more importantly, the sense of doing what’s right which has stayed with me.’’
A second is the late Lua Cheng Eng, former chairman of Neptune Orient Lines (NOL). Eng worked under Lua early in his career in the maritime industry. “(Lua) had the courage to take NOL onto the global platform when NOL acquired APL (American President Lines) in 1997. It was quite extraordinary.’’
“Lua was a man dedicated to building something. And he believed in human capital. He put a lot of energy into developing people and giving them exposure. I was one of the beneficiaries.’’ Eng himself became president of APL and helped to turn APL around during the 2008 global financial crisis. He left the maritime industry in 2011, spurred by the desire to do something different. He served as group chief operating officer of Fortis Healthcare International, which honed his interest in healthcare.
“I didn’t come from the healthcare industry. But in all my career I learned that the most important thing is to build a team. Get people with you, and don’t be afraid not to know something. You just have to learn.’’
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