IT has been open for more than nine years, but Pun Hlaing Hospital is yet to turn a profit for First Myanmar Investment’s shareholders The company’s management is betting, however, that an injection of US$10 million and a new philosophy on healthcare provision will bring the hospital a new – and profitable – lease on life.
While it has enjoyed a positive cashflow for the past three years through cost-cutting measures, the hospital has not generated a return for its shareholders since opening in 2005 due to the high capital investment.
Its location across the Yangon River in Hlaing Tharyar has never been one of its attractions. A bigger challenge is the tendency among wealthier Myanmar to seek treatment abroad.
In a June 2013 research report, specialist research organisation Thura Swiss said the hospital was “too expensive for ordinary Myanmar citizens …and not trusted by the wealthy class who continue to travel to other countries in the region for medical care”.
“As more international airlines move into Myanmar, the cost of travelling abroad is likely to decrease, creating an even more precarious position for the hospital,” the report said.
Now the hospital’s management is planning to invest heavily in healthcare, said Serge Pun & Associates (SPA) CEO Melvyn Pun in a recent interview.
Until this year, Pun Hlaing Hospital was 65 percent owned by SPA and 35pc owned by First Myanmar Investment (FMI).
In March, the Myanmar Investment Commission approved a partnership with the Indonesian company Lippo, which will initially invest $10 million, while FMI plan to invest a further $3 million for the remainder of 2015.
Both parties expect to invest substantially more in the coming years to expand their facilities. The partnership between FMI and Lippo will be a 60-40 shareholding, with FMI holding the majority.
Mr Pun said SPA was the managing agent and major shareholder of FMI.
“SPA’s role will predominantly be [to act] as the majority shareholder of FMI, while the major businesses and operations will be held by FMI. We do not intend for SPA to hold significant investments directly,” he said, adding, “Healthcare will be one of the four pillars of key businesses for FMI.”
FMI also plans to open more clinics, including at Mandalay and Bagan, as well as a 24-hour acute care and emergency centre in downtown Yangon.
Now the hospital is preparing to launch a new “on-duty model”, starting May 20, where patients will get the appropriate care from the appropriate clinician at all times of the day. Efficiency will be improved by reducing the hospital’s floor space from 20,000 square metres to 16,000, while at the same time increasing bed numbers by 100 to 165.
A tiered pricing structure will also be introduced to entice new clients, with prices ranging from $10-15 a night to about $200 a night for the “VVIP” category, while the cost of care varies case by case.
The new four-lane bridge that opened last November could also help entice more patients to make the trip out to Pun Hlaing.
The new chief executive of the hospital, Dr Gershu Paul, brings a wealth of international management experience. Born in Sri Lanka, educated in India, he worked in hospital management in New Zealand before spearheading the expansion of the Siloam hospital group in Indonesia, nurturing it from four hospitals with a combined $30 million in revenue in 2006 to 20 hospitals earning $350 million less than eight years later.
The challenges he faces in Myanmar are similar those in Indonesia, particularly the lack of human resources and heath facilities, he said in a recent interview at the hospital.
“Doctors are moonlighting in every hospital here,” he said of a practice that undermines continuity of care.
Some additional help could come from abroad, in the form of repatriating and foreign specialists. Dr Paul said he had regularly encountered Myanmar doctors throughout his career in high-ranking posts around the world. He has managed to lure many key specialists back, including in neurosurgery, orthopaedics, internal medicine, radiology, anaesthesia, emergency care and paediatrics.
Dr Paul has employed 14 full-time repatriate specialists and added two foreign specialists in intervention cardiology and plastic surgery.
“In the 1960s and 1970s, Yangon Medical School was the cradle of health education in the whole Asian basin – so much so that a Myanmar doctor could go to the UK and just practise without doing an exam,” he said.
But there are only about 25,000 practising doctors in Myanmar, or less than one for every 2000 people. There are also about 7000 specialists, most of which are centred in Yangon.
Dr Paul seems unfazed by the challenge he has taken on at Pun Hlaing, and says he believes Myanmar’s private health system will emerge from its shell far more quickly than the six or seven years it took Indonesia after 1999.
“The technology penetration will be much more rapid, I believe, and there will be opportunities for us to leapfrog … and develop in a much shorter period of time.”
Source: Myanmar Times