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FOCUSING ON HEALTH & CARE

Though a slowdown is staring down the economy, KPJ Healthcare is convinced that it has played it right to see through the downturn and come out stronger than ever.

17-11-2009

It has been said that there are some businesses that will continue to grow during times of economic uncertainty, and the healthcare business is definitely one of them. After all, even when the economy is down, people will still need to seek medical treatment. The challenge though for any private healthcare provider is to market and package its offerings so as to be as competitive as possible. The onus therefore is not just about price but about quality as well. As Malaysia's leading private healthcare organization, KPJ Healthcare is gearing itself up for the economic slowdown. Technology Business Review spoke to its Managing Director, Datin Paduka Siti Sa'diah, to find out more about the Group's plans during the slowdown.


KPJ Ampang Puteri Specialist Hospital



Always opportunities for growth
One thing that Datin Paduka Siti Sa’diah made dear to us is the fact that an economic downturn does not mean that opportunities for growth do not exist. On the contrary, there are perhaps more opportunities to do so during a recession, as the market is less crowded since more companies will be looking towards consolidation and contraction rather than expansion.
As she revealed, KPJ has had a strong history of building and expanding during recessions. After all, the Group started its first hospital in 1981, which was planned for during the recession of the 1970s. She told us that the rationale behind setting up KPJ were threefold - the first was to facilitate the industrial development of Johor, the second was to plug the brain drain of doctors leaving for overseas, and the last was to stop the  outflow   of foreign  exchange that was occurring because affluent patients were leaving the country to seek healthcare.

By and large, the response to that first hospital was very good. With the opening of the first hospital, the people of Johor had - for the first time - a quality private healthcare provider that was close to home. However, as Datin Paduka Siti Sa'diah admits, expansion beyond the state boundaries was not contemplated then.
That all changed however when the 1980s recession set in, and several hospitals were put on sale and needed rescuing. As such, the Group bought over Tawakal Hospital in 1988, followed closely with hospitals in Ipoh and Kuantan. Furthermore, during the same period, KPJ also acquired Puteri Specialist Hospital in Johor Bahru, and also
Always opportunities for growth
One thing that Datin Paduka Siti Sa’diah made dear to us is the fact that an economic downturn does not mean that opportunities for growth do not exist. On the contrary, there are perhaps more opportunities to do so during a recession, as the market is less crowded since more companies will be looking towards consolidation and contraction rather than expansion.
As she revealed, KPJ has had a strong history of building and expanding during recessions. After all, the Group started its first hospital in 1981, which was planned for during the recession of the 1970s. She told us that the rationale behind setting up KPJ were threefold - the first was to facilitate the industrial development of Johor, the second was to plug the brain drain of doctors leaving for overseas, and the last was to stop the  outflow   of foreign  exchange that was occurring because affluent patients were leaving the country to seek healthcare.
By and large, the response to that first hospital was very good. With the opening of the first hospital, the people of Johor had - for the first time - a quality private healthcare provider that was close to home. However, as Datin Paduka Siti Sa'diah admits, expansion beyond the state boundaries was not contemplated then.
That all changed however when the 1980s recession set in, and several hospitals were put on sale and needed rescuing. As such, the Group bought over Tawakal Hospital in 1988, followed closely with hospitals in Ipoh and Kuantan. Furthermore, during the same period, KPJ also acquired Puteri Specialist Hospital in Johor Bahru, and also built the Ampang Puteri Specialist Hospital     and     the Damansara Specialist Hospital.
And so the pattern continued in 1998, during the recession of that period, when hospitals in Bukit Mertajam, Damai, and Kota Kinabalu were acquired, as well as the Selangor Medical Centre and Sentosa Hospital. As such, Datin Paduka Siti Sa'diah emphasized that there is always opportunity even in recession.
Without a doubt, the most attractive feature of KPJ Healthcare is the fact that it is seen as the leading focused healthcare company in Malaysia. As such, it has been able to garner the respect of stand-alone hospitals which see the benefit of associating themselves with the Group.
At the same time, the size of KPJ Healthcare allows it to further expand and upgrade its hospitals at a far quicker pace than stand-alone hospitals. As Datin Paduka Siti Sa'diah explained, "When we buy, there is always potential for growth." Thus, when KPJ buys over a hospital, it invests heavily in its operations.

And there are, we are told, many occasions when massive investments had to be made so as to bring the newly acquired hospital up to scratch. Datin Paduka Siti Sa'diah shared, for instance, that she is shocked that some hospitals were so thrifty with spending that little to nothing was spent on training and the upgrading of facilities. Having said that, she also gave a mitigating factor in the fact that stand-alone hospitals are costly to run and maintain, as such -once again going back to a previously stated point - being associated with KPJ allows them to reach the bottom-line even faster.
While joining KPJ allows hospitals to be associated with a renowned healthcare brand, the Group also benefits from the acquisitions. For one thing, it is able to expand its already excellent team of very professional doctors and nurses, as well as to add new customers. As Datin Paduka Siti Sa'diah explained, the expansion of the professional base is very important because they help facilitate training of other staff. Thus, mergers and acquisitions are all about adding value to the Group.
As we face another recession in 2009, KPJ Healthcare is looking once again at more mergers and acquisitions. Datin Paduka Siti Sa'diah clarifies however that once KPJ takes over a hospital, it wants to have the majority share so that it can help drive the business. Such a stipulation is highly understandable. After all, if a hospital wants to be associated with the KPJ brand, then it should be willing to synergise itself with it.


Datin Paduka Siti Sa'diah Sheikh Bakir.



Defining the KPJ brand
What though is the KPJ brand, or rather how does one identify a KPJ hospital beyond that of a common logo? The branding exercise for KPJ started five years ago, and Datin Paduka Siti Sa'diah also revealed that she is working towards getting more KPJ hospitals accredited by the Malaysian Society for Quality in Health (MSQH) as well as the International Society for Quality and Health (ISQH). To date, KPJ has 5 hospitals already accredited by MSQH, which are KPJ Johor Specialist Hospital, KPJ Ipoh Specialist Hospital, KPJ Ampang Puteri Specialist Hospital, KPJ Damansara Specialist Hospital and KPJ Selangor Specialist Hospital.

For Datin Paduka Siti Sa'diah, it is vital that processes and procedures are monitored and followed to carefully. Ultimately, she wants KPJ hospitals to be seen as caring, safe, and ethical, and that KPJ is seen as a responsible corporate citizen.

This therefore will help KPJ create an identity for itself as a healthcare provider with hospitals that are focused on patient safety. This commitment will also be further seen when new hospitals are built, which will be ready to be accredited. Ultimately, all this works towards enabling KPJ to fulfill its mission and vision statements which are to deliver quality healthcare and to be the preferred provider in healthcare services.
She also shared that she was pleasantly surprised when she heard that the Group's latest hospital has been referred to by people as the KPJ hospital. This is significant because many - if not all - of the Group's hospitals are referred to with names that do not have KPJ in them - for instance, KPJ Ampang Puteri Specialist Hospital and KPJ Damansara Specialist Hospital. As such, one of Datin Paduka Siti Sa'diah's goals is to have the word KPJ in the names of all its hospitals, so as to portray a common identity and a common value.
That common value is that KPJ's hospitals are seen as places that care, which is reflected in the Group's tagline - "Care for Life". In other words, customers know that they will be cared for in a KPJ hospital.
One example which was given to us was the launch of the Seven Patient Safety Goals, where the medical professionals were reminded on the importance of eliminating problems such as wrong patient identification, wrong treatment, and to improve efficiency and communication amongst others. This is important because it shows that KPJ acknowledges that these problems do exist in the medical services sector, and that they are working towards solving them. As such, customers have the peace of mind in the knowledge that the hospitals are looking out for their (the customers') best interests.
For Datin Paduka Siti Sa'diah, it is vital that processes and procedures are monitored and followed to carefully. Ultimately, she wants KPJ hospitals to be seen as caring, safe, and ethical, and that KPJ is seen as a responsible corporate citizen.
As such, she is extremely proud that KPJ Healthcare was one of the winners of the inaugural Star Biz-ICR Award in the Marketplace category in 2008. She described it as an important achievement, not only because it was an inaugural award where they were grouped alongside several large MNCs, but also because it acknowledged KPJ's efforts in making healthcare affordable and accessible to all, as well as reaching out to the public through different channels of care.
And the best examples of KPJ's commitment to social responsibility are its eight charity clinics, otherwise known as Klinik Waqaf An-Nur. These clinics offer medical treatment and medicine for just RM 5, and also charge a nominal amount for dialysis. Furthermore, unlike other dialysis centres, the ones at these clinics are fully run by doctors. All in all, over 400,000 patients have made use of the services that Klinik Waqaf An-Nur provides.


Investments in the best medical equipment have enabled KPJ to provide the best quality care to all, starting from its youngest patients.



KPJ as a corporate identity
Datin Paduka Siti Sa'diah was justifiably proud to tell us that in a recent session with a consulting professor on KPJ's vision, mission, and strategy, the Group was told that there was no need for them to change anything. This is significant because KPJ was the only organisation that he had said this about, and he has - we are told - consulted some of
And the best examples of KPJ's commitment to social responsibility are its eight charity clinics, otherwise known as Klinik Waqaf An-Nur. These clinics offer medical treatment and medicine for just RMS, and also charge a nominal amount for dialysis. Furthermore, unlike other dialysis centres, the ones at these clinics are fully run by doctors. All in all, over 400,000 patients have made use of the services that Klinik Waqaf An-Nur provides.
the leading companies in Malaysia. As such, it is testament to KPJ's strong corporate fundamentals that has enabled it to become the top rated private healthcare provider in the region.
The success of the Group as a corporate entity can be seen through its corporate values, which are safety, courtesy, integrity, professionalism, and continuous improvement. It is also further reinforced by the business and clinical governance models which have enabled it to grow.
She told us that the business model with the doctors is one that is good and unique. For one thing, all doctors at KPJ hospitals have to be fully resident, and that all accounting, management, and patient management are done by the Group rather the hospital. In other words. This frees up the doctor to concentrate on the important task of providing treatment to the patients.
The clinical governance structure is also an important contributor to KPJ's success. Here a team of doctors give advice to the group on what to do in terms of creating and implementing policies as well as on aspects such as clinical management. It should also be noted that, as Datin Paduka Siti Sa'diah explained, there are constant discussions on how to improve quality, as well as assessments and analysis all the time.

She was also happy to point out that the doctors are active participants in these discussions to help improve KPJ, even though they may not be paid by the Group directly but by their customers/patients. In other words, it shows that they too have an interest in helping the Group become the best that it could be.
Of course, at the end of the day, in order to ensure quality healthcare, the Group needs to be financially sound. As such, the setting up of the Al-'Aqsa REIT - which was the first ever Islamic REIT in the world - has helped KPJ in its cash-flow. This has thus been reinvested in terms of upgrading facilities and equipment. Datin Paduka Siti Sa'diah also revealed that one of the advantages that KPJ has is the fact that when purchases are made - such as for equipment and medication - it is bought in larger quantities, thus allowing the Group to enjoy economics of scale.
Looking at the situation in the year ahead, Datin Paduka Siti Sa'diah admits that the economic situation is challenging. However, it should also be noted that people still need medical treatment and KPJ stands ready to provide them with quality medical treatment. Having said that, she revealed that the Group also plans to concentrate on highlighting promotive or preventive medicine instead of just curative medicine, where it would help to raise awareness about lifestyle and certain diseases. Furthermore, she also hopes to organise conferences to talk about certain diseases as well as to showcase KPJ's best practices that will establish a KPJ way of doing things in the healthcare management fraternity.


The KPJ tagline "Care for Life" is reflected in the conscious efforts by all its staff- from executives to service personnel.



Looking towards the future
At the end of the day, although healthcare may be more resilient from a recession, it is not entirely recession proof. There still needs to be proper management and strategies in place, otherwise it too will suffer. And this is what Datin Paduka Siti Sa'diah and her team and KPJ Healthcare are setting about doing - providing the framework that will enable the Group to ride out the storm.
 
When asked about the plans for the future, she told us that she is hoping to make some new acquisitions. This, she said, is the best time to build hospitals and to tender because there is less competition. As such, the Group has already identified a few sites and once the recession is over, it will be ready to put its plans into action. She also told us that another goal is to further expand the brand, particularly in the Middle-East, where it already manages two hospitals in Jeddah, Saudi Arabia, which have helped raised its profile in the region.







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