This article by Jennifer Tan (left, Director, Research & Products, Equities & Fixed Income, at the Singapore Exchange) was published in SGX's kopi-C: the Company brew series on 21 April 2017. The article is republished with permission.
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Medicine or business?
"And I haven't looked back since." |
Business is often about timing and opportunity. The challenge is to recognise opportunity and be decisive, to act swiftly when a suitable occasion presents itself.
Value for Money
Venturing into the heartlands to set up clinics was also a deliberate plan. "If you only have a centrally located clinic, you end up competing with the majority of surgeons for the same pool of patients. The likelihood of attracting patients from the heartlands is low, because they invariably have the impression that you are expensive," he said.
"But when you have a presence in the outlying residential estates, your catchment area is much wider, and there's no one else in private practice who provides the same service. As a result, you can cater to patients who would otherwise be destined for restructured hospitals. Generally, we can streamline our service for patients to offer shortened waiting times."
Heah has since expanded his practice to five other locations - Bukit Batok, Hougang, Tampines, Farrer Park and D'leedon condominium. This year, another two centres with endoscopic facilities will open in the heartlands.
His motto is to offer patients quality healthcare at their doorstep. "In the heartlands, you can help more patients by being next door to them and offering affordable prices, particularly for those with tight budgets. All our centres are, or will be, MediSave-accredited, and we're in the panel of many major insurers," he added.
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- Dr Heah Sieu Min HC Surgical Specialists (Photo: Company) |
"Rentals are also cheaper, and it's easier to control your overheads."
Another advantage is that demand in the heartlands is more recession-proof.
"When a recession hits, foreign patients are usually the first to stop coming. While a central clinic location tends to capture a significant number of foreigners, when times are bad, you'll have to divide a shrinking pie amongst more specialists," he noted.
"In the heartlands, because patients can use MediShield and MediSave to pay for treatments, demand is more resilient."
In these outlying areas, building a facility capable of performing endoscopies, as well as minor surgical procedures, safely and seamlessly, can be challenging.
"There is a significant investment in manpower and cost because of strict Ministry of Health (MOH) licensing guidelines for such facilities," Heah added.
Ironically, a specialist's reputation in the heartlands rests on the success of his centrally located clinic, he pointed out.
"It's not good, image-wise, if you were to head straight to the residential areas without first setting up shop in Orchard Road, or Mount Elizabeth Medical Centre.
"Patients will tend to think you're based in the heartlands because you couldn't succeed in a central, competitive environment."
It's also important to strike a balance between running a business and helping patients. "You need to have a successful business in order to help patients - no one will come to you if you are not successful, measured by profits, of course," he said.
"On the other hand, if you're too successful, you're seen more as a businessman than a doctor, one who is more interested in profits than patient welfare. It's a thin line to navigate, but one every successful surgeon will invariably encounter."
This is best overcome by raising service levels, he added. "Ultimately, patients will visit you because you serve them well, at reasonable prices that are not available elsewhere. Many term this as good value for money."
| ♦ Boosting Capability | ||||||||||||||
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In September 2015, Heah founded HC Surgical Specialists Ltd with Dr Chia Kok Hoong, who was appointed the Group's Chief Operating Officer. The company, which derives its name from the initials of the founders, was listed on the Catalist board on 3 November 2016 via a placement of 30 million shares at 27 Singapore cents apiece.
HC Surgical has a current market capitalisation of over S$85 million. Its shares more than doubled on their trading debut, closing at 55 cents, up 103.7% from their IPO price. |
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Win-Win
But finding the right talent for the Group may be a challenge, as physicians by nature are hard to manage, Heah admitted. Some of that experience comes from managing doctors in his role as Commanding Officer of 1 Combat Support Hospital from 2008 to 2013, during his reservist days.
"I need to convince these doctors they are better off with the Group than being on their own - that it's the sum of the whole, rather than each individual alone, which creates a win-win situation," he said.
"I do this by creating a working environment conducive for them to obtain new business leads, which in turn will provide patients with quality, accessible healthcare."
Singapore as a medical tourism hub is also facing stiff competition as costs escalate.
"We're getting pretty expensive - rentals and equipment are pricey, while staff expenses continue to climb, and these tend to increase costs for patients. As a result, we are compared less favourably to our regional peers, even though the quality of care may be much higher," he noted.
"Therefore, cost management through efficiency and multi-tasking, together with well-trained and motivated staff, are crucial to the continued success of any company facing such challenges."
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- Dr Heah Sieu Min HC Surgical Specialists |
The city-state is maintaining its leadership position in the region for now, largely due to the stellar reputation of its doctors.
"The challenge is how do we maintain that reputation yet keep costs down. Once the region's medical centres get their act together, competitive pressures will accelerate," he added.
HC Surgical is also increasing its exposure in Asian markets. In January last year, it entered into an agreement with an independent party to provide consultancy and training services at the Transport Hospital in Hanoi, Vietnam.
The Group will also assist Transport Hospital in establishing a day surgery and endoscopy centre, where its specialist surgeons will have exclusive rights to perform surgical and endoscopic procedures for a stipulated period of time.
"Because Vietnam is less saturated than China, this market offers a lot more opportunities," Heah noted.
At the end of the day, it's all about daring to venture and making a difference.
"Do you have the guts to put your ideas into action? Whenever I hear 'It's not been done before, so you cannot do it', it's like waving a red cloth in front of a raging bull," he said.
"Something cannot be done only if it's illegal or truly impossible. Inconvenient or difficult are not the same as impossible, and therefore achievable. The question is at what price? Is it worth the endeavour? I faced this challenge in 2006 when I set up the endoscopy centre in Bukit Batok, because it had not been done before."
Passion is necessary for any entrepreneur to succeed, and one must be willing to take calculated - but not reckless - risks, he added. "Always do your feasibility studies, and don't plunge in blindly."
| ♦ Walk the Talk | |
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Having a heart for patients is another must. "The patient always comes first," he pointed out. "Do no harm, cure often, and comfort always."
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Financial results
| Year ended 31 May (S$000) | FY2016 | FY2015 | FY2014 |
| Revenue | 7,907 | 6,868 | 6,885 |
| Profit before income tax | 3,344 | 3,616 | 3,859 |
| Profit attributable to owners of company | 2,738 | 3,252 | 3,439 |
| Profit attributable (excl. lisitng expenses*) | 3,164 | NA | NA |
| Half year ended 30 November (S$000) | 1H2017 | 1H2016 | Change |
| Revenue | 4,281 | 3,853 | 11.5% |
| Profit before income tax | 99 | 1,588 | -93.8% |
| Profit attributable to owners of company | 104 | 1,267 | -91.8% |
*Excludes one-off listing expense of about S$0.43mln incurred in FY2016
NA: Not applicable
Source: Company data
| Outlook & Risks | ||
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HC Surgical Specialists Ltd
HC Surgical Specialists Ltd is a medical services group primarily engaged in the provision of endoscopic procedures, including gastroscopies and colonoscopies, and general surgery services, with a focus on colorectal procedures. HCSS, which listed on SGX's Catalist board on 3 November 2016, operates a network of clinics throughout Singapore. The Group is led by its founding specialist surgeons Dr. Heah Sieu Min (Chief Executive Officer) and Dr. Chia Kok Hoong (Chief Operating Officer), and supported by a team of experienced specialist surgeons and general practitioners. Common conditions treated by the Group include haemorrhoids, gallstones and inflammation of the gallbladder, hernias, colorectal cancer, stomach cancer and colonic diverticular disease. For more information, click here.
For its half year financial results ended 30 November 2016, click here.
The company website is: www.hcsurgicalspecialists.com.
The ccompany's Stock Facts page is here.
