PPPHealth4All Persona – Julien Beaujolin, CEO and Founder, ECMP

We are pleased to welcome our next PPPHealth4All Persona –  Julien Beaujolin, the CEO and founder of ECMP, a healthcare operating firm providing solutions to bridge the healthcare delivery infrastructure gap in South East Asia. Since inception 5 years ago, he focused on partnership with public and private hospital to deliver cardiac Cath-labs, diagnostic imaging and soon oncology services across Indonesia. Julien has an exceptional drive and interest to improve healthcare delivery systems. He believes they should improve the well-being of the communities they serve by making services available, accessible, affordable, and of good quality. Before founding ECMP, Julien was managing director of a South-East Asian medical equipment distributor and started his career in asset management in Switzerland.
 
Main lesson from healthcare PPPs in South-East Asia
If there’s any lesson from this pandemic, it’s that we need much more robust and equitable health systems.
 
Improving the quality of care by making it affordable and accessible is a paradox our world faces. However, the challenge of funding healthcare and bringing high-quality healthcare at affordable prices could not be more acute than in emerging economies, particularly in Asia, home to more than 50% of the global population.
 
The Government will need to expand primary and secondary healthcare capacity and partner with private operators and investors for tertiary services. Private capital will contribute even more significantly to the expansion of care required to achieve universal healthcare coverage (UHC). It is essential to increase the efficiency of healthcare, meet the capital needs for new and upgraded infrastructure, and reduce the strain on public resources.
 
By working with Governments, private capital will contribute to more significant health systems goals. More involvement through public-private partnerships will significantly augment public sector efforts and strengthen the Government’s service delivery.
 
Key aspects from our experience of building a healthcare delivery platform in Indonesia:
 
  • To ensure a levelled playing field, the Government must, i) have the capacity to manage and supervise long-term contracts, ii) ensure and enforce clinical quality and performance standards.
  • Foreign clinician exchange must be facilitated to enable easier access to training capacity and best practice exchange.
  • The low trust between the public and private sectors have to be accounted for and addressed.
  • Compared to other SEA countries, patience is critical in Indonesia; things take time. Partly due to cultural reasons and also to a daunting regional and national bureaucracy.
  • By offering turnkey managed care solutions to hospitals, we eliminate a potential source of red tape which can come with big-ticket medical equipment’s.
  • Long term, 5-10-year tax incentives for all health PPP would drive more capital towards this asset class.
Access to permanent capital
To improve healthcare delivery and access to care, numerous capital-intensive and fast- growing healthcare businesses need financing beyond the average fund life to reach scale and its full potential. This leads to a mismatch between fund and asset lifespan as most vehicles are closed-end funds.
 
Given an average fund life of 6-8 years and an investment period of 3-4 years, the average holding period for investments is 3-5 years. However, certain assets, such as healthcare infrastructure, particularly where greenfield development is involved, require a long lead time (7+ years) before they reach a point in their lifecycle to be efficiently monetized.
 
A permanent capital vehicle scales access to long-term capital by providing a structure attractive to a broad universe of investors. It unlocks private financing for businesses allowing them time to reach scale.
 
Permanent capital strategies are not new. We can argue it’s one of the oldest strategies around. For decades, assets in families have often been concentrated in permanent vehicles such as family businesses, land holdings, trusts, etc. However, in today’s investment practice, which focuses on year-long performance periods as a benchmark, less attention is given to permanent capital strategies.
 
For ECMP to access a broader and deeper pool of capital and ease regulatory, compliance and structure concerns, we are working towards a listing Q1 2022.
 
SDGs and impact investors
As a healthcare operator, we seek to make a meaningful impact on society by improving access to affordable quality healthcare for underserved populations.
 
We believe that responsible investment and operations are critical to sustainable long-term value creation in Asia, and “doing well will only be possible by doing good” as they are not only compatible but mutually reinforcing.
 
Over our recent history, we have, for example, diagnosed and treated 21’000 at our 18 centres in partnerships with the public and private hospitals across Indonesia. Moreover, 95% of the patient are lower / middle income under UHC.
 

However, our experience and interactions with SDG funds were disappointing from an impact perspective. In our view, a majority of them are greenwashing. As with any other investors, the only metric analysed and considered were financial returns.

Financial performance is critical for the sustainability of any investment in the healthcare delivery space. However, patient capital is vital, especially with greenfield projects, as the road to profit and value creation is longer.
 
Value creation for hospital’s partnership
Collaboration and partnerships are essential in any business. In healthcare, they are critical as it’s impossible to succeed alone.
 
Value creation first comes from our team members who are dedicating themselves to provide the best environment of care for our patients and ensure the success of each of our hospital partnerships.
 
Secondly, value also comes from our third-party partners that support our center’s successful operation: consumables suppliers, equipment manufacturers, and technical services providers.
 
This ecosystem enables us to operate and deliver a qualitative and safe environment of care to our patients. Usually, if you provide the above, profit takes care of itself.
 
Healthcare delivery models
Across Asia, especially India, models that substantially lower the cost of healthcare without compromising clinical quality have emerged to satisfy significant unmet medical needs.
 
The principle behind those care models is to employ economies of scale and specialization to slash healthcare costs.
 
Several characteristics that drive access to care, improved quality, and efficiency have been identified:
 
 
These characteristics can help healthcare systems meet the needs of their populations more effectively and deliver significant improvement in the quality and affordability of care. The phenomenal future for healthcare delivery systems is that many models have been proven to make a difference. The challenge is to implement these strategies with capital and talent.
 
Executing investment in the healthcare delivery sector
In Asia, opportunities are about building businesses and driving young companies who need capital and expertise. As such, investors must get involved in operations and focus on adding value to be successful. In-depth industry expertise and experience are critical to achieving higher efficiency, promoting governance, and creating new business opportunities.
 
In Indonesia, ECMP has built a solid operational structure with healthcare expertise to support project management, technical maintenance, IT, sales & marketing, finance, human resources, and clinical services. Building our platform was a significant investment but key to creating value for our business.
 
With such oversight on operations, it reduces the risk for the company and our shareholders. In return, this level of transparency encourages good governance. Addressing risks and making a positive societal impact is good management practice and will deliver higher returns.
 
Ultimately, vision without execution is a hallucination.
 
Interview by Natalia Domanska

Request for Qualifications for Kingston General Hospital Phase 2 Redevelopment

Infrastructure Ontario and Kingston Health Sciences Centre have announced request for qualifications for teams to design, build and finance the Kingston General Hospital Phase 2 Redevelopment project. Shortlisted teams will be invited to respond to request for proposals, which is expected to be released in late 2022.

Interested companies can download the RFQ at Merx and submit their responses until October 11, 2021.

The Kingston General Hospital will be located on the territory of the Kingston Health Sciences Centre’s site. The redevelopment will include the demolition of aging buildings and wings, the renovation of existing spaces, and the construction of a new 12-floor patient tower.

The project will be designed to meet the Canada Green Building Council’s Leadership in Energy and Environmental Design (LEED) Silver standards. The hospital will be consistent with the Ministry of Health’s high standards for patient and family-centered care, incorporating principles of senior-friendly design, accessibility and infection prevention and control.

Source: Infrastructure Ontario, merx.com

Ghana Launches the Construction of 111 Hospitals

The government of Ghana has secured US$100 million fund through the Ghana Investment Infrastructure Fund for the implementation of so-called ‘Agenda 111’ to build 111 hospitals across the country to bridge the health infrastructure deficit in the country.

The plan involves the construction of the new healthcare facilities including 101 district hospitals, two psychiatric hospitals, seven regional hospitals, and the redevelopment of an existing psychiatric hospital in the capital city of Accra.

Adjaye Associates firm, responsible for design, has recently revealed the design of the first hospital. All district hospitals will follow roughly the same design. However, each will be highly adaptable to meet the unique geographic conditions of each individual setting.

On 17th August 2021, Ghanaian president Nana Addo Dankwa Akufo-Addo was present at a sod-cutting ceremony at the site construction of the Atwima Kwanwoma District Hospital to kick off the official launch of Agenda 111 which will  “lead to Ghana becoming a Centre of Medical Excellence and a destination for medical tourism.”

“It is envisioned, under a public-private partnership, that the Ghana medical corps, a volunteer corps of medical specialists which will tap into the skills and resources of Ghanaians and non-Ghanaians locally and abroad, using IT and telemedicine to support the delivery of health care and training, will be established by 2023,” the president of Ghana stated.

Sources and picture: the official website of President of Ghana, Adjaye Associates

Grupo Puentes was awarded to build the Roquetas de Mar Hospital in Spain

The Andalusian Health Service selected a spanish company Grupo Puentes and construction company Lirola to build the new High Resolution Hospital of Roquetas de Mar for 18 months execution period.

The new hospital will occupy about 16,300 m2 and will respond to the needs of more than 100,000 inhabitants. 

The hospital with a proposed bid for 29 million euros, will include heliport for a smooth arrival to the emergency, outpatient and radiology services, a surgical block and a multipurpose hospitalization area with a large central courtyard and distribution to serve both patients and visitors.

Press release: Europa Press, The Andalusian Health Service. Photo credits: Cadena Ser.

Request for Qualifications for Clinical Support and Research Centre in Canada

Canadian healthcare provider Providence Health Care invites interested parties to submit Request for Qualifications for the new Clinical Support and Research Centre (CSRC) in Vancouver. Deadline for submission – September 20, 2021.

The CSRC will consist of a three-building fully integrated campus facility including wet lab, vivarium, innovation, incubation, medical and office spaces. Over 630,000 m2  campus is planned to be completed in the first quartal 2027 and will be situated directly to the new St. Paul’s Hospital

Locating such research center with outstanding researchers directly next to the new St. Paul’s Hospital will stimulate the integration between scientific discovery and clinical service delivery.

Image by the new St. Paul’s Hospital.

 

PPPHealth4All Persona – Dr. HM Goh, Executive Director, TAEL Partners

We are delighted and privileged to welcome our PPPHealth4All Persona, Dr. HM Goh, Executive Director of Singapore-based TAEL Partners private equity. With over 20 years of international experience in hospital management, transformational leadership, private equity and venture capital investments in Asia, Dr. Goh aspired to develop an ASEAN-focused healthcare platform integrating medical, pharma, medtech, and education sectors.
He is a true believer in the power of PPPs in healthcare and its most passionate advocate.

More and more developing countries have started to look at PPPs in healthcare, next in line after infrastructural projects like roads, ICT, or water treatment facilities. How can they ease the pain of the most critical stages of PPP healthcare projects?

Firstly they should look at a country’s regulatory framework (e.g. some countries already have some form of PPP law), and whether there was prior government experience, and track records of PPP in other sectors.

However, remember that healthcare PPPs are critical to have the so-called “software” part, a human aspect, that sets them apart from a typical infrastructure PPP which has a prominent component of “hardware” element.

We also need to be extremely mindful of a country’s political dynamics because PPP inherently will have quite significant political risks and exposure that impacts the project. Some projects are fast-tracked for political reasons such as election cycles or political tenure. Some projects were hijacked along the way or “adulterated” into a permutation of the original intent. And occasionally it might even look completely different compared to the projects’ initial designs. In some countries, government bureaucrats are rigid and inflexible and apparently too scared to make bold decisions and take accountability. And of course, there are always risks of corruption (e.g. cronyism, nepotism, “kick backs” etc.), market dynamics change, technological obsolescence and incumbent “vendor lock” situation.

Secondly, be selective about whether a project is suitable for implementation using a PPP format, special consideration must be given to its structure, and governance framework. We noticed many governments tend to over specify, overcapacity and over-build and this is further compounded by the tendency to enter into an addressable market too early. An example will be constructing an oversized hospital in an emerging catchment prematurely, resulting in low occupancy during the formative years of the project. 

Be cautious over projects that transcend into two political cycles, that usually will adversely affect the project implementation and payment timeline. 

Last but not least, a detailed, methodically and meticulously performed due diligence is critical. And a well designed market feasibility study and quality data points will mitigate those risks and challenges I described earlier.

How to use the tremendous potential of data to build a strong foundation for long-term partnerships?

Prior experience with PPP among stakeholders (i.e. project owners, users, consultants and advisors) is a critical success factor. References to case studies (data, reports, benchmarks, site visits) are extremely useful, as these are important lessons learned and knowledge base that can shorten the learning curve and minimise the project risks. 

Notable success case studies in ASEAN can be found in Singapore, Malaysia and Vietnam. Although the insights to these projects can be limited partly due to disclosure restrictions (e.g. Official Secrets regulations and NDA) but it can sometimes be available via conferences and scientific publications. Or PPP fraternities can have more informal candid dialogues via PPPHealth4All or other similar platforms where experience can be exchanged for the benefit of the industry.

It helps to “prime” the public stakeholders, get them prepared. But first, you need to enlist those project management savvy and committed ones into the project.  People tend to make project plans, budgets, scope of works that the project steering committee approves. It is not uncommon for us to see end-users and frontline clinical representatives were omitted from the committee – especially the nurses.

Different stakeholders will have different expectations, dynamics and implications due to the project. “What’s in it for me?” is probably the most important question to explore during the project stakeholder analysis exercise. This will guide us on how to realign all stakeholders towards a common set of project goals. And ensure that we will select, interact, engage and galvanize the right team right from the start.

Part of the gap analysis exercise. Be upfront about the need to “reconcile” the public and private corporations with respect to the organisational culture, processes, procedures and policies. You need an experienced project lead, well-prepared mentally, who reacts fast and resourcefully. At the same time, has transformational leadership qualities (i.e “change management”) and credibility to influence various stakeholders to embrace organisational change.

He/She must constantly re-strategise and manage the delicate balance between the two driving forces and frameworks namely corporate and clinical governance, championed by the Board of Director and Medical Board respectively.

The worst thing that can happen is allowing “identity crisis” to permeate into the project because of a conflict of corporate culture within public policy and private enterprise regulations. 

Can proper PR strategy, visibility, and marketing campaign help?
Definitely, strategic communication is an important strategy to manage expectations, aligning interest, galvanising stakeholders and communicating purposes and benefits of a socially impactful projects. However, this is increasingly becoming more challenging due to the democratization of media  and information. Fake news, leaks, misinformation are a threat to PPP projects if left unmanaged. Especially, like any large scale projects, there are bound to  have challenges and whether we can address it before it gets amplified and distorted in the social media.

How to put into practice opportunities for genuine PPP healthcare
partnerships opened up by COVID?

First of all, it is in everyone’s interest to mitigate the widespread impact of the pandemic.

We all have been going through a deep learning and very visceral experience. We can compare it to the postwar world and hope that we’ll reform and won’t forget what we learned. Post pandemic healthcare will reform and transform – geopolitics, management systems, hospital design and basically everything in how we operate healthcare operations. (i.e. infection control regulation, supply chain management, manpower, cost structures etc.)

COVID-19 catalyses PPPs and galvanises the spirit of collaboration where different stakeholders swiftly realign towards common goals. We look beyond our differences, policy constraints and come together and find ways to collaborate to fight against a “common enemy”. We have seen unprecedented speed of responses, especially in the deployment of capital and resources. In pandemic crisis mode, projects have accelerated into “operationalisation” without the traditional contracting nuances, unnecessary micromanaging, legal complexities and jargons and painful bureaucracy. PPPs have become very fluid and adaptive. And interestingly we also see an emergence of a new element that enhances the PPP model. PPP in COVID times is PPPP (4P) Public, Private, Philanthropy Partnership, enhancing the value of PPP with good will. Healthcare, being a social enterprise, is always PPPP. 

Interview by Natalia Domanska.

AMP Capital acquires additional stake in the Royal Adelaide PPP Hospital

AMP Capital’s Community Infrastructure Fund has successfully acquired an additional 9.95 %  in the Royal Adelaide Hospital reaching its total interest to 27.21 %. 

The acquisition precedes the recently completed AUD$2.2 billion refinancing of the PPP which was posted earlier on our platform.

The 800-bed Royal Adelaide Hospital, delivered as a public-private partnership with the South Australian Government, is one of Australia’s most advanced hospitals and energy-efficient medical facilities. The hospital is operated by SA Health and combines clinical services, training and research facilities to deliver high quality and complex patient care.

AMP Capital Managing Director – Origination Scott Markwick said: “The acquisition continues CommIF’s successful strategy of acquiring interests in high-quality assets and follows the Royal Adelaide Hospital PPP’s successful $2.2 billion refinancing last week.”

Press release and image by AMP Capital.

Philippines Announced Two Healthcare PPP Projects “to Boost Access to Top-rated Medical Facilities”

The University of the Philippines – Philippine General Hospital aims to its ambitious plan to expand medical services by building new Cancer Center and a world-class 700-bed hospital. Both projects are a part of the government’s line-up of critical healthcare projects under PPP scheme, providing world-class medical facilities especially for vulnerable citizens. 

The first project is the Cancer Center with 200 to 300-bed, will be located in the Philippine General Hospital Manila and will be the first dedicated cancer hospital in the national capital region. The hospital will provide affordable and international quality cancer treatment for public and private patients as well as support for teaching and research activities. The Cancer Center will be equipped with surgical oncology operating rooms, diagnostic imaging and laboratories with multi-specialty outpatient care. 

The second project is Diliman Project, a world-class 700-bed hospital with integrated healthcare, teaching and research facilities and specialized services that are not usually available in other public hospitals.

Both projects are undergoing National Economic and Development Authority (NEDA) Investment Coordination Committee evaluation and approval process. 

Image credits and press release by PPP Center of the Philippines.

Australian Royal Adelaide PPP Hospital Received the World’s Largest Sustainability Loan in the Healthcare Sector

Royal Adelaide Hospital has received the world’s largest Sustainability Loan in the healthcare sector and the largest project finance Green and Sustainability Loan in Australia. The USD1.64 billion transaction achieved by consortium of 18 banks is the largest green loan for a PPP in Australia to date.

The hospital is a public private partnership between Celsus and the South Australian Government.  Royal Adelaide Hospital was the first large-scale hospital complex in Australia to achieve a 4 Star Green Star – Healthcare ‘As Built’ rating from the Green Building Council of Australia (GBCA).

Press release and image by AMP Capital.

Kazakhstan Aims to Build 20 New Multipurpose Hospitals under PPP Framework

Kazakhstan implements new standards for health infrastructure in its ambitious program of building 20 new multipurpose hospitals in the framework of the public-private partnership model.

4 out of 20 hospitals will be built under leading medical universities of the country, providing an integrated approach to science, education, healthcare and increasing efficiency of the clinical trials.

One of such hospitals will be United University Hospital at Medical University of Astana, with 800 beds and will comply with JCI international standards. The hospital will have inpatient and outpatient facilities, a consultancy and diagnostic center, a research and development laboratory, a clinical laboratory and classrooms.

Image credits and press release: Official Information Source of the Prime Minister of the Republic of Kazakhstan