Published April 22, 2009

Healthcare group to invest in new M'sian hospitals

Columbia Asia also plans to set up 14 more hospitals in India

By PAULINE NG
IN KUALA LUMPUR

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REGIONAL healthcare provider Columbia Asia plans to invest RM365 million (S$151 million) in six new mid-sized community hospitals in Malaysia, including one in Nusajaya in south Johor, scheduled to open this year.

Headquartered in Malaysia, Columbia Asia Group of Companies has 13 hospitals in the region - including five in Malaysia, India (four), Vietnam (two) and Indonesia (one) - and treats more than 50,000 outpatients a month.

In addition to the six new hospitals in Malaysia which are in various stages of construction, the company plans to build 14 in India. To-date, the group has invested about US$700 million in Asia, half through equity and the rest via debt issues.

Locally, it is in the midst of building four community hospitals around the Kuala Lumpur perimeter, as well as two others in Bintulu, Sarawak, and Nusajaya, and is considering a bond issue to raise financing as well as to retire some of its existing debt.

Singapore does not currently figure in its expansion plans because of high land costs, chairman of Columbia Asia Group Rick Evans said yesterday at a media briefing, but observed: 'We will have a hospital in Nusajaya five minutes from the (Tuas) bridge.'

Malaysia and India are attractive to Columbia Asia because of their large middle class, rule of law and wide use of English, he said. China? 'It lacks rule of law.'

Incorporated in 1996, Columbia Asia Sdn Bhd is 70 per cent held by Columbia Asia Group of Companies, and the balance by the state pension fund, the Employees Provident Fund. The local entity owns the Malaysian and Indonesian hospitals and gets a fee for operating Columbia Asia hospitals in Vietnam and India.

Although not as well known as some of the other private hospital groups in the country, the group's focus on mid-income patients and third-party payers - insurance companies and employers - has made it increasingly popular with those attracted to its model of short-length in-patient stay. Third-party payers now account for over 60 per cent of its revenue, which according to Mr Evans averages RM3 million a month per hospital, but excludes doctors' fees, which constitute 25-30 per cent of a hospital's revenue.

Companies like Columbus Asia are 'impervious to the economic problems' because of their focus on affordable healthcare, he said. 'Our designs are the result of our belief that hospitals in the 21st century are going to be much smaller than those built in the past, and that they would rely heavily on technology. There are more computers in our community hospitals than there are in-patient beds.'

The 80-bed hospitals are staffed by some 300 people, nearly all of whom are locals. As to how much cheaper its hospitals are compared to others, Mr Evans said doctors charge 75-80 per cent of the Schedule of Fees for procedures listed by the Malaysian Medical Association.

Of its 11 hospitals in Malaysia, one is a nursing and rehabilitation centre, located in Shah Alam, Selangor. Although its growth has been slower, he believes demand for extended healthcare facilities that offer longer-term services would grow in the future, as has been the case in the US.