Ralph Foster II, Vice President, Corporate Development, American Hospital Management CompanyMedical Travel Today (MTT): Tell me a little about your interest in the space and an overview of your company. Ralph Foster (RF): American Hospital Management Company is US-based in Washington, D.C. We are a hospital management company – our primary focus – whilst making use of various forms of CMMS software and we also do consulting. All of our activities are outside of the US. Our company has been around about 15 years, and in that time we’ve been active in 29 countries. Currently, we have about 25 projects going on around the world in different phases of development. Some of them are operational and some of them are in the beginning stages of design, development and financing. We originally started in the Caribbean and still have operations in St. Johns, US Virgin Islands. We also work with the government of Antigua, and have a hospital in Panama City that is under management with us for 13 years. It is a facility that has really come along very well in terms of successfully positioning itself in the market. They’ve gotten to the point where they’ve started doing transplants as well as robotic surgery. Also, they have multiple machines and are ramping up more business with insurance companies. We also have an operational facility in Egypt, just outside of Cairo. It was actually a turnaround project that was originally University Hospital, and subsidized by the University. They had an opportunity to double in size, but it also consisted of making the institution more self-sufficient, so they brought us in to manage the facility and basically turn it around. They currently have 150 beds, and I think they are going up to nearly 300. We still have an active contract in Saudi Arabia, which should be opening in the next couple of months – Al Qadi Specialty Hospital in Najran. It is a really nice facility that will definitely bring in a lot of clientele. MTT: With your operations worldwide, are you interested in activities as they relate to medical travel — with US patients leaving the country for care? RF: Medical travel, per se, is not really our focus. We are more interested in opportunities that relate to the rich and famous from around the world who used to access the US for quality healthcare services, and due to entry restrictions to alternate destinations, such as Canada, Europe or India. Today this market segment, as well as their local constituents of varying social economic classes, is demanding access to affordable quality healthcare locally. In addition, there is growing awareness of the need for tourists, which would include residents of the US, who get sick or have a healthcare-related emergency to have access to quality healthcare when they are traveling. Why? Because we have the technology, excellent healthcare centers, and professional nurses with know-how that has not been available in other countries. If these people happen to go to other countries, or if they live in the Middle East and are traveling to India or some other locations, our company can provide them with a market facility that is going to have the latest technology, access to the most highly skilled professionals in terms of physicians, nursing teams and auxiliary staff, and the delivery of quality services. When you have the resources, you can have access in Abu Dhabi to the same MRI you have in Houston. There are clients who want access to those services, but they have not been available. MTT: Are the hospitals also serving local populations? RF: Yes. This situation also gives us an opportunity to ramp up the healthcare services available to local populations in many parts of the world, which is something you are seeing in the Middle East right now. The royal families and a lot of leaders realize that healthcare services haven’t been provided at an adequate level, and they want to bring in the resources, the know-how and the expertise. We fall into the management aspects of this process, and our goal is to lead the way in terms of taking healthcare to another level and making it accessible to locals. MTT: Are there collaborative partnerships underway between US and foreign hospitals? RF: There are a lot of US hospitals that regard their true core business as the “Mother Ship hospital in the US.” They might set up facilities in other countries for various reasons, but one of the reasons is that it is a referral center for that hospital back in the US. They are simply taking the cream-of-the-crop patients – the ones that are going to be the most acute, the higher margins — and then they’ll return them to the US and deliver the care stateside. When you look at US reimbursement or government reimbursement, there are challenges. So whatever international business or international programs that are brought into the domestic hospitals, they are helping the hospital to generate an alternative revenue source. For us, we’re offering a local solution. MTT: When you say you work for the private sector, does this mean you do not work with foreign governments? RF: We prefer that our client is private or has an arrangement where the government isn’t the direct payer. Challenges with governments persist — there are issues with corruption around the world and we operate strictly above board. Additionally, many governments are typically slow payers or no payers. They run a facility but often don’t have the resources to project what is needed in order to make it effective, operational and profitable. And then there’s dealing with the civil servants — a much different mentality. It is more productive to work with a group that is investing in building a first-rate facility, and having the luxury of being able to recruit your own staff and to look at the high-profile people you are seeking to hire and train. These are key differentiators in the local level and deliver the type of service that patients expect. As a result, patient satisfaction is high and there is a higher quality of customer service. MTT: Do you see certain markets as more productive than others? Latin America? Central America? South America? Where do you see the most opportunity for building new hospitals? RF: Add on China and India. There is huge potential in those areas. And Saudi Arabia is going to be going through some major hospital development. The government has gotten to the point that they are giving people interest-free money to build hospitals, but Saudi is a very challenging market. You need to have a local sponsor or partner to set up shop, and it is a process to get into the market. We are really far along in the process because we have a strong partner in the market, and we position ourselves really well. The other area where there are a lot of challenges is in Libya. We get a lot of requests for Libya, but I won’t even get into the challenges of working in that environment. There are numerous government contenders, but we are more of a boutique management company and more selective in terms of our clientele. When we get into hospital projects, they span 10- 15- 20-year management contracts. At the end of the day, it is going to be a marriage. In order to have a successful marriage, you have to have common goals and a common vision, with everyone doing it for the right reasons. We do a very thorough job in terms of screening the projects and trying to make the right decision so that we can deploy the right resources. Our goal is to try and elevate these hospitals in the healthcare system. MTT: When you build these hospitals, do you also provide training? RF: Yes, definitely. What we normally do is, if a client says, “We’d like your help in developing a hospital, but all we have is just an idea of what we would like to do,” we proceed in several phases. The first phase is a feasibility study to determine if the hospital that is simply dreamed of is something that is going to work. If it is feasible, we will develop a business plan for it. MTT: Do you charge for those services to conduct a feasibility study? RF: Yes. From that point, if we move forward a great deal depends upon what the financial situation is. The owner might have some money in the project. There might be some investor money coming in. We’ve also worked with many banks and private equity and private banks to get the project financed. The second phase involves our engagement as a project management consultant to coordinate the roles and work with the designers, architects, constructors, and all of the different people who are involved in the project. This consulting and building work normally spans one and a half to two years. Approximately six months before the opening of the hospital, the pre-operations – phase three – begins. As phase three gets underway, our model is to work with the clients and identify someone who is going to be the CEO. Depending upon the client, the CEO might be someone with a US or British background, but typically CEOs are from the US. Of course, there would also then be an executive management team in place. Stage four is simply operations and management. MTT: Are there opportunities for you to utilize telemedicine in any of these settings? What is the model? RF: Absolutely. Our facility in Antigua does some type of teleradiology. The model and consulting services often depend upon the individual doctors involved. Many times what drives the relationship is where the doctor went to school! The other thing the model will account for is knowledge transfer ? because that is part of what our model believes in: to be able to share the knowledge, best practices, quality standards, and anything that keeps patients safe. MTT: Are there opportunities for the doctors in the US to provide services for those who are traveling abroad? RF: I will let you in on a little something. I can?t tell you too much, but we are working on a project where the concept is going to be to put the facility in a top resort destination and focus on state-of-the-art, minimally invasive procedures. We are coming up with the model where your providers are actually top-flight US, Canadian and European physicians. MTT: Would this be a resort that Americans would travel to or is it primarily for those not living in the US? RF: It is actually geared to Europeans, Middle Easterners and Africans. But I could tell you another model that would perhaps be appealing to Americans – look for a press release regarding activities with a group out of St. Kitt’s (Caribbean) to build a surgical center on a Marriot resort. It is going to be a small facility. I haven’t seen the details of the business plan, but I would imagine they are going to be doing some minimally invasive stuff, maybe plastics. MTT: How will physicians be compensated? RF: Regarding physician fees, a US physician can charge the same fee he or she charges here as down in Mexico. I used to know a physician when I worked at Methodist Hospital. He would frequently fly to Cancun to perform bariatric surgeries because the insurance may not have covered it here and it was a heck of a lot more expensive to do it here in the US. You could have the same doctor fly his team down there to do the same surgery in Cancun for 25 percent of the cost here. My honest opinion is the US healthcare system is not really a free market when you compare it to other industries that are influenced by global trends and competitive pressures. MTT: The international medical spa industry is growing. Is that part of your model? They are focusing on minimally invasive, usually aesthetic procedures, and are often connected to a hospital. RF: The more ambitious the projects, the more different types of things that you see. People are buying into the health and wellness environment, and it is all about the continuum of care too – not simply the tertiary level. Much larger projects are going to be exploring wellness and prevention programs. On the front end, these types of program keep people out of the hospital, but when they do need hospitalization they will remember the hospital’s name. So a lot of people are starting to think of more than acute care. This is especially true in a lot of countries that have a large, aging population. They are trying to integrate the idea of retirement communities or retirement homes with medical care. Integrating medical spas would be geared towards that market and the opportunity for enhanced lifestyles. MTT: So we are also talking about acupuncture, chiropractic and massage? RF: Sure. In a lot of other countries, you don’t have the regulations that you have with the FDA, so you might potentially have access to a treatment you don’t have in the US. You can go to another country to have it done and come back. I know a spinal surgeon that was doing some studies with stem cells. He was inserting stem cells in the spinal column to see if it would regenerate the spinal cord, but he wasn’t able to do it in the US. He would go to Monterey, Mexico, and provide the treatment. MTT: Do you think US hospitals are threatened by this trend? RF: From a global perspective I believe there are trends that could lead us in that direction. I’ve seen a lot of it and I think the US is losing business to other countries. For a long time, a lot of people thought foreign patients would buy international policies, which is like having AMX Platinum or AMX Black to be able to go anywhere they wanted to go. But now it is 20 years after the fact, and hospitals caught on that they could charge more money to those folks than they could to local patients. Some people took advantage of it but many didn’t. But then the game kind of got flipped because the insurance companies are now multinational, and they are tapping into US payer networks. As a result, hospitals are not making the margins on international patients that they did before. On top of that, let’s say you live in Aruba and you need robotic surgery. You call your insurance company and say, “I have the international policy and I want to go to Miami for surgery.” They reply, “If you want to go to Miami, it is going to cost you $10K out-of-pocket. But we have the same technology available elsewhere, and actually there’s a doctor who practices in Miami and is going to be available in Panama next week. He can perform the exact same surgery on you and the out-of-pocket would only be $2,000.” That is where you are going to be losing more international patients – especially as the consumers locally have to pay more out-of- pocket. They are going to be shopping around. MTT: The globalization of healthcare is where the action is going to be going forward. I would think that at some point your company might be interested in talking a little bit more about that. RF: Yes, but I’ll tell you the one thing that the US providers need to be wary of, at least the ones that are not going in with the right intentions: The word is out, and I learned this at Arab Health this past January, that medical imperialism is a reality. MTT: Wow – I like that term. That’s a new one. That’s a tough term. RF: It comes with a lot of baggage. I am half American and half Spanish – so I’ve seen both sides of the argument. I’m always American, but I can always see different perspectives because I’ve shared that other perspective. The comment was made at a very high level leadership meeting. In fact, the person who was running the show threw it out to the audience. I wasn’t at the meeting but a colleague of mine told me, “Can you believe this?” MTT: When you say you are half Spanish, what part? Is your family from Spain? RF: My Dad is American, Air Force, and my mother is from Madrid. He ended up doing three tours in Spain and I was born on the second run. MTT: I am working on some projects over there in medical travel. They want to get Americans to come to Spain. RF: I would! Spain has pretty good healthcare. About Ralph Foster II Mr. Foster has an M.B.A. from Our Lady of the Lake University and a bachelor’s in Business Administration in Marketing, with a concentration in International Studies, from Texas State University. He is a dynamic healthcare administrator with 15 years of experience in business development, where he has created the ability to positively impact an organization’s productivity, growth and quality outcomes. Mr. Foster has built various programs to accomplish international collaboration, physician alliances and various referral networks. He is a member of the American College of Healthcare Executives (ACHE) and served on the board of the South Texas Chapter-ACHE as their Student Affairs Director. He is bilingual in English and Spanish. Ralph Foster II, MBA V.P. Corporate Development AMERICAN HOSPITAL MANAGEMENT COMPANY 1776 I Street NW, 9th Floor – Washington, D.C. 20006 USA Email: [email protected] ” Skype: rfoster2.ahmc Website: www.ahmc.us.com American Hospital Management Company (AHMC) , is a Washington, D.C.-based diversified international healthcare system with a focus on the administration, management, and development of world-class hospitals and healthcare systems. Founded in 1998, AHMC has grown into the leading international hospital management and administration outsourcing company. AHMC provides integrated management services and total solutions tailored to the unique needs of hospitals and healthcare systems around the world. AHMC currently manages medical facilities and projects under development in various regions and countries of the world including: Saudi Arabia, Jordan, Egypt, Libya, Ghana, Russia, Antigua and Barbuda, St. Kitts, Trinidad and Tobago, Colombia, Ecuador, Peru and Panama. To learn more visit www.ahmc.us.com.
