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Raffles Medical might have gone regional but Covid war brings it back to the homefront

Amala Balakrishner
Amala Balakrishner8/7/2020 07:00 AM GMT+08  • 9 min read
Raffles Medical might have gone regional but Covid war brings it back to the homefront
Dr Loo Choon Yong, chairman of Raffles Medical Group, says he has never experienced a crisis like the Covid-19 pandemic in his half a century as a healthcare professional.
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Dr Loo Choon Yong, executive chairman of Raffles Medical Group, says he has never experienced a crisis like the Covid-19 pandemic in his half a century as a healthcare professional.

As part of the nationwide effort to fight the pandemic, Raffles Medical has redeployed a few hundred doctors and nurses to undertake other duties. These include conducting round-the-clock temperature screening at Changi Airport, swabbing of migrant workers at dormitories and caring for Covid-19 positive cases at community care and recovery facilities like the one at Changi Exhibition Centre.

“There were so many things to do and we were short of staff,” the co-founder of the 44-year-old medical group tells The Edge Singapore in a recent interview, adding that some of its doctors and nurses stationed in its hospitals and clinics abroad were brought back to support operations here. It has also stepped up
its recruitment efforts.

The action taken by Raffles Medical to assist the government in its fight against Covid-19 is part of its appointment as the designated medical provider. Aside from this, the group is also seeing through its Emergency Care Collaboration agreement signed with the Ministry of Health five years ago. The aim was to provide medical care for subsidised patients to ease the load on public hospitals and free up capacity,

These initiatives stemmed from experience gained by the government as well as healthcare groups in tackling health crises such as SARS in 2003 as well as H1N1 and MERS in the last decade. Of the three, Singapore was most affected by SARS which had spread rapidly across Asia. During SARS, Loo recalls there was total panic because the virus was deadly and spreading fast and there was limited knowledge about the disease.

Fortunately, H1N1 and MERS did not have the same impact as SARS: H1N1 was confined to the West while MERS occurred mostly in the Middle East. Still, the global medical community is now better prepared and equipped to combat these viruses and stop their spread. “Now we’re even able to capture a microscopic image of the virus to enable better detection,” explains Loo.

Singapore’s healthcare system too has learnt from previous pandemics and is now better prepared to handle such a crisis. Apart from better detection and treatment methods, public health experts now know the importance of contact-tracing as well as which safe management measures to implement in order to contain the spread of the virus within the community.

For Raffles Medical, it has stockpiled essential personal protective gear such as masks, gloves, gowns and face shields which were in short supply when the outbreak first started. The group now also advises corporate clients on precautionary measures and follow-up actions to take when a staff is found to have been infected with Covid-19.

Embracing technology

There has been plenty of talk about telemedicine by the local community of healthcare providers for years but Raffles Medical was one of the few to actively use when it launched its Dr World/Raffles Connect service last January.

However, as convenient as telemedicine is, Loo does not believe it can replace the need for clinics and hospitals and in-person consultation. Raffles Connect is mainly for patients with minor ailments like coughs and colds.
And some of them may even need to follow up with an in-person consultation if they exhibit other symptoms.

Loo does not expect telemedicine to be a serious revenue generator too. “It is not sustainable in Singapore where there is a clinic in almost every corner. The patients here are well- served so telemedicine has little potential to be a money-spinner,” he explains.

Once Covid-19 is kept under control and social distancing measures are lifted, Loo sees patients reverting to in-person consultations so they can get a thorough consultation, which leads to a more accurate diagnosis and thus, a more effective treatment.

Loo is not sceptical towards all types of digital healthcare technology though. One such initiative he finds promising is the Da Vinci Robot. Using the example of prostate cancer, Loo says the robot is able to remove the prostate, which is located in a narrow area, and then reconnect the urethra. The robot’s ability to reach areas
that the surgeon is unable to, allows for more effective and seamless surgery.

Different variations of Da Vinci can even be put to work as Singapore’s ageing population looks to advancements in medicine for more sophisticated and personalised services. “People live longer yet they aspire to stay healthy, look good and be fit enough so that they can climb mountains and take part in adventure sports,” Loo chuckles.

As a frontline medical professional, Loo has first-hand experience when it comes to using the latest technology. For instance, when he first became a doctor, arthritis of the knee was treated by injecting steroids into the inflamed area, he quips. Now, thanks to advancements in medical technologies, entire knees can be re-
placed. And more such developments can be expected as advanced medical science becomes more widely available and accessible, adds Loo.

However, all these come at a price: Higher medical expenses for patients. This includes R&D costs of developing the miracle drug that has to be amortised over the tenure of the treatment, Dr Loo explains. Excluding this, even rentals and labour costs are constantly rising, he argues. “We have a first-world healthcare system so we cannot expect it to be cheap.”

Part of the quality care here comes from having established professionals in the public sector, who are paid relatively more than their peers in other countries. Currently, about 50 cents of the healthcare dollar goes into the salaries of doctors, nurses, therapists and other professionals that are part of the ecosystem.

Regional expansion
With a reputation for providing good quality healthcare, Singapore has established itself as a medical tourism hub, attracting patients from far and wide — particularly the wealthier ones. Collectively, analysts estimate that treatments of these individuals account for 20–30% of the revenue of hospitals listed here. As such, these well-to-do patients tend to be significant contributors to hospital bottom lines “due to more complex cases and higher average bill size”, observes CGS-CIMB Research analyst Ngoh Yi Sin.

However, regional neighbours Thailand and Malaysia are fast catching up in the area of medical tourism while Singapore is experiencing a slowdown, notes Phillip Securities analyst Tay Wee Kuang. The reason, says Tay, is that instead of patients having to fly into Singapore for treatment, healthcare providers are expanding operations overseas to capture and serve growing demand outside the city state — the same way Singapore companies have expanded overseas to build a second wing.

Raffles Medical, for one, is betting big on China. Currently, it has a presence in eight Chinese cities including Hong Kong. Besides the flagship Raffles Hospital Chongqing and a chain of smaller clinics, it is also on track to open another big hospital in Shanghai, with fitting-out works and recruitment in progress. Meanwhile, it is renovating its medical centre in Beijing International Clinic. Upon its opening in 2H2020, the centre will offer minimally-invasive surgery that will complement its clinical services. Elsewhere across Asia, Raffles Medical also operates in three cities in Vietnam as well as in Osaka and Phnom Penh.

But even as Raffles Medical expands regionally, Loo believes Singapore will remain attractive to well-off patients.

Earnings take a hit
Following Raffles Medical’s announcement of its 1H2020 ended June results on July 27, analysts are maintaining a cautious stance on the company with RHB analyst Juliana Cai describing the results as being “infected by Covid-19”. Half-year earnings plunged 38.2% to $17.2 million, due to the deferment in elective surgeries and a dip in the number of foreign patients, particularly during the circuit breaker period. In China, it was hit by a smaller patient load at Raffles Hospital Chongqing and the closure of clinics due to the movement restrictions imposed there.

However, the decline was mitigated by a 6.8% growth in net profit of its healthcare services division to $124.6 million, following an uptake in activities such as air-border screening, swabbing of migrant workers, teleconsulting services and support rendered to Covid-19 patients at the Changi Exhibition Centre community care facility.

As at end June, cash and cash equivalents stood at $151.5 million, up from $100.8 million a year ago. Raffles Medical has declared an interim dividend of 0.5 cents a share, unchanged from a year ago.

Based on current conditions and barring unforeseen circumstances including the worsening of the Covid-19 pandemic, Raffles Medical is expected to remain profitable for the rest of the year.

Still, Loo’s mission is to make quality healthcare accessible to everyone, and to remain relevant for many more years to come. “We are already serving the fourth generation of families and we want to continue doing business with the same people,” says Loo.

As Singapore turns 55, Loo hopes healthcare providers from both the public and private sectors can work together as one to overcome the Covid-19 crisis and win back Singapore’s status as a medical tourism hub.

“Going through a pandemic is like going through a war — we must emerge stronger and more united,” he says.

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