Though we are in an era when the U.S. government may seem to be pulling back from global engagements – political, social and even commercial – this may be an opportunity rather than a hurdle for the private sector. We must keep in mind that the government and the marketplace are two quite different spheres. America has vibrant, leading private sectors, quite simply offering the best available resources and output: defense, aerospace, education, energy, and perhaps most of all, healthcare. We in the U.S. – that is, academic and research institutions, providers, clinicians, practitioners, and administrators – are the worldwide leaders in healthcare. There is an increasing need and as importantly, demand, for the very best healthcare from every corner of the globe. We have it, and quite literally, the world wants it. Markets seek products. Need means opportunity.
“…development assistance for health, if suitably targeted and managed, has the potential of drastically reducing inequality in health outcomes: the robust empirically observed relationship between health outcomes and healthcare spending is indicative of large returns to healthcare investments…” – Financing Healthcare by Esteban Ortiz-Ospina and Max Roser.
Turning trade around
In healthcare, as in many industry sectors, until now, we have been good at sharing our best practices, ideas and innovations with people and enterprises around the world by having open channels to our knowledge and experience, by having others come to us. In many areas of manufacturing, we have been quite proficient at creating flow in the opposite direction, taking our goods to others. But in human services such as healthcare, while we have done an outstanding job of caring for the sick from around the world when they come to our land, we have yet to fully realize the potential impact of our asset and its value on a global scale by taking it to the world instead of only inviting the world to us. We have said, in effect, “We are the experts. You’re welcome to come and see our doctors and nurses and stay in our hospitals.” The result is that at best, we “export” healthcare one patient at a time. Of course, this is to some extent, an exaggeration since there are global health initiatives. One could argue that we have been prolific in some research and education collaborations, expansive in our reach with technology and business ventures, and generous in our funding of global health initiatives (in addition to private support and philanthropy, the U.S. government Global Health Funding in 2019 totaled US$11 billion). But, in order for all of these advancements to impact the center of it all – the patient – we need to develop, deploy and adapt the operational systems that make this complex healthcare machine work around the world, not just in the U.S. To play off of the aspirational words of Steve Jobs, we have hardly made a dent in the universe…yet.
Trade and aid converge in healthcare
“Private enterprise is the single most powerful force for lifting lives, strengthening communities, and accelerating self-reliance.” – USAID Administrator Mark Green.
In December of 2018, the United States Agency for International Development (USAID) marked the formal launch of its new Private Sector Engagement Policy (PSE) unveiling an “intentional shift” to market-based approaches to development. It defines the private sector as “for-profit commercial entities and their affiliated foundations; financial institutions, investors and intermediaries and for-profit approaches that generate sustainable income” such as venture and investment funds run by non-governmental organizations. The policy directs the agency to collaborate with the private sector across all areas of its work – including economic growth, education, healthcare, and crisis and conflict. By doing so, USAID and the private sector can accelerate progress and achieve outcomes of shared interest and value.
Demand, demand, demand
In a world where things no longer happen slowly or incrementally over time – but rather knowledge travels at the speed of a click – people, countries, governments, enterprises everywhere, no matter how remote, know what is possible, what they want, what they do not have but desperately need, instantaneously. And at the top of that list of needs is health. Of course, as countries step up efforts to build healthcare infrastructure and services to meet the needs of their increasingly educated consumers, those countries seek to adopt best practices, modeled after what is believed to be the best healthcare in the world, that of the U.S.
The inquiries and proposals coming from public and private investors on every continent, calling for U.S. partnerships, through formal and informal channels, are currently a virtual onslaught and continue to escalate. The frequency of delegations visiting AMC’s (Academic Medical Centers) is overwhelming. And this is frankly, in spite of the reality that most if not all of these medical centers are at best ambiguous about their global healthcare objectives. They all know there is a need, and they each know they possess some of the wherewithal to meet that need, and that doing so may represent a future growth path…but they almost all lack a strategy or plan on how to get there. The lack of knowledge, and the dearth of definitive strategies or plans for global engagement, leaves them unprepared to proactively address the opportunities and leverage for economic benefit and competitive advantage. A priceless asset sits without a path to market.
Emerging wealth and wellness
In a worldwide marketplace, there are few unexploited sectors. Healthcare is one…at least for the moment, a moment to be seized. It meets all the criteria of financial gain, reasonable risk, and sustained growth. And this is not only in the opinion of those who stand to participate, but rather from those who dispassionately study markets and invest for a living.
Healthcare investment in emerging economies has significant upside. Acquisitions, mergers and healthcare private equity investments are growing by size and profitability. And they are outperforming other industries. The Emerging Market Private Equity Association (EMPEA) representing more than 300 institutional investors, fund managers and industry advisors who manage more than US$5 trillion in assets across 130 countries, conducts an annual survey of members and reports on industry performance and outlook. Healthcare is ranked as the most attractive sector for exposure to emerging markets in recent years. At the same time, these financial experts recognize the complexity, challenges of the sector and their lack of experience. In addition, the majority of the association’s commercial investors “explicitly acknowledged the importance of social and environmental factors in their investment decision-making,” thus elevating the opportunity for collaboration to balance financial and social impact.
Healthcare diplomacy
International healthcare, or “healthcare diplomacy” exports wellness and makes people well. It exports diagnoses, prevention, treatments, cures, and health habits to patients and potential patients of all ages, in all conditions, in all levels of need, from those fetuses who might otherwise not be born, to infants born but struggling, to those that might not survive, or may survive only to suffer debilitating disease, or shortened lifespans, or population-ending epidemics. It is literally a healthy business. There are fewer still where one profits and does good.
Emerging opportunity
The high value of U.S. assets – including AMCs and their powerful brands built on knowledge, experience and healthcare outcomes – will prompt more investors, including U.S.-based firms, to look overseas.
Individually and in collaboration, international investors are looking to U.S. partnerships to build healthcare resources around the world to meet the needs, country-by-country and region-by-region. Naturally, they are attracted to internationally recognized “brands” or centers where the expertise is already acknowledged and recognized, where the brand equates to medical superiority. (Many of these international investors have personal experience, often first-hand or via a family member, with U.S. based medical centers and have felt the impact of advanced medical treatment). But beyond the obvious brand names that come to mind, the U.S. has an even larger collection of accomplished centers of excellence, often every bit as good as the “famous” ones, that possess expertise in critical treatments and specialties that would be ideal and enthusiastic partners for investors. The U.S. medical resource is vast and as yet, largely untapped in the global market.
Patient perception
The U.S. leadership and continual advances in medicine – prevention, drugs, procedures – and in medical operating systems, and most importantly, quality outcomes are known by not only experts or investors, but most importantly by patients or potential patients around the world. While the nearby treatment may not be available globally, the news of medical advancements is well known. It is perceived, and therefore wanted, even where it isn’t yet available. In fact, knowing life-altering treatment exists and not being able to access it not only creates greater demand, it creates a human obligation to meet that need. Healthcare at its best is valued by patients and by providers alike, as well as the countries in which those patients live, the municipalities, the employers, and everyone who relies on good health for their existence.
This intersection of AMCs’ opportunity to expand their footprint, for investors and partners to realize gain, and for the increase of worldwide wellness is uncommon. It is no wonder that the export of healthcare – or healthcare diplomacy – represents an inflection point to invest, succeed, and impact lives at once.
Proof of concept – healthcare benchmarks
It is an acknowledged reality that American benchmarks and quality are sought after both as the mark of standards and as a competitive advantage in the market.
For investor comfort, optimizing return requires operational and clinical expertise and management. In addition, there is a need for implementation systems that are locally viable and sustainable. That is, it is not enough to have an “American brand name” grafted onto a facility. There must be a partnership – a solid, locally-based entity, with a plan for future training and growth in order to be both a top-level healthcare provider and a long-term investment.
Global partnerships should have a structure and maintain a process-oriented framework for the long-term collaboration. Most importantly, notes Dr. Heitham Hassoun, VP and Medical Director at Cedars-Sinai Health System, it should have defined Clinical Requirements that allow for the monitoring of the quality of care delivered at the collaborating site and to ensure the quality is consistent with standards and reputation of the partners. The areas of focus are 1) clinical quality, 2) risk management, 3) patient safety, 4) international accreditation and 5) patient experience. A well-developed process also allows for collaborative development of key performance indicators with benchmarking across a network of facilities at home and abroad.
International funds (that is, global alliances as well as local and regional investors) are highly motivated to invest in emerging markets...but often lack the depth of experience and expertise needed for complete due diligence. In other words, even if they want to invest, they may not be equipped to evaluate opportunities in sectors where they do not have prior experience. They need to understand what constitutes a strong healthcare facility in terms of human capital, physical plant and proven management. Further, they must become more informed of the cost base required to operate facilities at our standards.
Healthcare – a positive opportunity to connect with the world
There are many good reasons why we should organize ourselves and respond to this demand – economic, scientific, academic and humanitarian – as well as a rare opportunity to enhance and advance the standing, individually and collectively, of AMCs in the world. Healthcare is more than a national or international trade or business engagement; it is deeply personal – literally life altering, often life-saving – and as such, bears lasting impact. Leading AMCs can and must seize the opportunity to relate to people around the world on the platform where all parties can see eye to eye, where they are actively seeking our presence, our guidance, our business, and our citizens. It is a healthcare platform of shared values and goals providing the best possible care to individual citizens. The role of the private sector is making that happen. Third world and emerging economies, and the international corporations that do business in those parts of the world need improved prevention and healthcare for their survival and success. It is critical to their economic, political and social survival and growth to have healthy people to become healthy employees to build healthy, stronger and more viable economies. They need the instant credibility that U.S. AMCs bring on day one, in partnership with locally-based facilities. They need the longer-term impact and outcomes that they bring over time – healthier citizens. Those AMCs, their corporate partners and investors, that are part of the solution will be viewed as the leaders around the world. Those investments will pay dividends monetarily and reputationally. It is not just policy or political; it is a business with unique potential in international relations – it is healthcare diplomacy.
Reluctance: The reasons more AMC’s haven’t engaged
If the opportunity is so compelling, if the returns are potentially so substantial, why has there not been a greater rush to engage and invest?
First is readiness or the structure to commit fast and fully. It is generally not in the nature of academic institutions, often for good reasons, to act or react so quickly. They are, after all, academic first, not economic. But they also must survive and thrive.
Advanced medical care is inherently complex and requires the interaction and coordination of multiple areas, from infrastructure, to financing to human capital (doctors, nurses, researchers). Advanced care is dynamic, that is, it is in constant motion and change, and as a consequence, the timely adoption and implementation of innovations and discoveries can be challenging.
Second is interest or priority. As U.S. health systems have faced challenges at home, there was little bandwidth to develop expertise and practical models for the expansion of services beyond our borders and service areas.
Third is a model or rather the lack of an evidence-based model. There have been few prescriptions for global engagements that have proven effective and sustainable. But we now have a collection of documented experiences that emerged out of experimental engagements by those who have ventured into world markets. We now have concrete, positive, learnings and results to share with others. We have the raw data for a model but now we need to utilize it to build repeatable, replicable, cases in point from which we can say, “let’s do more of those.”
Where to start – immediate regional relevance
The Arab world with its various healthcare constituents – patients, providers, educators, investors and governments – has played major role in the development of international healthcare programs with major medical centers in the United States. Many of the first ventures of US AMC’s abroad were to the region, enabled by the resources and local drive for healthcare excellence, and not to be underestimated, the welcoming environment. Whether by refining current models or by innovative approaches, the bilateral experience will shape future collaborations and cross border transactions. The region will continue to play a major role. There is literally – and geographically – no better place to develop, nurture, and reap the rewards for all parties of healthcare diplomacy than the Middle East. There is need and demand; willingness, experience, and resources; a history of joint success; a knowledgeable population, interested governments and global businesses – only upside. What better place to do well by doing good?
Cases in Point – West Coast medical centers
Numerous prominent U.S.-based medical centers and medical educational institutions – the famed east coast medical “brands” – are already visible in the Arab World, through affiliates, branches and in-country projects. But, because of the attractiveness and timeliness of the opportunity, many other institutions – big brands in their own right, often on the “other coast” – have also pursued a wide range of collaborations and exchanges that have generated attention and gained positive impact. These recent initiatives have gone beyond international patient care in the United States and include medical education and training, public health initiatives, and research. Notably Stanford Medicine and UCLA have undertaken ambitious, high-results, high-return ventures.
Combined with significant experience under their belt from Asia markets, they are moving aggressively, with intent, and seek to be part of the transformative healthcare efforts in the Arab World, expanding their relationships and creating programs outside the classrooms and training labs.
Let’s start with Stanford, based in Northern California, as prestigious an institution as any on either coast, or in the world. “At Stanford Medicine, we recognize that the health organizations leading tomorrow will look very different from those we see today,” said Priya Singh, Chief Strategy Officer at Stanford Medicine. “They will rival retail companies in consumer experience, have international reach through digital services and platforms and, most importantly, they will collaborate across institutions and borders to innovate. As an organization, we are aligned toward this future. And we view the region as a key partner in our global strategy. We are actively seeking to foster clinical and scientific exchange in the region and collaborate on efforts to enhance local capacity for delivering what we at Stanford Medicine call Precision Health. It is our vision for the future: to harness the latest advances in biomedicine and informatics to predict, prevent, and cure disease — precisely. Only by working together can we realize the true potential of Precision Health.”
Just down the coast is UCLA, a public institution that has gained regional, national and international prominence. Highlighting the depth and breadth of their activities in the Arab world and beyond, Dr. Maie St John, Professor and Chair of Head and Neck Surgery at UCLA Health states, “We are very excited at the prospect of developing relationships internationally to further the reach of cutting-edge clinical discoveries and new models of patient care.”
“This opportunity is one that can’t be missed,” adds Dr. St John, referring to the unique science and population health models from UCLA being shared in global communities, and fueling teaching, capacity building and research initiatives abroad.
These two cases are indicative of the appetite, interest, and opportunities in the Arab World for high level American medical institutions from across the U.S., partnering with governments and business interests. In a market region as challenging and rewarding as it gets, more institutions may indeed bring unique perspective and learnings from their healthcare ventures throughout the Asia-Pacific. It will be interesting – and likely good health and good business – to follow and observe how things play out in this part of the world.
