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Business Times
13-07-2025
- Business
- Business Times
With medical costs under the microscope, IHH Healthcare group CEO continues to eye expansion
[SINGAPORE] As IHH Healthcare looks to streamline its operations and expand in its current markets, it is also keeping its eyes peeled for opportunities to grow in new countries, said group chief executive Dr Prem Kumar Nair. When Dr Nair took over the role of group CEO in 2023, he aimed to transform the company to become leaner so that it can continue to grow. 'This is a group that has grown by M&A (mergers and acquisitions) – every time we buy something or we expand, we try to synergise as much as possible… but what happens is, over a period of time, the red tape and bureaucracy build up,' he said. But he noted that 'most of (the) countries (where it operates) have got scope for expansion' by adding hospital beds, or acquiring new hospitals, or building ambulatory care centres. The healthcare operator, which has a presence in 10 countries including Singapore, Malaysia, India, Turkey and China, has grown steadily over the years by acquiring new hospitals. In 2024, it bought Island Hospital in Penang and Timberland Medical Centre in Kuching, Sarawak. Before that, its Indian subsidiary Fortis also bought two hospitals, while its Turkish subsidiary Acibadem Healthcare expanded into East Europe. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Its acquisitions aim to be earnings accretive. For example, Dr Nair said, Island Hospital added 'a new dimension' to its Malaysian operations, with 60 per cent of its patients being medical tourists. To expand in a more cost-efficient manner, it is looking at brownfield expansion – or adding beds – for markets with bigger land space, such as Malaysia and India. The group has a five-year plan to add 4,000 beds, or 33 per cent of capacity, by 2028. By 2024, it had already added 1,004 beds across its markets. Meanwhile, in Singapore and Hong Kong, it is moving towards the ambulatory care sector, or what it terms as the 'out-of-hospital' strategy. This is because it is not possible to open more private hospitals in these two markets, due to regulations, high costs and lack of space, Dr Nair said. Nevertheless, he noted several similarities in healthcare that can be dealt with at the group level. 'The truth is, a lot of healthcare is the same – (such as) licensing of doctors, accreditation of specialists, nurse licensing, building controls,' he said. 'What we try to standardise are things that may have some variation – quality is one area where we feel that we need to have some standardisation because we want the same outcomes.' By ensuring that patients are able to achieve the same results wherever they choose to engage with the group, Dr Nair said, this will push the group from being just a leader in business to a leader in healthcare services. Medical inflation, insurance premiums Dr Nair noted that as a group, it sees issues that may turn up in different markets from time to time. In 2024, Malaysia went through a bout of medical inflation that likely caused the group 'some softening' in patient admissions and revenue. In June 2025, insurer Great Eastern temporarily suspended pre-authorisation certificates for IHH Healthcare's Mount Elizabeth Hospitals, citing higher costs compared to other private hospitals. Dr Nair noted that payer-provider issues are not new to the healthcare industry, nor to the group. He added that the company is likely 'the most risk diversified healthcare group in the world', operating in 10 countries from the far east to the west. 'We are a heavily regulated industry, and we will continue to be – and it's good because we are dealing with people's lives,' he said. But costs are a perennial issue for an industry that should not compromise quality for price. Hence, to manage costs, Dr Nair said, IHH Healthcare tries to procure equipment at the group level. Technology, digitalisation and innovation also remain key priorities as the ageing population will likely increase healthcare utilisation and push up healthcare costs. Looking ahead, Dr Nair noted that the group is already operating at an average capacity of more than 70 per cent – 'fairly high' for a private hospital – so it needs to continue expanding. He also noted opportunities in Indonesia and Vietnam – two new markets in South-east Asia where the hospital operator is already operating. 'Our preference would be for continued growth in (our existing) countries… but as a responsible global healthcare group, we will have to look at opportunities down the road.'
Business Times
09-07-2025
- Business
- Business Times
Hospital operator IHH eyes Indonesia, Vietnam for expansion
[KUALA LUMPUR] IHH Healthcare is looking to potential new markets Indonesia and Vietnam as the Malaysian hospital operator continues building scale to offset rising healthcare costs in the region. Indonesia is attractive, thanks to its healthcare reforms and foreign ownership relaxation, while Vietnam has emerged as a booming market, according to chief executive officer Prem Kumar Nair. 'We get a lot of patients from Vietnam into our Singapore operations,' he said in an interview in Kuala Lumpur this week. The company currently operates more than 80 hospitals in 10 countries, including Singapore, India and China, and has been actively acquiring healthcare facilities in recent years. It bought Island Hospital in Malaysia in 2024. Its Turkish unit Acibadem and Indian affiliate Fortis Healthcare also purchased hospitals in their respective markets in the last two years. The company has US$14 billion in market capitalisation and is the most valuable listed hospital operator in South-east Asia. The desire to widen expansion in the region comes as IHH looks to make up for rising import costs in the industry. The group is now procuring medical equipment, consumables and generic medications in bulk to cut costs on imported items, Prem Kumar said. IHH is also planning to consolidate its presence in China, according to Prem Kumar. It turned its clinic business into a profitable operation and is seeing a rising number of patients at its hospital in Shanghai. Still, China's decision to ease restrictions on foreign investment in the healthcare sector will not immediately sway IHH into expanding further in the world's second-largest economy. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 'In China, the public sector is a very big competitor to private healthcare,' he said. 'We are the only foreign operator in China who has a combination of clinics, and an ecosystem, so we will build on it.' The company's priorities also include tapping growing opportunities in existing markets, where it's already committed to expanding hospital bed capacity by 33 per cent from 2024 to 2028, a 4,000 bed target. 'There's no dearth of opportunities in the countries we operate,' he said. Beyond hospitals IHH booked RM6.3 billion (S$1.9 billion) in first-quarter revenue, an increase of 5.7 per cent from a year ago. Its profit slid 33 per cent to RM514 million, which the company attributed to exceptional accounting adjustments. Singapore, Turkey and Malaysia are currently its main revenue drivers, but the company expects India to become a major contributor in the coming years amid booming demand for private healthcare. With 35 hospitals, India already has IHH's biggest in-country network. Prem Kumar said he was focused on growing out-of-hospital care in IHH's markets, including ambulatory surgical and care centers, along with primary care centres, along with primary care centres, to help control cost pressures. The group currently operates 60 healthcare facilities that are not hospitals. 'If we depend on hospitals alone, healthcare costs are going to rise tremendously,' he said. Singapore already has such an ecosystem in place while Hong Kong is headed in that direction, Prem Kumar said. Still, its home market of Malaysia does not allow hospital operators to also run other healthcare facilities. IHH plans to make representations to Malaysia's Health Ministry in hopes the rule will be changed. 'We definitely want to move, in Malaysia, into the out-of-hospital sector in a big way as well,' he said. IHH shares have declined 8.4 per cent so far this year, while Malaysia's benchmark stock index has fallen around 7 per cent amid concerns over US tariffs. BLOOMBERG
Business Times
30-05-2025
- Business
- Business Times
IHH Healthcare revenue could soften on medical inflation measures
[SINGAPORE] IHH Healthcare will likely face 'some softening of (patient admissions) and revenue' from measures the group has implemented to combat medical inflation in Malaysia, but the situation has 'improved considerably', said its group chief executive Dr Prem Nair on Friday (May 30). The group is now negotiating directly with insurers, offering more packages and discounts, he said. Issues that triggered the medical inflation issue, such as a weak ringgit, have 'abated significantly'. '(Medical inflation) has not fully gone away, but we have all now come to the table,' said Dr Nair, noting that the group is also in discussion with various parties including Malaysia's health ministry and life insurance association to curb medical inflation. The group in February guided that the country's current sustained period of medical inflation may affect IHH Healthcare's profit margins. Bank Negara Malaysia cited data indicating that medical cost inflation in Malaysia reached 15 per cent in 2024, above the global and Asia-Pacific average of 10 per cent, and rolled out measures to tackle the high costs. Dr Nair noted that although Malaysia now faces sustained medical inflation, these issues previously occurred in other markets IHH Healthcare has operations in. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up These countries have since come up with ways to manage high costs. For example, in Singapore, the government formed a committee for payers, providers and regulators to discuss, he said. 'Payer-provider issues have been with us in healthcare for the longest time... and it will never go away because there is a third party paying for the patient,' said Dr Nair. 'I can guarantee it will come up again in another country, and we will have to use the same playbook to manage these issues as well.' He was speaking at an analyst briefing after the group's first-quarter earnings. IHH Healthcare posted net profit of RM514 million (S$156.3 million) for the three months ended Mar 31, down 33 per cent from RM768 million in the corresponding year-ago period. Despite the impact of medical inflation and the Ramadan fasting period on Malaysia, contributions from Island Hospital in Penang resulted in the segment's revenue gaining 17 per cent year on year to RM1.1 billion. The segment's earnings before interest, taxes, depreciation and amortisation gained 14 per cent on year to RM273 million. The group in November last year completed the acquisition of the hospital. This resulted in a 'robust increase in in-patient admissions (in Malaysia), up 6 per cent', said group chief corporate officer Ashok Pandit. Group chief financial officer Dilip Kadambi added that without the medical tourism-focused Island Hospital, revenue growth in Malaysia would have been 'probably flattish' with a slight increase. Meanwhile, Singapore's Mount Elizabeth Hospital, which is currently operating at a lower capacity as it undergoes renovations, is on track to fully reopen by Q3 this year, said the group's senior management. 'While Q2 continues to be soft, we anticipate a reasonable rebound in the second half of the year. This recovery will be driven by successful negotiation with payers and completion of Mount Elizabeth Hospital renovations,' said Kadambi. Maybank Securities analysts Nur Natasha Ariza and Yin Shao Yang said the results are in line with expectations and IHH Healthcare's growth outlook remains intact, as it looks to add around 4,000 beds in several markets by 2028. 'Despite some geopolitical, structural and regulatory challenges across the different countries, we stay bullish on resilient demand and growing case-mix intensity as IHH remains focused on organic and opportunistic inorganic growth,' they said.
The Star
29-05-2025
- Business
- The Star
IHH revenue grows to RM6.29bil in 1Q25
PETALING JAYA: IHH Healthcare Bhd will be forging ahead with its expansion and growth strategies to meet the increasing demand for quality healthcare services locally and across the region. Following the acquisitions of Timberland Medical Centre in Sarawak and Island Hospital in Penang in 2024, the group said in a Bursa Malaysia filing that it had opened the 127-bed Acibadem Kartal Hospital in Turkiye in the first quarter ended March 31, 2025 (1Q25) and expects to complete the acquisition of the 228-bedded Shrimann Superspeciality Hospital in India during the year. For 1Q25, IHH's net profit dropped to RM514mil from RM768mil in the previous corresponding quarter, while revenue grew to RM6.29bil from RM5.96bil a year earlier. 'The growth in revenue was driven by a sustained demand for quality healthcare services, a case-mix of more acute patients and price adjustments to counter inflation. 'The consolidation of Island Hospital, which was acquired in November 2024, also contributed to the increase in revenue.' IHH said its Singapore hospital inpatient admissions decreased 6% to 14,493 in 1Q25 while its revenue per inpatient admission increased 10% to RM67,294. 'Malaysia's hospital inpatient admissions increased 6% at 62,406 in 1Q25 while its revenue per inpatient admission increased 6% to RM11,334. 'India's hospital inpatient admissions increased 7% to 78,485 in 1Q25 while its revenue per inpatient admission increased 4% to RM10,152.' Meanwhile, Turkiye and Europe hospital inpatient admissions was flat at 66,776 in 1Q25 while its revenue per inpatient admission increased 16% to RM13,522 with price adjustments, especially in Turkiye, to counter hyperinflation. While the demand for quality healthcare remains robust, IHH said ongoing industry-wide challenges including rising cost pressures as well as higher energy costs and staff costs. 'In addition, payor pressures from both public and private insurers continue to shape reimbursement dynamics in the industry.' To unlock value from its key markets and to address the industry-wide challenges, IHH said it has embarked on a multi-year transformation initiative to drive continuous improvement through seven focus areas. The areas are clinical excellence, patient experience, new care models, operational excellence, payor and regulator engagement, employee and doctor value proposition, and the advancement of technology, data, and artificial intelligence. 'The group remains in a good position given its strong track record in delivering high-quality and cost-effective healthcare. 'By leveraging operational synergies across its international network, the group remains confident in its ability to maintain cost efficiency while upholding its commitment to value-based healthcare.' Despite global economic and geopolitical headwinds, IHH said it remains well-poised to navigate uncertainties, underpinned by strong fundamentals, strategic growth initiatives, and long-term healthcare megatrends.
The Star
29-05-2025
- Business
- The Star
IHH to forge ahead with expansion and growth strategies
PETALING JAYA: IHH Healthcare Bhd will be forging ahead with its expansion and growth strategies to meet the increasing demand for quality healthcare services locally and across the region. Following the acquisitions of Timberland Medical Centre in Sarawak and Island Hospital in Penang in 2024, the group said in a Bursa Malaysia filing that it had opened the 127-bed Acibadem Kartal Hospital in Turkey in the first quarter of 2025 (1Q25) and expects to complete the acquisition of the 228-bedded Shrimann Superspeciality Hospital in India during the year. For 1Q25 (ended March 31, 2025), IHH's net profit dropped to RM514mil from RM768mil in the previous corresponding quarter, while revenue grew to RM6.29bil from RM5.96bil a year earlier. 'The growth in revenue was driven by a sustained demand for quality healthcare services, a case-mix of more acute patients and price adjustments to counter inflation. 'The consolidation of Island Hospital, which was acquired in November 2024, also contributed to the increase in revenue.' IHH said its Singapore hospital inpatient admissions decreased 6% to 14,493 in Q15 while its revenue per inpatient admission increased 10% to RM67,294. 'Malaysia's hospital inpatient admissions increased 6% at 62,406 in 1Q25 while its revenue per inpatient admission increased 6% to RM11,334. 'India's hospital inpatient admissions increased 7% to 78,485 in 1Q25 while its revenue per inpatient admission increased 4% to RM10,152.' Meanwhile, Turkiye and Europe hospital inpatient admissions was flat at 66,776 in 1Q25 while its revenue per inpatient admission increased 16% to RM13,522 with price adjustments, especially in Turkiye, to counter hyperinflation. While the demand for quality healthcare remains robust, IHH said ongoing industry-wide challenges including rising cost pressures as well as higher energy costs and staff costs. 'In addition, payor pressures from both public and private insurers continue to shape reimbursement dynamics in the industry.' To unlock value from its key markets and to address the industry-wide challenges, IHH said it has embarked on a multi-year transformation initiative to drive continuous improvement through seven focus areas - clinical excellence, patient experience, new care models, operational excellence, payor and regulator engagement, employee and doctor value proposition, and the advancement of technology, data, and artificial intelligence. 'The group remains in a good position given its strong track record in delivering high-quality and cost-effective healthcare. 'By leveraging operational synergies across its international network, the group remains confident in its ability to maintain cost efficiency while upholding its commitment to value-based healthcare.' Despite global economic and geopolitical headwinds, IHH said it remains well-poised to navigate uncertainties, underpinned by strong fundamentals, strategic growth initiatives, and long-term healthcare megatrends.
