Health City pushing into new markets

It has been a whopping year for Health City Cayman Islands, and 2015 promises to be equally significant, looking toward accreditation, a start to expansion, a U.S. promotional campaign and efforts to gain recognition from medical insurers. 

Situated on 14 acres of hilltop land at High Rock in East End, the “Shetty Hospital” – founded by India-born, London-trained and Bangalore-based Dr. Devi Shetty – opened in late February 2014. 

The four-building, 14-acre, 104-bed first-phase opening marked the start of a 15-year, billion-dollar project that is scheduled to create another 1,900 beds, two hotels, a medical college and nursing school, a research center and assisted-living quarters, on the 200-acre campus. 

“We are well into the design phase of the first of two hotels, which is expected to create around 185 rooms with an anticipated opening date of November 2016,” says Shomari Scott, marketing director for Health City.  

Builders will be “commencing supporting hotel infrastructure by the third quarter of 2015,” he says. 

“The second hotel is expected to be started within the 2018-2019 time frame, once the next phase of the hospital becomes operational.” 

And that is imminent, with plans to start design on phase two of the hospital in late 2015, and construction to begin in late 2016. 

What is not being designed is being planned and what is not being planned is being discussed.  

“We are also in the process of starting our residential and commercial development early next year and are in the early stages of design on our retirement community, which is expected to commence later on in 2015. 

“In addition,” he says, “we plan to build a medical education campus, which is expected to start within the 2017-2018 time frame.” 

 

The vision  

The intense activity is perhaps typical of the vision that drives the development. Two words – affordable healthcare – largely underlie the entire strategy.  

Creating affordable healthcare in India, the larger subcontinent, and even the once-styled “Third World,” however, is not quite the same as confronting spiraling costs in a U.S. or even European heathcare systems that constitute a multibillion-dollar industry. 

According to the World Health Organization, total healthcare spending in the U.S. was 17.9 percent of GDP in 2011, the highest in the world. Washington’s Health and Human Services Department expects that the health share of GDP will reach 19.5 percent of GDP by 2017.  

In 2014, the United States’ GDP was pegged at $17.5 trillion. The year before, Washington spent $585 billion on Medicare, and $760 billion combined on Medicare and Medicaid, the latter for lower-income people, more than the $608 billion the country spent on defense. Washington’s Congressional Budget Office expects the medical programs to grow dramatically in the next 20 years.  

Recognizing spiraling costs and the critical need to address them, Dr. Shetty told an interviewer last year that “if it’s not affordable, then it’s not a solution.” 

Scott is largely silent on any resistance from the U.S. medical system that Health City has encountered in its quest to lower costs, but he says the chief challenge Health City faces is accreditation. 

“The … only challenge which we were aware of, and on which we based our phased targeting efforts, was offering a ‘first in class’ tertiary medical institution built as a global healthcare destination without Joint Commission International accreditation. 

“It usually takes approximately two years to get this, and we are on track to have it within a year. Most institutions in the U.S. need this stamp of approval in order to put Health City in their network,” he says. 

Joint Commission International was founded in 1994. It is part of the 63-year-old Chicago-based Joint Commission, a nonprofit that, according to its website, “works to improve patient safety and quality of health care in the international community by offering education, publications [and] advisory services.” 

The commission counts as members more than 20,000 U.S. and 270 international healthcare organizations, public health agencies, health ministries, hospitals, clinics, academic medical centers, health systems and agencies, working “to promote rigorous standards of care and to provide solutions for achieving peak performance.” 

JCI accredits institutions in Japan, China and Singapore, through the Middle East, to South and Central America and Mexico. Regionally, JCI lists organizations in Barbados, the Bahamas and Bermuda as members. 

“International hospitals may seek accreditation to demonstrate quality, and JCI accreditation may be considered a seal of approval by medical travelers from the U.S,” according to one website. 

Until accreditation is forthcoming, however, Scott indicates that Health City’s operations will remain constrained. Many medical insurers require the JCI imprimatur before including an organization in their network.  

The networks are the key. Health City thinks that, once accessed, the U.S. market will respond. JCI is explicit that accreditation will aid that effort, underscoring Dr. Shetty’s longtime thinking that U.S. medical costs are so unmanageable that a reputable, nearby – and reasonably priced – alternative will capture significant market share. 

“JCI accreditation is needed to see serious movement in this regard,” he says, “However, that hasn’t stopped us from having contracts with two or three of the major insurance companies from the U.S. We also have contracts with a few major insurers in the Caribbean and are in discussions with the rest.” 

Again, he is silent on greater detail, aware of the sensitivity of ongoing talks, although Health City’s management partnership with Missouri-based Ascension Health will offer an enormous boost in regard to U.S. insurers. 

Ascension is a nonprofit company that manages 79 hospitals and related health facilities across 1,900 “sites of care” in 23 states. The Catholic-founded agency oversees more than 22,000 beds, 70 general acute-care hospitals, two long-term acute-care hospitals, three rehabilitation hospitals and four psychiatric hospitals. In 2013, it recorded revenues of $17.1 billion. 

Scott is optimistic that Health City will turn the accreditation-and-insurance corner in the next 12 months. The hospital’s website states that Joint Commission approval will come in the spring. 

“We have seen positive signs from payors,” insurance companies, health maintenance organizations, service contractors and others who handle medical claims, “who need to find quality solutions at an affordable price as their healthcare costs are spiraling out of control,” Scott says. 

He also looks toward “a major public relations push in the U.S. in order to get into more networks there …” 

As that develops, Scott forecasts an incremental increase in medical travelers from the U.S. “Towards the middle of the year, we anticipate starting to see more patients from the US as we gain … accreditation. Then we will really be able to begin properly to showcase our reputation as a destination of excellence for cardiac and orthopedic care. 

“We have all of the pieces in place – from a quality product to an affordable price – to getting JCI to move forward with positive brand awareness …” 

The other half of the medical-tourism strategy is regional. 

The public reactions push into the U.S., Scott says, will come “also in the Caribbean, and we will also be looking towards Latin America.” 

As regional insurers add Health City to their lists, the hospital “will work more overtly to help Caribbean countries closest to us to help plug any gaps they may have in tertiary care. 

“One of our key targets is to connect with the wider Caribbean, and this is currently an issue from the eastern Caribbean perspective due to airlift connectivity. However, we are being innovative, working with private air carriers and working package deals where it makes sense. 

“Also, taking the additional costs into account, we have right-sized the total price for countries/insurance companies with which we have agreements within the eastern Caribbean,” he says. 

The eastern Caribbean region encompasses the Turks and Caicos Islands, Antigua, and the British Virgin Islands, as well as Grenada, the Bahamas and St. Lucia, the U.S. Virgin Islands, Puerto Rico, and St. Maarten. 

None have commercial airlift to the Cayman Islands, forcing travelers through Miami. Scott acknowledges that Health City will rely on Owen Roberts Airport for much of its custom.  

“The expansion of Owen Roberts Airport is critical to the expansion of HCCI, and the Cayman Islands government is fully aware of this and plans to start expansion of ORA early next year,” Scott says. 

“This is the most important public infrastructure that is needed in the near term. The project will be phased over 15 years to allow other public and private infrastructure to run parallel with our expansion.” 

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