JOSH MURRAY, KATIE DUDLEY, JOE SAUER, AND BRYANT BAKER JV: Health Spring & St. Luke’s
JOSH MURRAY, KATIE DUDLEY, JOE SAUER, AND BRYANT BAKER
JV: Health Spring & St. Luke’s
Purpose of Venture
Health Spring and St. Luke’s Medical Center in the Philippines
Create a JV with Health Spring acting as a medical tourism facilitator in partnership with SLMC
Take advantage of a growing market to enhance our business and that of SLMC
Why this makes this an attractive option for Health Spring?
Economic: rising healthcare costs; entitlements a focus for budget cuts
Demographic: Baby Boomers retiring; increasing # of people on Medicare
Geographic: Philippines location to U.S., ties to U.S.; infrastructure already in place at SLMC, English-speaking population
What does Health Spring stand to gain?
Tremendous cost savings, 20-80% depending on the procedure; infrastructure already in place
Business expansion: medical tourism facilitator; increased client base
Market share, get ahead of competition in medical tourism
Possible long-term partnership with SLMC, Philippines
What does SLMC stand to gain?
Enhanced reputation as premier medical tourism destination in East Asia, world
Hire more doctors, nurses to cater to increased demand for services
Access to US insurers, possible long-term partner
Increased revenue due to new patients
Health Spring Long-Term Vision
Current focus on Medicare, Medicare Advantage, prescription drugs
Focus on wellness and preventive care; “Physician Partnership”-partner members with doctors and nurses for personal care
Establish ourselves as a Medical Tourism facilitator; partner with travel companies
SWOT
Strengths Baby
Boomers, Infrastructu
re
Weaknesses Footprint, Domestic
Needs
Opportunities Financial
Gains, Increased
Specialization.
ThreatsHealthcare
reform, Local
Resistance.
Joint Venture Considerations
Collaborative LegalHuman ResourcesIT
St. Luke’s Role
InfrastructureStaffServices
Health Spring’s Role
Policy Accommodation.Sales Training.Billing.Local Staff.
Leverage Board Experience and Hire Locally
Reasons For Local Resources
Wage rate variance - Example VP Operations $170K salary (US) vs $68K fully burdened (PH)
Relationships play key role in businessEnglish is primary medium of instruction
Executive Order 210 Minimal knowledge transfer barrier
Risk mitigation Board approval for executive hires
Board of Directors
Six members Small group eliminates unnecessary bureaucracy
Three executives from each parent company Equal representation
Unanimous decision making process Balance of power
Board Members From St. Lukes
Jose F.G. Ledesma – CEO Employed by St. Luke’s since 1981
Joven R. Cuanang, M.D.– Chief Medical Officer International advisory board for IMWell Summit Founded Stroke Society of the Philippines
Edith M. Simeon – CFO International banking experience
Board Members From HealthSpring
Herbert Fritch - CEO 35 years experience in HMO and physician
managementJ. Gentry Barden - General Counsel
Corporate and securities lawyer Seven years merger and acquisition experience
Dirk O. Wales – Chief Medical Officer 11 years experience as an officer
Three Year Plan
Year One
Establish relationships with luxury hotels and transportation services
Begin Promoting the option of medical tourism to existing customers and doctors that are covered by Health Springs
Three Year Plan
Year Two
Do public broadcast of the availability of medical tourism in the Philippines to attract new customers to join Health Springs.
Work with St. Luke's Hospital to make sure they have high class medical equipment to promote the excellent medical care offered at the hospital.
Three Year Plan
Year Three
Review the financials from the last two years and create cash flow analysis to determine if the IJV is viable for a long term partnership.
Risk Factors
Travel
Foreign Nationals Cannot Own Land
Corruption in the Filipino Government
Uncertain and Inefficient Judicial System
Questions?
References
Brandon, Emily. (2010, Feb. 16). 10 Ways Baby Boomers Will Reinvent Retirement. USNews.com. Retrieved from
http://money.usnews.com/money/retirement/articles/2010/02/16/10-ways-baby-boomers-will-reinvent-retirement
Einhorn, Bruce. (2008, March 13). Outsourcing the Patients. Bloomberg Businessweek. Retrieved from
http://www.businessweek.com/magazine/content/08_12/b4076036777780.htm
Kasier Family Foundation. Medicare Now and in the Future. Retrieved from http://www.kff.org/medicare/h08_7821.cfm
Mitchell, Deborah. (2009, Aug. 23). Health Insurance Companies Promoting Medical Tourism. Retrieved from http://www.emaxhealth.com/1275/121/33050/health-insurance-companies-promoting-medical-tourism.html
Mueller, Megg. (2010, April 6). That’s the Ticket: Insurance for Medical Tourism. Retrieved fromhttp://www.insure.com/articles/healthinsurance /medical-tourism.html
References
Mueller, Megg. (2010, April 6). That’s the Ticket: Insurance for Medical Tourism. Retrieved fromhttp://www.insure.com /articles/healthinsurance /medical-tourism.html
Porter, M., De Vera, M., Huang, B., Khan, O., Qin, Z., & Tan, A. (2008). Medical Tourism in the Philippines.
St. Luke’s Medical Center. General website. Retrieved from http://www.stluke.com.ph/
Doing Business in the Philippines: 2010 Country Commercial Guide for U.S. Companies. Retrieved from http://www.buyusainfo.net/docs/x_9327272.pdf
Does FAA provide safety oversight for international flights? Retrieved from http://www.faa.gov/passengers/international_travel/
Cuanang, Joven R. "Message from the Founding President." Stroke Society of the Philippines. Web. 15 Mar. 2011. <http://www.strokesocietyphil.org/files/chapter-1.pdf>.
"Doing Business in the Philippines -- U.S. Commercial Service Philippines." Home -- U.S. Commercial Service Your Global Business Partner. Web. 15 Mar. 2011. <http://www.buyusa.gov/philippines/en/doing_business_philippines.html>.
Experience');document.write(', Years. "PayScale - Vice President (VP), Operations Salary, Average Salaries by Hospital Setting." PayScale - Salary Comparison, Salary Survey, Search Wages. Web. 15 Mar. 2011. <http://www.payscale.com/research/US/Job=Vice_President_(VP),_Operations/Salary/by_Hospital_Setting>.
"HealthSpring - More from Medicare. More from Life. | Investor Relations | Corporate Governance - Management." HealthSpring - More from Medicare. More from Life. | Investor Relations | Investor Overview. Web. 15 Mar. 2011. <http://ir.healthspring.com/phoenix.zhtml?c=194529&p=irol-govmanage>.
"IMWell Summit." Philippines The Heart of Asia. Web. 15 Mar. 2011. <http://www.philippinesheartofasia.ph/IMWellSummit/contact.html>.
References
"Joe Ledesma Speaker :: Healthcare Reform Conference." Home Health Care Reform Summit. Web. 15 Mar. 2011. <http://www.healthcarereformsummit.com/speakers/joe-ledesma.html>.
"The Manila Times Internet Edition | OPINION Mother Tongue as Medium of Instruction." The Manila Times Internet Edition | September 23, 2009. Web. 15 Mar. 2011. <http://archives.manilatimes.net/national/2008/june/21/yehey/opinion/20080621opi1.html>.
PayScale - Salary Comparison, Salary Survey, Search Wages. Web. 15 Mar. 2011. <http://www.payscale.com>.
"PayScale - Salary Search: Job." PayScale - Salary Comparison, Salary Survey, Search Wages. Web. 15 Mar. 2011. <http://www.payscale.com/research/US/Job>.
"PayScale Philippines - Vice President (VP), Operations Commute Time Survey." PayScale - Salary Comparison, Salary Survey, Search Wages. Web. 15 Mar. 2011. <http://www.payscale.com/research/PH/Job=Vice_President_(VP),_Operations/Commute_Time>.
References