MEDICINE or business?
This was the career decision Dr Heah Sieu Min faced - and made - more than three decades ago, after a night with little sleep while on guard duty in the Singapore army. Today, Dr Heah, who grew up in a family of rubber estate owners, experiences the best of both worlds - the successful colorectal surgeon is also the founder and chief executive officer of Singapore Exchange (SGX)-listed HC Surgical Specialists.
"It was 1984 and I was 20 years old, in National Service (NS), when I had this eureka moment," Dr Heah recalled. "I was struggling to decide which course to pursue at university. I thought I would be good at business, but I wasn't sure if I could excel in medicine since I wasn't the mugging type. But that night, I decided to follow my heart to be a doctor - a professional occupation I always admired since childhood - rather than go with my instinct to get a business degree."
Dr Heah graduated from the Royal College of Surgeons in Ireland (Dublin) with a Bachelor of Medicine, Bachelor of Surgery (MBBS) degree in 1990. He started his medical career as a houseman in Ireland, before returning to Singapore in 1991 to complete his NS.
In 1992, he was awarded traineeship in general surgery, and took on the role of medical officer at Tan Tock Seng Hospital. After obtaining his Fellowship of the Royal Colleges of Surgeons (FRCS) (Edinburgh) qualification in 1994, he held various positions at Singapore General Hospital - including medical officer specialist, registrar, associate consultant and consultant of the Department of Colorectal Surgery - till 2004.
Thereafter, he spent just under three years as consultant in colorectal surgery at Pacific Colorectal Centre (Pacific Healthcare), before starting his own private practice - Heah Colorectal Endoscopy & Piles Centre - in 2007 at Mount Elizabeth Medical Centre. When Dr Heah began his private practice, he considered endoscopy, which would offer a stable income due to demand, as well as provide opportunities to treat patients with conditions such as haemorrhoids and colon cancer, further supplementing revenues.
"I thought to myself that as a colorectal surgeon, someone must have colorectal cancer in order to become my patient. But as an endoscopist, the pool is much broader - anyone with a mouth and anus can potentially be my patient, thereby making it a scalable business."
Having been trained as a surgeon, Dr Heah prefers to be in the operating theatre. "However, to be successful in private practice, one needs to strategise. I decided from the beginning I would focus on endoscopy. Since I don't see any credible substitute for this service, demand should be sustainable over the long term."
Venturing into the heartlands to set up clinics was also a deliberate plan.
"If you have only a centrally located clinic, you end up competing with the majority of surgeons for the same pool of patients. The likelihood of attracting patients from the heartlands is low, because they invariably have the impression that you are expensive," he said. "But when you have a presence in the outlying residential estates, your catchment area is much wider, and there's no one else in private practice who provides the same service. As a result, you can cater to patients who would otherwise be destined for restructured hospitals. Generally, we can streamline our service for patients to offer shortened waiting times."
Dr Heah has since expanded his practice to five other locations - Bukit Batok, Hougang, Tampines, Farrer Park and D'Leedon condominium. This year, another two centres with endoscopic facilities will open in the heartlands, where demand is more recession-proof.
"When a recession hits, foreign patients are usually the first to stop coming. While a central clinic location tends to capture a significant number of foreigners, when times are bad, you'll have to divide a shrinking pie among more specialists," he noted. "In the heartlands, because patients can use MediShield and Medisave to pay for treatments, demand is more resilient."
In these outlying areas, building a facility capable of performing endoscopies, as well as minor surgical procedures, safely and seamlessly, can be challenging. "There is a significant investment in manpower and cost because of strict Ministry of Health licensing guidelines for such facilities," Dr Heah added.
Ironically, a specialist's reputation in the heartlands rests on the success of his centrally located clinic, he pointed out. "It's not good, image-wise, if you were to head straight to the residential areas without first setting up shop in Orchard Road, or Mount Elizabeth Medical Centre. Patients will tend to think you're based in the heartlands because you couldn't succeed in a central, competitive environment."
It's also important to strike a balance between running a business and helping patients.
"You need to have a successful business in order to help patients - no one will come to you if you are not successful, measured by profits, of course," he said. "On the other hand, if you're too successful, you're seen more as a businessman than a doctor, one who is more interested in profits than patient welfare. It's a thin line to navigate, but one every successful surgeon will invariably encounter."
This is best overcome by raising service levels, he added. "Ultimately, patients will visit you because you serve them well, at reasonable prices that are not available elsewhere. Many term this as good value for money." In September 2015, Dr Heah founded HC Surgical Specialists with Dr Chia Kok Hoong, who was appointed the group's chief operating officer. The company, which derives its name from the initials of the founders, was listed on SGX's Catalist board on Nov 3, 2016, via a placement of 30 million shares at 27 Singapore cents apiece.
The group also includes colorectal surgeon Dr Lai Jiunn Herng and general surgeon Dr Charles Tan, as well as general practitioners (GPs) Dr Malcolm Lim and Dr Tan See Lin. HC Surgical has a current market capitalisation of over S$85 million. Its shares more than doubled on trading debut, closing at 55 Singapore cents, more than double the initial public offering price. In the year-to-date, the stock has declined 5.7 per cent to 58 cents, but is still 115 per cent above its issue price.
The group offers endoscopic procedures, including gastroscopies, colonoscopies and general surgery, with a focus on colorectal procedures. Common conditions treated include haemorrhoids, gallstones, hernias, colorectal cancer, stomach cancer, as well as thyroid conditions. It has a network of 12 clinics that span central Singapore and the heartlands, with some situated within major private hospitals.
Between the financial years ended May 31, 2014, and 2016, HC Surgical Specialists averaged a revenue of S$7.2 million and an attributable net profit of S$3.1 million. The company intends to pay out at least 70 per cent of its profit after tax as dividends for FY2017, FY2018 and FY2019.
Following its listing, HC Surgical continues to look out for opportunities to strengthen its local presence. To grow the patient pool and increase the range of specialty treatments available, Dr Heah plans to collaborate with other GPs through joint ventures, as well as acquire specialists in other fields.
In February 2017, HC Surgical completed its acquisition of Julian Ong Endoscopy & Surgery for S$2.2 million. The inclusion of Dr Ong in the group's stable will enhance its capabilities.
"We're interested to take on young, motivated, specialist doctors with potential to grow with us. They ought to be doctors with good reputation, integrity and a desire to help as many people as possible, thereby sharing our work ethos," he said.
But finding the right talent for the group may be a challenge, as physicians by nature are hard to manage, Dr Heah admitted.
"I need to convince these doctors they are better off with the group than being on their own - that it's the sum of the whole, rather than each individual alone, which creates a win-win situation," he said. "I do this by creating a working environment conducive for them to obtain new business leads, which in turn will provide patients with quality, accessible healthcare."
Singapore as a medical tourism hub is also facing stiff competition as costs escalate. The city-state is maintaining its leadership position in the region for now, largely due to the stellar reputation of its doctors.
"The challenge is how we maintain that reputation yet keep costs down. Once the region's medical centres get their act together, competitive pressures will accelerate," he added.
HC Surgical is also increasing its exposure in Asian markets. In January last year, it entered into an agreement with an independent party to provide consultancy and training services at the Transport Hospital in Hanoi, Vietnam. The group will also assist Transport Hospital in establishing a day surgery and endoscopy centre, where its specialist surgeons will have exclusive rights to perform surgical and endoscopic procedures for a stipulated period of time. "Because Vietnam is less saturated than China, this market offers a lot more opportunities," Dr Heah noted.
While many doctors have the skills to perform scopes and surgery, the degree of attention to patient welfare is a key differentiator. "Did you explain the procedure clearly to your patient so he doesn't worry unnecessarily? Did you check if he can use Medisave funds or claim against insurance for the procedure? Did you call him to see how he is recovering after surgery? Talking to patients is an art," he noted. "The quality of your service will distinguish the great from the good. While consistently good service is very difficult to achieve over the long term, one must believe in it, and pay constant attention to it."
To this end, staff training and morale are key. "I challenge my staff to provide service standards that exceed most patients' expectations. It may sound difficult, but difficult is not impossible," he added.
Dr Heah, whose wife is a doctor with her own practice, has a daughter (22) and a son (20). Working 12-hour days, starting with early-morning visits to hospitals to check on patients, followed by clinic appointments with endoscopy and surgical procedures, often at different locations across the island, is his usual routine. He ends the day by catching up on administrative matters and business meetings with company personnel or other doctors.
With multiple irons in the fire, Dr Heah has much to look forward to, and the outlook is bright. In retrospect, the journey thus far has been nothing short of exhilarating.
"Ever since I was a teenager, I've wanted to be both a businessman and a doctor. Serving patients is among the highest privileges one can have, and it must never be taken for granted," he smiled. "With the listing of HC Surgical Specialists, I've managed to balance medicine and business. Looking back, I wouldn't change a thing!"
- This is an excerpt from Singapore Exchange's Kopi-C: the Company Brew, a regular column featuring C-level executives of SGX-listed companies. Previous editions can be found on SGX's My Gateway website www.sgx.com/mygateway