Thursday 5th June 2003

 

Making health care pay

CEO of nation’s most expensive hospital advising State on efficiency

 
 
 
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Ian Kalloo

Group CEO of Medcorp Ltd

BY JUHEL BROWNE

A teenager, writhing in pain, is brought to hospital for surgery on his broken leg. Standard procedure at most of the country’s hospitals.

But at St Clair Medical Centre, an administrator would probably be enquiring about the families’ ability to pay even as the patient is being wheeled on to the ward for the emergency surgery.

St Clair Medical Centre is perceived by many to be an expensive medical facility making a financial killing by providing services some of which are not readily available in the public sector, mostly to a wealthy clientele.

Ian Kalloo, – group CEO of Medcorp Ltd that owns St Clair Medical Centre, says this perception is actually far from the truth.

In fact, he noted Medcorp’s 50 shareholders are yet to get serious returns on their investment.

“We don’t make obscene profits and I’ll also let you know that no substantial dividends have been paid,” Kalloo says.

“In fact, it’s a bone of contention with some of the shareholders now.The profits that have been made, which aren’t gross, have been reinvested in technology: CT scanners, the latest neurosurgery equipment and stuff like that.”

Kalloo argued people who criticise the cost of the services offered at St Clair Medical are often making comparisons to the public health care sector where most patients do not pay out of pocket before receiving medical attention.

He insisted citizens who receive the so-called “free” public health care are actually paying for it in their taxes and have no idea what it costs to maintain state-owned hospitals.

“If Government had done costings in terms of what they deliver, although it is a free service, then I put it to you that you will realise that St Clair isn’t expensive nor are some of the private institutions,” Kalloo said.

He stressed that doctor’s fees are not included in the bill of patients who use or are hospitalised at St Clair Medical except if they were treated at the Accident & Emergency section which has staff doctors.

“The profits of St Clair Medical, or the lack thereof, is related totally to a combination of provision of medical supplies and services,” Kalloo said. “It has nothing to do with doctors’ fees.”

When Medcorp first acquired St Clair Medical nine years ago it was on the brink of receivership and Kalloo said the company does not intend to revisit those financial difficulties.

In an unapologetic tone, he noted, “My priority as the CEO of this organisation, (and I am a businessman and not a doctor), is to take this and make it the best investment for the shareholders who have hired me. That does not preclude me saying that dividends won’t be paid in the future and I am not running this place as a business, because I am.”

However, Kalloo said there are always exceptions to the rule where life and death situations outweigh costs.

“We have unwritten rule here but it is a rule nonetheless and that’s what I work with. I am one of the few people who can give clearances – in other words you haven’t paid the deposit, or you don’t have the appropriate insurance etc – to say to go ahead with health care.

“Anybody who is critical, meaning dying, we deal with it and then we look to see how we deal with the ongoing care.

“In other words, if it is there isn’t appropriate financing or funding in place, we make the arrangements to transfer them back to Port-of-Spain General if that is what is required.”

What is Medcorp Ltd?

The St Clair Medical Centre, once called Park’s Nursing Home was acquired by Medcorp Ltd, a group of private medical facilities, in 1994.

Medcorp also owns the following facilities:

Good Health Medical Centre,

Doctors’ Radiology Centre

Caribbean Heart Care/Medcorp Ltd

Medcorp group CEO Ian Kalloo said the company is a private enterprise which has 50 shareholders who are businessmen, doctors and some private investment companies.

Kalloo refused to identify any of Medcorp’s shareholders.

He also refused to reveal the company’s profit margins or any details concerning the group’s financial performance.

St Clair’s business

St Clair Medical Centre is primarily a tertiary care provider of health services which involves the treatment of serious ailments such as heart disease, diabetes and cancer as well as major surgeries.

Fees

Kalloo explained patients usually pay an advance deposit on what St Clair Medical perceives to be the cost of the relevant service provided.

Apart from the doctor’s fee, St Clair Medical’s fee includes:

Accommodation

Room rate

Medication by usage

Operating theatre by usage

Nursing surcharge by usage.

If surgery is involved the anaesthetist charges are separate.

Public health care for profit?

Government has sought the advice of the executives of private medical facilities like the St Clair Medical Centre to find ways to improve the efficiency of public health care facilities.

Ian Kalloo is one of several private hospital executives now advising Government on this initiative.

“I don’t want to pre-empt any findings of the Vision 20/20 sub-committee but there are a lot of options. Maybe they charge for a service. Maybe they have a National Health Insurance Plan that is totally geared towards health and is managed separately from the NIS fund that we have,” Kalloo says.

“Maybe there is a mandatory private insurance to cover certain types of health. There are a lot of different alternatives and each one should be discussed at length to determine what’s the best way forward.”

Kalloo was interviewed at his office at St Clair Medical on Monday afternoon.

He had just attended a meeting of the 20/22 sub-committee where Medcorp’s chief of staff Dr Ronald Henry made a presentation on the various financing opportunities available to public health institutions.

Henry, a practising cardiologist, made the presentation as the president of the Private Health Institutions Association which was formed to help in the delivery of total quality public and private health care throughout the nation.

Kalloo is the PHIA’s administrator.

Asked if he felt private institutions like St Clair Medical could be the prototype for the public health care institutions of the future, Kalloo said, “We do provide a more consistent delivery of health care services to our niche markets. And if that could be looked upon and tried and mirrored in terms of the public health sector, then that’s fine.”

He said Government has been looking at the issue of the cost of public health care since the State has long suffered from the deficiencies of an understaffed and ill-equipped system that receives limited State funding.

Kalloo’s point is that the public may not have to pay any fees when they go to a public health care facility like the Port-of-Spain or San Fernando General Hospitals because they have already paid for the services when they pay taxes.

As such, he alluded, the State has been subsidising public health care to the detriment of the citizens it is meant to serve.

“If you’re not charging revenue for your services at the full cost, in other words your full cost plus a mark up, then you’re going to run into problems eventually because you’re spending more than you’re earning,” Kalloo said.

“And once you’re spending more than you earn, you’re going pull back when it comes to paying bills, doctors, nurses or buying pharmaceuticals. What is going to happen is you’re going end up in a problem in delivering quality health care.”

These are well known.

Kalloo sees a link between the problems of the nation’s public health care system and the way it is currently being funded.

“I am saying there is a lack of awareness that health care services are extremely expensive and that could be a reason why they are having all these problems in the public sector,” Kalloo said.

He said uncompetitive salaries for doctors and nurses could lead to situations where the health care professionals go to foreign countries which offer higher salaries, the latest equipment, “the correct stocks, the linens, whatever it takes to run a hospital.”

Since the beginning of 2003, there have been at least two impasses between doctors and the Regional Health Authorities over wage packages.

Many patients complained they received improper or no treatment at the affected public hospitals during these impasses.

Kalloo asserted private hospitals like St Clair Medical benefited minimally from the impasses. “Where the public sector was not able to deal with the sick and ill people at the time, we had to come to the fore to assist,” he explained.

©2003-2004 Trinidad Publishing Company Limited

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