Interview with Parkway Health COO, Dan Snyder

David Williams: This is David Williams, CEO of MedTripInfo. Dan Snyder is Group Executive Vice President and Group Chief Operating Officer for Parkway Health, the leading hospital group in Asia. I met Dan yesterday at his office in Mt. Elizabeth Hospital in Singapore.

We spoke about Parkway's performance on quality, outcomes, and economics. Dan also shared his views on accreditation, insurance coverage for US patients, and approaches to managing concerns about malpractice and complications.

I started off by asking Dan for his overall take on international medical travel.

Dan Snyder: My overall take on medical travel is that it's going to happen. I've been on TV a few times, ABC TV in the US, interviewed by Dan Ford from northern California ABC. And we had a beautiful woman come over here. She's 54 years old, was retired, her husband had passed on. And she was diagnosed with breast cancer at UCSF, and they said, "150 grand, we can cure you." And she said, "150 grand and I will be out of my house and poor and won't be able to enjoy my grandchildren."

So she got on a website, found Singapore, found this hospital, came over, had her surgery, went to Bali for a couple of weeks, came back, had radiation, went back to the States, cured. Thirty-five grand total to spend on healthcare, travel, and hotel.

David: Right.

Dan: So at this point, it is healthcare economics. And yeah, the same interview, the Chairman of the California Medical Association stood up and said, "Patients will die, " and "There will be blood on the beaches, " and "This is terrible." And it's like, "Hmm. That's what they said about making cars in Japan."

David: Right. [laughs]

Dan: I don't know. I share that with you because we're not actively out marketing ourselves in North America, but we sure have a lot of people like you that drop by and say, "Hmm. What's going on?"

David: You have hospitals in other parts of Asia. What's it like to run hospitals elsewhere in Asia? Is it closer to Singapore, closer to the US, or is each place really its own independent kind of environment?

Dan: Well, let's see. One of my favorite quotes, Tip O'Neill: "All politics are local." Well, all politics in healthcare are local. We operate hospitals in India, Malaysia, Brunei. We now have surgical centers in China. The terminology used in Asia is different. Quite often, medical centers are actually medical office buildings.

David: OK. Not like an academic medical center.

Dan: Yeah. In the United States, when you say "medical center, " it implies a big hospital, clinics, everything kind of rolled into one.

David: Right.

Dan: Here, you're at the Mt. Elizabeth Hospital, and the Medical Center is a building where all the doctors' offices are located. So we operate hospitals, day surgery centers, ambulatory medical clinics, through several countries in Asia, within an integrated healthcare system, which we are. Kind of like Banner Health in Arizona.

David: Yeah.

Dan: We operated 20 hospitals, all over the western US, anywhere from Fairbanks, Alaska, to Denver, to Arizona, to Reno. The standards of care, the way we treated our people, the service standards, the business systems, were all integrated. So, in our system, whether you're India or Malaysia or Brunei or China, you, generally speaking, can expect the same standards in care.

Languages are always a challenge. One of the reasons, I think, that Singapore is absolutely the most logical and attractive source of care for medical travelers is because of the language, the stability of the government, the beauty of Singapore, the ease of getting around Singapore.

You walk into this hospital, most of our doctors have been trained in the US or the UK. They all speak very good English. The nurses all speak English. They have to pass the language proficiency exam. So it makes it very easy to feel very much at home in a hospital.

David: What do you see as some of the differences between medical travelers from different places, like Europeans compared to Americans, compared to people from other parts of Asia or the Middle East? Are there distinctions among them, or is it more on a patient-by-patient basis, especially in terms of expectations or the sort of things that people come for or how you treat them?

Dan: I think the expectations are the same. I use the analogy, when you get on Singapore Airlines, you have every expectation to believe that the quality of the aircraft and the quality of the maintenance and the quality of the training of the flight crew is very good.

You have every expectation that you're going to take off and land, and along the way, the service experience on the aircraft is wonderful. I almost dread going back to the United States now, because I have to fly on Delta or US Airways or United inside the US, where you truly feel as though you are cattle being herded on a plane: "Sit down, be quiet, and don't ask for anything."

So, what patients expect, they assume they're going to walk in the hospital and they're going to receive the best clinical care that's available anywhere in the world. And that means doctors that are extremely well-trained, following the best clinical pathways and guidelines, working as members of a team and with the nursing organization. And then, the service would be very good--with exceptions. That's the way it happens here.

About 40 percent of our patients are from outside Singapore. Now, the American embassy here goes out of its way to make sure that military, foreign service, diplomatic corps--folks that need healthcare anywhere, really, in Asia--they'll get them here as quickly as they can, because our hospitals in Singapore, and in particular the Gleneagles Hospital and the Mt. Elizabeth Hospital, have a long tradition of serving the expatriate community and doing it very well.

David: Right.

Dan: What's very interesting is there, the doctors, in general, when we talk about the potential for medical travelers coming here from North America, they get kind of uneasy, because Americans are viewed as being extremely litigious. America has the highest per capita rate of lawyers of anywhere in the world, and the sense here and in many other countries, is that you don't want to really deal with Americans unless you have to, because if they don't like the way you look at them, they'll sue you.

David: Yeah. You're concerned about that even from within a different legal system because they worry more about the attitude and less about the actual laws in place.

Dan: Singapore is a reflection of the British form of government and judicial system. So Singapore has a wonderful judicial system that works. I will tell you that people generally here in Singapore and across the Asia are less litigious. They take a little bit more responsibility for their own actions.

So there is the dealing with different patients coming from different markets. They want the best people providing the best medical care, really good service and then a fair price, a fair price. We can provide just about anything at the Parkway Health system for roughly half the cost that it would cost in the US. We do it just as well.

David: What are the drivers of the cost difference?

Dan: Labor is one. Cost of pharmaceuticals is less. The...

David: The cost of Asian drugs is significantly less?

Dan: Yeah. You know why do patients travel to Canada and Mexico for drugs? Because it costs a lot less than the US.

So generally, the cost basis here is less than the United States. Now it's not less than that it is in Malaysia or Thailand or India, but the difference is that you can come to Singapore, which is wonderful. You could have healthcare, very good healthcare and enjoy yourself in a city state. I have my two teenage boys over here from the US; they're college boys, 19 and 20. And I'm just not worried about them. You can walk anywhere in Singapore in the middle of the night, down any dark alley, you would be perfectly safe.

All the horror stories you hear about Singapore, about the canings, if you spit out gum... Oh, they're absolutely not true. And yes, if you go out and key up a car, bash in some windows, break in and then try and beat up the police - well yeah, we may cane you a couple of times. But I tell you - they will never do it again.

David: Right. [laughs]

Dan: So I've lived here for over a year and there's nothing in my lifestyle here that's any different than my lifestyle in Phoenix, Arizona, except there are no bullets and nobody has stolen my Corvette yet.

Actually I don't have a car here but I don't need one.

David: Now on the cost side, maybe tying it back to the litigiousness, it's always difficult in the US. There's a lot of dispute about to what degree the costs were driven by defensive medicine. Some are hidden costs, with additional tests, and medical procedures and extra hand-holding that's going on. Is there any discernible difference you can see, being an executive here versus in the US hospital system that would support any of that?

Dan: Yeah. Sure. It's true. It's well-documented that in the United States when you show up in the emergency department, the emergency physician, trauma physician or whoever is on call, they're going to cover there behind.

I have life-long friends who are physicians. Both of my children, Rob and Ben, each have a godparent, a former Navy physician. I'm alive today because of a Navy doctor. I just want to be clear that physicians in the US do practice defensive medicine because if you don't do it, and you don't document it, it didn't get done. So documentation and covering your self, so to speak, is a big part of US healthcare.

The other part of US healthcare is that in US healthcare, you do everything possible to sustain life till the last possible moment for everybody - regardless of will they pay, regardless of... That's just how the American healthcare system works today.

Here in Singapore, the practice patterns are... I'm not going to tell you that they're that different, but they are probably not as defensive as in the US.

First of all, just like any US healthcare system, we're driven by a strategy map and a balanced score card that focuses on our people quality service and enhancing growth. And our mission is simply to make a difference in people's lives. We're organized like any other large multi-national corporation. We have a CEO. We have a great board of directors. Texas Pacific Grou are our partners and majority shareholder.

David: How long has that been the case?

Dan: Two years. And Texas Pacific Group is reinvesting in the company. We've organized here in Singapore and then across Parkway around eight clinical programs, just as Intermountain Health Care does in the United States and Intermountain Health Care is considered the best healthcare system in the US.

So what I learned from them is what we did at the Banner Health and what we're doing here is organizing around cancer, hearts....

Transplant surgery is a big deal in this part of the world. Neurosciences, so on and so forth. It's got really good doctors. Really good. They trained at Cleveland, at MD Anderson, at UCLA, UCSF -- phenomenal doctors. Good nursing team. So you'll always want to provide the best clinical outcomes and that we measure aggressively.

We're using the standard CMS measures that are used across the United States for hospitals and doctors. We're using the same measures here plus measures associated with our clinical programs.

David: What's the role of some of these accreditation groups like JCI? Are they... I saw in the Parkway video, a talk about JCI accreditation being important. Is that viewed as important just as a seal of approval? Is it important for processes or is it just something that needs to be done - as sort of a basic floor upon which you build other programs?

Dan: What you just said - JCI is a floor. It provides the basic framework to ensure that the basic processing systems and procedures are in place for safe patient care. Like many organizations in the US, we're going well beyond that floor. If you're going to be treated for cancer, you want to know what the survivability rates are for patients that are treated for cancer at Parkway. If you're going to come here to have total knee procedures, you're going to want to know what the infection rate is for total knee procedures.

JCI provides the best global stamp of approval for the fundamentals. About a year ago, these hospitals were awarded JCI accreditation, and there are processes and procedures at these hospitals today that are different than pre-JCI. JCI means money; it means, generally, facility upgrades. It's not an insignificant fee to get that little stamp, but it is recognized globally now as the basic stamp of quality for hospitals.

David: Speaking of insurance, what's the future there in the near term, or the longer term, for Americans being able to be covered by health insurance that would include or would encourage them to go abroad for care?

Dan: I predict that, this year, many insurers will offer basic plans or a premium that says, if you will agree to, say, travel to Singapore if you need to have your knees done, then your premium will be less. Your out-of-pocket will be less. We'll take care of your airfare and all that. I think that this year, we'll get going a bit; the year after, you'll see it take off.

This hospital today is running at over 80 percent occupancy; our other hospitals are at 70 percent occupancy here in Singapore. One thing we try to be clear on is we're not clamoring for patients.

David: Right. Do you have a sense of what the potential is if you think about premium savings from a theoretical perspective if the capacity overseas were not an issue?

Dan: It would cut it in half, if you had the right number of subscribers that agreed to the terms of the plan. Now, it's not going to cut the cost of US healthcare a lot, because the reality is that 80 percent of the healthcare dollars that are spent in a human being's life in the US are spent in the last six months of life.

They now have a life-threatening disease, which is generally a reflection of being overweight your whole life, you've eaten the wrong foods, you haven't exercised, you've smoked. So, here you are, you have congestive heart failure, or your liver or kidneys are dying.

So, then it's OK, we're going to stick in an assist device, or we'll put you on dialysis. That's the issue for US healthcare. Nobody in those Democratic debates is going to fix that, because it's too political. Seniors vote.

David: Right.

Dan: Until the United States has a severe recession or a depression, it's not going to happen because we're a nation with the world's largest economy. My gosh, my mom worked for thirty-five years in Chicago city schools and paid her Social Security and Medicare; I want what I paid for.

David: To the extent that the commercial payers, let's say, because we don't expect Medicare to be getting into this racket anytime soon... the commercial payers start to offer premium reductions or plans that incorporate hospitals that are within their network but outside of the country. How will they deal with the concerns about malpractice or liability? They're sort of putting a stamp of approval on the overseas facilities. How will they get past that hurdle, do you think?

Dan: Well, there are a couple of options. Number one is surgical complications coverage. If you have a surgical outcome which is not quite what you expected, which happens... You screen the patients carefully, good doctors, good nursing, they're very rare. When they happen, they're very expensive. So that's one.

Number two is that anyone in Singapore can sue. You can sue for malpractice. There's nothing to say you can't sue for malpractice. That's a big issue with North American insurers, who are saying, well, they're your patients; you have to take care of your patients. You have to help us deal with the risk issue associated with the American standards.

David: Right.

Dan: And the big part is, if something doesn't go quite right, everybody gets informed consent. Sometimes, things don't go just perfect. If that happens, we'll take care of you. We'll do corrective surgery. We'll cover the expenses for your continued stay and your loss of income.

David: I could ask a hundred thousand more questions, but I'm going to stop now because I'm sure you have a few other things to do with your time.

Dan: The good news is that, for Americans who can't afford access to healthcare in the US, there are options.

There's a wonderful, English-speaking tropical paradise called Singapore. When you fly Singapore Airlines, I always hate to get off the airplane. It is very small, very flat. And for insurance companies and for industry in the US that is trying to provide health benefits for their people, something different has to happen.

So, we're part of the solution.

We're not the cure.

David: I've been speaking with Dan Snyder, chief operating officer of Singapore-based Parkway Health. Goodbye for now.