Big hospitals look overseas to expand efforts

Need for increased revenue combines with altruism

In Santiago, Chile, doctors from Johns Hopkins Medicine International are working with a private hospital to set up the first cancer center of its kind in the country.

In Panama City, Panama, a team of Hopkins physicians helped set up a transplant program at Hospital Punta Pacifica, which enabled doctors there to perform the country’s first heart transplant in 2016.

In Al Ain City, United Arab Emirates, a team of Hopkins executives manages Tawam Hospital. In Shenzhen, China, Hopkins is helping to create a medical school, and in Toronto, Hopkins doctors are using telemedicine to provide second opinions on complex medical cases.

In the last two decades, the Baltimorebased institution has expanded its footprint far beyond the United States.

Hopkins is one of several mostly large academic medical institutions in the United States launching overseas ventures that go beyond the philanthropic and educational involvement hospitals traditionally have pursued in other countries.

The new expansions are business deals aimed at opening up new sources of revenue as changes in health care and other pressures shrink margins back home in America.

“With all the changes going on in the U.S. health system, a number of them think they need to be somewhat opportunistic and expand their portfolio,” says Dr. Randolph Gordon, a managing director of the consulting giant Deloitte who works with large health systems.

Hospitals such as Johns Hopkins typically get 5 percent to 10 percent of their revenue from international patients, says Ken Rodgers, director and health care ratings analyst at S&P Global Ratings. That includes foreign patients who come to the United States for care.

Hopkins would not divulge its international revenue, but says it is a small part of the business.

Overseas expansion can also open up new research opportunities. It exposes the hospital name to a larger audience.

Hospitals also expand for altruistic reasons. “Many believe it is core to their mission to take their knowledge and experience and share it with others,” says Ed Thompson, a former executive director of Johns Hopkins Medicine International.

Massachusetts General Hospital in Boston announced in May that it is helping Jiahui Health in Shanghai open a hospital. The Cleveland Clinic opened a 364-bed hospital in Abu Dhabi in 2015. The hospital also manages Sheikh Khalifa Medical City, a 586-bed acute-care hospital in Abu Dhabi, and recently bought a health care facility in London.

The Mayo Clinic and Partners Harvard Medical International have also expanded to other countries.

Other countries are gladly opening their doors as they look at health care as a new industry. Some, such as Saudi Arabia, have long sent people to Baltimore for care, but would rather be able to offer treatment closer to home.

“That would be seen as addressing a really big deficit or gap, which I think they find a bit troubling,” says J. Stephen Morrison, director of the Global Health Policy Center at the Center for Strategic and International Studies.

“That is, the idea they are so damned wealthy but haven’t invested sufficiently enough in developing their own high quality-health system.”

For emerging markets with little health infrastructure, officials are seeking the expertise, as well as the cachet, of a medical powerhouse such as Hopkins. The name and reputation bring credibility, and can help attract patients. “They may not have the resources or clinical experience to build and develop a hospital,” Gordon says. “So they reach out to U.S. health systems for that.”

Some of the hotbeds for U.S. hospital development are Europe, where executives are looking to build modernized digital hospitals; the Middle East, where officials are looking to expand health systems to serve an aging population and deal with chronic diseases such as diabetes; and China, which wants to build more hospitals in the next decade to serve its massive population.

The University of Pittsburgh Medical Center took its first step 20 years with an organ transplant facility in Sicily, Italy. The hospital now provides advisory, consulting and management services to hospitals around the world, with a focus on five areas: Ireland, Italy, Colombia, Kazakhstan and China.

“Those countries are less unstable and not as volatile as others,’ says Charles E. Bogosta, president of the University of Pittsburgh Medical Center. Bogosta says political volatility has prevented hospital development in some countries. He says opening overseas can be a long, complex process that can be hard to sell to hospital boards.

Hopkins’ overseas ventures span the globe: Canada in North America; Chile, Colombia, Brazil, Panama, Mexico, Peru and Trinidad and Tobago in Latin America and the Caribbean; Britain and Turkey in Europe; Lebanon, the United Arab Emirates and Saudi Arabia in the Middle East; and China, Japan and Singapore in Asia.

When considering an international project, Hopkins looks for a strong partner that wants to improve the health of its community and not just turn a profit, says Pamela Paulk, the president of Johns Hopkins Medicine International. The partner must have a desire to further science and be willing to adopt strict safety standards.

Hopkins sends staff out to inspect its partner hospitals. It manages some hospitals and consults with others. It is paid fees for its services, Paulk says, which cover the costs of running Johns Hopkins International.

The remaining revenue is divided between the hospital and Hopkins.

“We go there and determine what it is that they need and reach into the larger Johns Hopkins system to determine the best strategy,” Paulk says.