The new mix of healthcare facilities – Medical Cities as a cornerstone of a successful healthcare system ( ? )

1. The new mix of healthcare facilities – Medical Cities as a cornerstone of a successful healthcare system ( ? ) Fried Oelschlegel – Healthcare Development Holding Co. ; Jeddah 01. December 09.40 am

2. Healthcare Cities – a business case • Developing large-scale healthcare projects to meet various healthcare needs • Identifying and selecting the right service provider to meet new demands • Lesson learnt from regional medical cities ??? F.O. Healthcare Cities - 2 -

3. Medical cities – are they truly cornerstones ? The cornerstone (or foundation stone) is derived from the first stone set in the construction of a masonry foundation , important since all other stones will be set in reference to this stone, thus deter-mining the position of the entire structure. Do have Healthcare Cities such directing importance ? Painting of Allyn Cox (1896-1982) depicting the ceremonial laying of the building's first corner-stone in 1793. During his presidency, George Washington (1732-1799) performed the Masonic ritual over the Capitol ‘s and read the inscription on a silver plate that was laid in place with it. F.O. Healthcare Cities - 3 -

4. Sales slang is dominating our language and is inflating “ bubble terms “ • Healthcare Cities • Medical Cities • Centre of Medical Excellence • Cutting edge approach • State of art • One stop shop • Integrated healthcare • Holistic approach • Eye catcher • Large scale projects “Healthcare City” is showing about 54,300,000 results (0.17 seconds)  “Medical City” is showing about 120,000,000 results (0.16 seconds) “ Hospital “ is showing about 367,000,000 results (0.38 seconds)  F.O. Healthcare Cities - 4 -

5. What makes the difference …… What is the difference between Healthcare / Medical Cities and Large scale Hospitals which are attractive enough for physicians for setting up their offices close located to the hospital; creating by this way a cluster of healthcare facilities in different kind and level of services ( in our management slang “ an integrated solution ; “ a holistic approach, a one stop shop ….” It seems – there is no any real difference – but the difference is in regards of Healthcare/Medical City: the design and planning of such processes “ at the green table “ based on more or less as realistic evaluated assumptions but with the strong driver of being “ prestigious” Healthcare Cluster : self sustained organic grow over a long period of time without a previous designed and directing strategic business & development plan F.O. Healthcare Cities - 5 -

6. Founded 1980; start with 200 beds (now 554 beds; > 1 Mio Patients per year); total investment 90 Mio Baht = 2,975 Mio US$; since 1989 stock listed Founded 1782 by Dr. John Warren; the last relocation and construction in 1906 ; total costs incl. land less than 3 Mio US& Founded 1656 by Ludwig IVX; 1789 the world biggest hospitals; Construction Cost 1684 less than 500,000 US $ Land donated( US$ 7 Mio) by Johns Hopkins in 1883;construction finished 1889 at costs of 2,050 Mio US$ F.O. Healthcare Cities - 6 -

7. Four of the worlds “Top Ten”; also of top 50… • No one of them is considering themselves as a “ Healthcare / Medical city; • non one of them was growing through real estate business and engagement of 3rd party service providers • The most of them in Europe and US are 200 years old or older; in Asia older than 30 years • All of them have start under very modest conditions , with 200 beds or less and with total investments below 3 Mio US $ • All of them have changed the shape, size and location more 3 times • The most of them are legality Non-For-Profit Organizations • All of them have passed thought times and difficult periods as wars, civil wars, finance crisis, natural disasters • All of them” breathing” a strong ethical code of being committed to patients first F.O. Healthcare Cities - 7 -

8. It needs a lot of time , pressures, fire, passing bad conditions , recognizing changes & opportunities, courage to fight ( if necessary ) before a hospital will go the way from an ordinary stone to a shining a diamante HDH – ............. 8

9. Hard facts • Market Study • Feasibility Study • Due Diligence • Business Plan • Master Planning • Strategy Plan • 100 Consultants • 1000 Meetings • > Billion of US$ LEADERSHIP F.O. Healthcare Cities - 9 -

10. Major drivers for Healthcare/Medical City Projects These drivers don’t match this spirit and culture which has made the mentioned hospitals to world class centre of excellence ; • National / Individual Prestige • National ( regional ) and International Competition ; driven by promises of a high profitable Healthcare Tourism Business • the lure of developing “ new “ Real Estate Business fields – beside Golf Clubs also Healthcare • the Healthcare Industry – the project developer, architects, the contractors, the medical device & equipment industry • to meet various and rare healthcare needs for citizens & residents who can afford such services provided by these “ large scale healthcare projects • at least: closing the gap between existing healthcare capabilities and the necessity of offering high advanced care – in particular tertiary & quarterny care to make the region more attractive for further national & international investments F.O. Healthcare Cities - 10 -

11. Service providers The simple question is : Do it or let it do it ? And why ? • This question indicate the core difference between the mentioned world class centre and the theory & practice of Healthcare / Medical Cities which developing the projects based on real estate business practices. • In the Real Estate Business is not so much important what kind of service will be provided but what will be the leasing rate and the profitability. Ayurveda & SPA might be more profitable than – for example – Geronto-Psychiatric Medicine which would be urgent necessary but no any provider can be identified or attracted to do this hard job. F.O. Healthcare Cities - 11 -

12. Medical Cities - cornerstone for successful healthcare systems – ( a hypothesis ) My clear answer is : NO ! Medical Cities ( or however named ) are neither Cornerstones for successful health-care systems either necessary for developing healthcare . Worldwide are many healthcare systems successful established without such projects and with no desire to follow this idea which came up in the 90ths of the last century . A cornerstone gives mandatory the direction how the building should be erected. If we would follow these already laid cornerstones in different countries we would run in a fatale direction. Medical Cities are o real-estate option for developing large scale healthcare facilities - not more & not less F.O. Healthcare Cities - 12 -

13. A WORD OF THOUGHT… It is not the strongest of the species that survives, not the most intelligent, but the one most responsive to change Charles Darwin( 1809 – 1882 ) F.O. Healthcare Cities - 13 -

14. ? Do You Have Any Questions? ? ? F.O. Healthcare Cities - 14 -