Thainakarin – Business DNA: Private And Public Hospitals Are A Win-Win by Andrew Stotz, Become A Better Investor
When he was growing up, Dr. Charoen Meensook had no idea what profession to choose. “We didn’t have a concept of what we wanted to be when we grew up,” he said. “Rather we just learned from our elders which professions were good. Listening to their experiences, I made up my mind to study medicine.”
That decision would have far reaching consequences for the bright, Bangkok-born student. After competing for one of 200 spots at Siriraj Medical School, Dr. Meensook graduated in 1967 and then continued his studies in both the U.S. and England, eventually receiving further degrees in gastroenterology and tropical medicine.
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He then returned to Thailand to start practicing medicine and has done so ever since. After working in a government hospital for several years, Dr. Charoen decided to open up his own clinic. When his practice grew too large, he co-founded Thainakarin Hospital in 1993. He helped the hospital survive the Asian financial crisis in 1997 by encouraging his employees to always do “their best and expect the results to follow.”
Today, the hospital’s campus in eastern Bangkok employs 80 doctors full-time and about 300 part-time. There are 250 full-time nurses and about 1,200 staff in total. It has a capacity for 190 inpatients and 2,000 outpatients per day. Its facilities incorporate 24 departments, including oncology and heart surgery.
Company DNA: Thainakarin Hospital
The focus of this interview was to try to understand the company’s DNA. Now that we had a little bit of a background on the company, we wanted to drill down to find the unique essence of what differentiates Thainakarin from its competitors.
To better understand your Business DNA, can you please explain your management style or your beliefs about managing this business?
CM: The first thing, in our minds, is always the health of the patients, and so their safety comes first.
The second thing is that we have to always do our best and expect the results to follow. So we perform our best effort, and then we hope that we get the best outcome even if we can’t always control that outcome.
The first thing, in our minds, is always the #health of the patients
How do you think about your business these days versus when you started the business?
CM: The most difficult part of starting out was our shortage of doctors and nurses—quite the problem! When we began to operate the hospital, we only had a few doctors. I had to take calls almost every night. I worked so hard.
But now, it’s getting better. We have more doctors and a lot more nurses. Many of the doctors who work for the government hospitals also work for us part-time. They might work several shifts a week in the evenings or at night since we are open 24 hours per day.
What market need or niche does Thainakarin fulfill?
CM: At the start of my career, nearly all patients had to go to government hospitals. Patients waited to see a physician for a long time. Some people had to wait even two or three days to see a doctor.
So we thought of building a new hospital that could provide service to those who could afford to pay for timely care. Since those who can afford to pay come to the private hospital, there is now more room for the poor people at the government hospitals. It’s a win-win.
Those who can afford come to private hospitals, resulting in more room at gov’t hospitals
Leader DNA: Dr. Charoen Meensook
How do you promote teamwork? Often teamwork is very hard to encourage among doctors. Doctors think for themselves, and they’re not necessarily team players. How do you deal with this challenge?
We have a meeting that includes both the doctors and the nurses. At the meeting, we discuss all the problems together and find the solutions as a team. After that, the person who has responsibility for the problem will implement the solution based on the consensus. Hence, we solve problems correctly and efficiently.
What is something that people don’t understand about your business that you would like to explain?
I think every private hospital has the same problem. The cost of running the hospital is really high, so the patients have to pay a really high cost. Most people feel that private hospitals charge too much in order to gain high profits, so patients want the hospitals to set a lower price. And often they sue the hospitals to reclaim huge rewards.
However, in reality, all listed hospitals on the Stock Exchange of Thailand have generated net profit margins of no more than about 10 percent or so.
In reality, all listed hospitals on the #SET have generated profit margin of no more than about 10%
Tell us what it was like to weather the Asian Financial Crisis of 1997?
CM: When we started the hospital, we added about 400 new beds, which cost about 400 million baht. At that time, we sold stock worth 300 million baht, but it wasn’t enough. So we had to use foreign loans that offered low interest rates. We borrowed 20 million dollars, which equaled about 500 million baht at that time. Therefore, 800 million baht of capital was used to add 400 beds. At first there was no issue with the loan.
But when the 1997 crisis hit, due to the devaluation of Thailand’s currency, our foreign loan increased suddenly from 500 million baht to 1 billion baht. We were struggling at that time, since the number of customers also declined due to the economy.
Businesses always need great #teamwork and partnerships
However, we were able to fall back on great teamwork. We viewed the business as a partnership. Our major shareholder, Mr. Jatuporn, had worked on these issues for a long time, so we let him deal with the financial stuff, while I dealt with medical issues. We were able to reduce our costs and didn’t have to lay off employees after all. Moreover, the bank could not repossess our hospital, and we were able to continuously grow. Businesses always need great teamwork and partnerships.
- The future is expansion – Thainakarin purchased the land around its current hospital facility in order to build a second hospital. The company also has a new management team to lead this expansion and eventually take over from the first generation of managers.
- Safety first – “The first thing, in our minds, is always the health of the patients, and so their safety comes first.”
- No one man show – Dr. Charoen remembered when he ran his own clinic and faced serious health issues: “I have learned from this that whatever business you do, you should not do it on your own, you should do it as a team.”
- Solve problems correctly and efficiently – At Thainakarin they schedule a regular meeting of both the doctors and the nursing staff to discuss all current problems together and find solutions as a team. The person who gets responsibility for the problem will implement the solution based on group consensus.
- Do your best and results will follow – Perform with your best effort and hope for the best outcome even if you can’t always control that outcome.
Learn more about how Dr. Meensook built a successful career and company on fundamental principles you can put to work in your professional life today!
Read the full interview below.