Acıbadem is a leader in the Turkish healthcare sector and also operates internationally. What are the greatest challenges in operating in countries that have different legal arrangements and health systems?
Acıbadem has been serving outpatients from 21 hospitals in four countries; we have a total of 14 medical centers and 30 representation offices in 18 countries. We provide direct health services in Bulgaria, Macedonia, and the Netherlands in addition to Turkey. Each of these has different systems and dynamics in relation to each other. An interesting aspect of the health sector is that although one may operate in different regions, the fundamental problems are similar around the world. For example, we operate in 10 countries as IHH, though the problems we discuss with our board of directors are usually the same. We encounter the lack of qualified health personnel, growing costs, ways of using efficient work models against raising costs, as well as the impact of health policies and practices on the private sector. When making investments in a country, it is important to understand the relationship between the private and public sectors, as well as the payment system in the country. In some countries, we have a strong and sound foundation of general health insurance, while in other countries there is the exact opposite. In addition, the health sector is subject to a high degree of regulation from many different angles. Because of that, one has to provide the best service by prioritizing both patient safety and patient health. In the meantime, you plan and expect to earn the return you desire. This is not an easy task.
Acıbadem entered Bulgaria and Macedonia through acquisitions, whereas it began its operations independently in the Netherlands. Why were these separate models selected?
When entering a country, you evaluate market entry options from many different angles, and many different factors can play an important role. For example, both Bulgaria's and Macedonia's health sectors are developing and are far behind in terms of regulations in comparison to Turkey. In such cases, the fact that there are already profitable elements within a certain quality of service justifies the acquisition. Besides, it is crucial to have local partners, especially in acquisitions, that understand both the country and the health sector well. The presence of partners that are familiar with the dynamics of the country is an important catalyst for one's goals. The Netherlands has a relatively highly developed socioeconomic structure, and its health insurance system is fairly developed. Using this structure in the Netherlands as a guide, we wanted to test ourselves by investing in an already-developed country for the first time. In summary, we took our model to both Bulgaria and Macedonia. Within the framework of our growth strategy, we prefer to move forward with both new hospital construction projects and possible acquisition projects. Our growth strategy abroad will continue on these foundations. This will vary slightly depending on the country and the conditions in which we aim to enter. Our growth strategy focuses on regions close to the areas where Acıbadem operates, rather than focusing on certain countries. In this context, we can count the Balkans, Central and Eastern Europe, the Middle East, and North Africa.
How has Acıbadem University contributed to the group's employment policy? What role does Acıbadem University play in educating doctors in the region and Turkey?
Acıbadem University, which provides education in the field of health sciences and reflects our pioneering and holistic perspective in the health sector, is my social responsibility project. With a capacity of more than 4,000 students and 100,000sqm of indoor space, Acıbadem University educates health professionals of the future with its world-class academic and technological infrastructure. In this sense, Acıbadem University has a very important function in the terms of training qualified human resources. Young people who graduate from different faculties are not only doctors, but also nurses, health technicians, and administrators. As a result, individuals blended with the Acıbadem culture at the start of their educational lives continue to be a part of our family. In this respect, Acıbadem University has a significant complementary power. It is one of the best health science universities in the whole world. In addition to our strong academic staff, we also have our CASE Clinical Simulation and Advanced Endoscopic and Robotic Surgery Training Center, one of the most advanced medical simulation training centers in the world. We demonstrate our difference with our advanced technology student laboratories that offer practical training in the associate and undergraduate programs. CASE, our center of clinical simulation, is accredited by Europe and the US. It is also one of the two centers in the world that has a certificate of excellence. One of them is Acıbadem University and the other is University of Toledo in the US. In four years, more than 15,000 specialists from abroad have been trained in this simulation center. One needs the highest test scores to apply to Acıbadem University's school of medicine.
Over the next 12 months, what are Acıbadem's primary objectives?
2018 was a difficult year for our country as a result of the economic fluctuation and the devaluation of the lira in the second half of the year. Nevertheless, we managed to increase our revenues by 32%. The volatility of foreign exchange had a negative impact on our foreign currency debt. Nevertheless, Acıbadem has always succeeded in getting out of crisis. In 2019, we are taking important steps to reduce our foreign currency debt and strengthen our balance. In the short term, through the refinancing of our loans and through capital injection in the company, we plan to minimize our risks by reducing both our foreign currency debts and our remaining debts in more favorable conditions. Thus, Acıbadem will be ready to make significant progress in the near future as a cash generating company with a strong balance sheet. We have two hospital investments in Istanbul, and we continue to work on them. We are doing it slowly to see what is ahead.