Monday, Dec 10, 2018
Health | Asia-Pacific | Japan

Healthcare, Japan

ITEC: bringing its medical management expertise around the world


4 months ago

Johtaro SEKI, President of ITEC
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Johtaro SEKI

President of ITEC

One  of  the  greatest  domestic  challenges  for  Japanese  healthcare  companies  is  the  nation’s  rapidly  aging  population,  which  is  expanding  the  demand  for  late-life  healthcare  services.  As explained by Johtaro Seki, this challenge  represents  a  big  opportunity  for  ITEC,  which  has  established  itself  as  Japan’s  leading  healthcare  service  management  consulting  firm. Mr. Seki also discusses how the company is brining its expertise global, and discusses ITEC’s work in Cuba, Vietnam and the ASEAN region, and explains how ITEC helps its hospital clients in everything from planning and design, to hospital operation solutions, logistics systems and ICT services.

 

Can you give us a brief description of ITEC?

Our mission is to propose a positive medical management environment demanded by hospital managers and medical providers all over the world. We conduct our activities based on the rich expertise to propose to our clients the solution that best match their requirements. ITEC identifies itself as a consulting firm for “the total healthcare service management.” From Japan to the world, throughout the entire lifecycle of a hospital, we provide consulting services such as hospital planning and designing, supervision of construction work, ICT integration, Medical Equipment installation, etc. Furthermore, we offer advisory for the daily operations, business management and consultation services, and so forth.

 

Can you tell us more about your track record?

In Japan only, we have conducted over 1,500 consulting contracts in terms of hospital projects with bed capacities of more than 300 – making ITEC the most experienced hospital consulting company. We also have a long track record in Africa, the Middle East, South America, Europe and Asia. Overall, we have provided our services to over 90 countries around the world.

 

You mentioned that consultants became recognized as a job in the 80s. How did you work to get the consultation profession regarded and respected by the public?

Before the JAHMC was established, we participated in the amelioration of Japan’s three large hospitals. The success we experienced was enough to prove the importance of the third party professionals who could ingrain new ideas, independent opinions and evidence for the client’s decision making. One of our greatest achievements was to demonstrate that having the proper consulting methodology was as important as effective hospital construction. We also proved that once the facility was constructed, effective hospital management was key to long-term success.

 

Can you tell us more about your activities in the Japanese market?

In Japan, nearly 80% of our clients are publicly owned hospitals; with 44% of establishments being municipal hospital and 35% being semi-public hospital; while 70% of our Japanese hospital client have over 300 beds.

We provided our services to top referral cancer hospitals which are some of the most prominent cancer-research institutes worldwide. We also collaborated with a national university hospital, which is today recognized for its R&D capabilities. Other projects include top referral hospitals with sophisticated features such as highly advanced technologies, for instance of heavy iron beam therapy. 

 

What has been the impact of Japan’s decreasing demographic on ITEC?

The Japanese population has already aged. In comparison to the rest of the world, Japan’s population is predicted to drastically decrease. In 2025, Japanese baby boomers will become 75 years old, and the ratio of seniors (+65 y/o) against the total population will reach 30%. Consequently, it is expected that medical expenditure will keep on growing. By 2025, it is expected that around 50% of the total medical expenditure will be spent on people aged 75 years old.

To limit medical spending, the government is trying to transform the current structure of the healthcare system into an integrated community care system. Instead of centralizing medical care in hospitals, the public sector wants to integrate homecare, medical care, long-term care and life-support services within each community base. The government is also trying to reduce medical expenditure by diminishing healthcare packages and lowering pharmaceutical unit cost. Under this scheme, the number of hospitals, which are our potential clients, will drastically decrease. In 1993, there were 9,844 hospitals in Japan. As of October, 2016, that number has shrunk to 8,442. Despite this shrinking number, Japan still has many hospitals in comparison to the rest of the world. In Japan, there are 13.17 beds per 1,000 citizens. In the USA, that number is stuck at 2.83.

If you look at the number and location of hospitals here in Japan, medical facilities are scattered throughout the country, which, from the national scale point of view, resulting in decreased efficiency. Since Japan’s demographic is pushing the country to centralize around large cities, medical facilities are being forced to merge with one another. These mergers lead to an increase in size, staff and a multiplication of competencies and parameters. At ITEC, we developed consulting services to drive these mergers towards efficiency and success. For example, we have gained an acute expertise in re-designing traditional medical facilities into institutions capable of catering for long-term care services. In the near future, many other developed economies are expected to face similar demographic issues. Because we have faced this challenge before, we will be able to share our expertise and experience with the rest of the world.

 

In front of this shrinking demographic, what is your strategy to pursue corporate growth?

Developing countries in the Asian region are currently living a time of demographic and economic growth, with income levels on the rise. Based on the economic and social situation of ASEAN nations, we expect that the demand for healthcare services and facilities will drastically rise.

The potential markets in those developing countries surely exist in terms of simple calculations regardless of the gaps or differences on medical systems, related laws/regulations, situations etc. in those countries. Today, for example, the average number of beds per 1,000 people stands at 4.7 for the OECD nations. In Indonesia, that number is stuck at 0.6. To reach the OECD average, Indonesia would need to build around one million extra hospital beds. Vietnam would need 200,000 extra ones, and Turkey would have to develop an additional 150,000. In Turkey, it is estimated that over 1 million individuals are born every year. This booming demographic creates a necessity for new hospitals. To increase the number of available facilities, the government has no choice but to support PPP projects.

 

Does your strategy vary from country to country?

Our strategy is based on the level of development and growth of each nation. For example, in a country such as Myanmar, there is an essential need for “volume expansion,” as the total number of hospital beds, staff and equipment must increase to cater for the growing population.

As economic growth is achieved, volume expansion is replaced by qualitative investment. In Middle Eastern countries for example, the focus is put on enhancing the organizational quality of hospitals, training capable medical staff and procuring advanced technologies. Depending on a nation’s level of development, a variety of schemes can be utilized. For countries in the early stages of development, we abide by the ODA format. As the economy further develops, we switch to a PPP or PFI model.

For any project, we provide engineering and software services. From the planning to the design stage, we propose hospital operation solutions, logistic systems and ICT services. While we do not develop ICT systems ourselves, we support clients in choosing the one which is a best-fit for the local market. In the construction phase, we prepare the necessary support for the hospital to begin operating. Just before the opening, we provide staff training to each of the hospital’s departments. During the construction phase, we analyse, check, propose and instruct together with the owner as to best-practices for his investment.

 

Can you tell us more about your most recent ODA projects?

In 2013, we finished rehabilitating the hospitals that were devastated during the Iraq war. Between 2009 and 2011, we contributed to the development of Vietnam’s National Hospital for Obstetrics and Genecology.

Since September 2016, we have been providing medical equipment procurement and installation services to the Republic of Cuba. As former US President Obama lifted the embargo on Cuba, the Japanese government decided to utilize medical aid as a mean to re-build the relationship between the two countries. Under the Japanese government project, we assist 34 hospitals in Cuba.

 

Can you tell us more about your most recent PPP projects?

We are currently operating under the PPP model in Turkey and South East Asian countries. In Turkey, we are currently working on two on-going hospital PPP projects with over 2,000 bed capacity and 3,000 bed capacity for each.

To conduct successful PPP projects, we bring our Japanese experience to the world. For the public sector clients, not only conducting feasibility studies or giving lectures, but also we draft tender documents to explain the project in depth with the criteria of requirement, risks and opportunities at hand.

 

What are the competitive advantages of ITEC?

From an international point of view, ITEC’s model is simply unique. Our services and expertise are unmatched. In Japan, it took us nearly 20 years for the market to recognize our reputation. In the overseas realm, it is impossible to utilize such a long-term approach. In order to rapidly enhance our activities, we founded an affiliated company, ARQUIMEDICA. We employ ARQUIMEDICA as a means to join design projects overseas. Today, the reputation of ITEC is limited to Japan. As a company which was born global, I would like ITEC to be known around the world.

 


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