Hospital Network in Bangkok to Upgrade, Then Expand

BANGKOK: -- Bangkok Hospital, the country's largest hospital chain operator, plans to expand its network of 13 hospitals through acquisitions and new hospital establishments.

"To achieve our network hospital vision and cope with the country' medical services liberalisation in 2005, we plan to expand our network to cover 20 hospitals over the next five years, particularly at strategic locations in a radius of 250-300 kilometres around Bangkok," said Dr Pongsak Viddayakorn, the company's president.

However, he said the expansion was not likely to begin in earnest in the next two years because within that time period, the company planned to focus on improving its 13 existing sites. Currently, the Bangkok Hospital network includes Samitivej Hospital, BNH Hospital, Bangkok Phuket Hospital, and Bangkok Pattaya Hospital.

The group posted a net profit of over 500 million baht last year on revenues of 7.8 billion baht.

This year, the company expects to generate up to 9.7 billion baht in revenues and post a net profit of 800 million baht. For next year, it projects revenue of 12 billion baht and a net profit of 900 million baht.

"We expect all our hospitals including Samitivej, which was once loss-ridden, to be profitable this year. This, along with the new capital increase, will give us a financial cashflow for our expansion plans apart from the new capital increase," Dr. Pongsak said.

Recently, Bangkok Hospital raised its registered capital to one billion baht from 750 million baht by issuing 25 million new ordinary shares at a par value of one baht each. The offering price was 60 baht per share, bringing in proceeds of 1.5 billion baht.

According to Dr. Pongsak, the new capital and proceeds would be sufficient to cover the group's new investment plans until 2008.

He said the country's health-care and medical services industry, particularly in the private sector, was expected to go through a lot of changes.

"Because of the government's 30-baht health-care scheme, the medical service system in the future will become a more clearly defined dual-track system, with one depending mainly on government subsidies, and the other funded by fee-based services which targets mainly rich patients and foreigners," he said.

"For the capitalised hospital group, in particular, there is already consolidation among the hospital groups and we expect that in the next five to 10 years, the number of hospital groups will dwindle down to 10 from 350 currently."

According to Dr. Pongsak, large private hospitals will be expected to remain competitive while the small players will be forced out of business.

"The year 2005 will be a turning point for the industry and a number of joint ventures with foreign investors will likely be formed during that period."

--Agencies, Bangkok Post 2004-04-06

Rajavej in CM is one of a group of three hospitals which can provide better care without a sore bottom at the end of it.