Asian Healthcare Titans 2013

Hospitals

Hospital players and deals you should know about in Asia

January 2013

Executive Summary
Hospitals in emerging Asia present an exciting opportunity for investors. Strong economic growth, rising incomes, and a large emerging middle class population drive demand for access to quality healthcare in countries such as India, China and Indonesia. The current healthcare provider infrastructure in many emerging Asian countries does not adequately meet demand. The limiting factor for investors looking to own and operate hospitals profitably in Asia lies with ability to recruit appropriate human capital (doctors and nurses), and navigate complicated regulatory hurdles, especially in countries like China. On the demand side, private hospitals ability to provide quality healthcare while being reasonably priced to capture the emerging middle class is key to success in China. This is especially true as players face increased supply and intense competition from both foreign entrants and the public system. Regulatory reforms, pursuit of public private partnerships are expected to ease foreign direct investment in this sector as governments like Indonesias recognise the important role of the private sector in improving healthcare in the country. More than 40% of the hospital deals Clearstate tracked in Asia this past year (2012) took place in India, aided by the low regulatory hurdles of the Indian government to investments in this sector. Compared to China, where regulation and politics burden private investments in hospitals, and India, which has become an obvious choice for investors, we take a closer look at a relatively surprising hotspot that has garnered less attention: Indonesia. A recent hospital law in Indonesia encourages foreign investment in the sector and a few large hospitals are looking for development capital to fund expansion plans in the country. In this report, you will find Clearstates proprietary list of profiled Indonesian hospitals and the overall hospital structure.

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Contents
Executive Summary ................................................................................................................................ 1 Introduction.............................................................................................................................................. 3 Demand drivers and trends in Asia ......................................................................................................... 4 GDP growth drives healthcare spending ............................................................................................ 4 Rising middle class increases demand for hospital services .............................................................. 5 Ageing population focuses demand on elder care .............................................................................. 6 Supply drivers and trends in Asia ........................................................................................................... 7 Strong demand inadequately met by current infrastructure ................................................................ 7 Government reforms, public private partnerships drive development of sector ................................. 8 Hospital deals in 2012 ............................................................................................................................. 9 Country profiles ..................................................................................................................................... 11 China ............................................................................................................................... 11 India ................................................................................................................................. 12 Indonesia ......................................................................................................................... 12 In focus: Indonesian hospital titans ....................................................................................................... 13 Hospital profiles ................................................................................................................................. 14 Siloam Hospitals Group ................................................................................................................. 14 PT Affinity Health Indonesia (also Ramsay Health Care Indonesia) ............................................. 15 Santosa Bandung Hospital ............................................................................................................ 15 Eka Hospital ................................................................................................................................... 16 RS Mitra Keluarga Group .............................................................................................................. 16 Hermina Hospital Group ................................................................................................................ 16 Wooridul International Spine Hospital Jakarta ............................................................................... 17 RS Bethesda Yogyakarta .............................................................................................................. 17 RS Fatmawati ................................................................................................................................ 17 RS Kariadi ...................................................................................................................................... 18 Clearstate commercial due diligence service ........................................................................................ 19 About Clearstate ................................................................................................................................... 20 References ............................................................................................................................................ 21

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Introduction
Hospitals in emerging Asia present investors with a very exciting opportunity. It is a sector that is at an early stage of development, with massive market potential, driven by macroeconomic and demographic factors like high growth and a rising middle class, as well as support from supply side factors like government regulation, policy and infrastructure investment. The opportunity in hospitals has not gone unnoticed by the private equity and investment community. There have been more hospital transactions in the past 2 years than in the last decade. In Asia, there have been more than ten hospital deals in the past year alone, with a disproportionate number completed in India, driven by relatively low regulatory hurdles and increased demand for private healthcare by the middle class. Five years after purchasing a 10 percent stake in Apollo Hospitals Enterprise Ltd, Apax Partners LLP is already looking to sell, for a large profit. In 2012, a few private equity firms have been shortlisted for the auction of one fifth of Indonesias largest private hospital chain, Siloam. Current owners Lippo Karawaci, are seeking a valuation twenty times that of Siloams core earnings, in order to fund ambitious expansion plans to increase accessibility of quality care to the masses. While potentially being able to generate high returns for investors, there are also challenges to investing in and operating hospitals in the highly fragmented and opaque healthcare markets of Asia. In this white paper, we will explore the business case for hospitals in Asia, as well as identify some of the challenges in the countries of highest potential for investors China, India and Indonesia. With more than 80,000 hospitals in Asia, we will also highlight certain key Asian hospital players and deals you should know about, based on criteria ranging from market size, share, standards of patient care and other efficiency metrics. Clearstate, an Economist Intelligence Unit healthcare business, is the market leader in healthcare research-based consulting in the emerging markets. The analysis and content in this report is derived from our extensive experience and track record in healthcare research based consulting in 14 countries across Asia.

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Demand drivers and trends in Asia

GDP growth drives healthcare spending
With real GDP growth rates almost double the global average (5.70% compared to 2.30% ), Asia will be a prime driver of global economic growth going forward. At real GDP growth in the range of 58% in Asia annually, and with healthcare projected to remain at a constant or growing percentage of GDP, we expect to see a rise in healthcare spending in absolute terms across the countries in the region. China, India and Indonesia lead with the highest expected real GDP growth and largest populations. Philippines may be one to watch as relatively high macroeconomic growth is expected, while healthcare spending as percentage of GDP is projected to hold steady, at a relatively decent 4.6% going forward.
1

Figure 1: (Top) Real GDP growth; (Bottom) Healthcare spending as percentage of GDP. (Source: EIU)

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Rising middle class increases demand for hospital services

By 2030 Asia will represent 66% of the global middle-class population and 59% of middle-class consumption, compared to 28% and 23% respectively in 2009. - OECD

Figure 2: Number (millions) of global middle class for 2009, 2020F, 2030F. (Source: OECD)

Figure 3: GDP per capita (PPP) in Asia and the world. (Source: EIU)

With rising income levels comes increased purchasing power and choice. A rising middle class not only increases the affordability of healthcare, it also drives consumer preferences for quality and standards of healthcare services. For instance, a trend in global healthcare recently is the gradual shift in focus from sick care to wellness, with people being more aware of preventive medical technologies and treatments, and more willing and able to pay for quality healthcare. These factors have led to an overall increase in the number of patients going to specialty clinics for personalized treatments. We expect this trend to drive growth in number of specialty clinics being built in urban Asian cities.

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The increasing wealth, coupled with sedentary or stressful lifestyles, have led to higher prevalence of chronic diseases. Worldwide, deaths caused by chronic diseases including cancer, diabetes and hypertension have skyrocketed in the past decade and will likely continue to do so. The demand for hospitals that deliver care to such conditions will therefore be on the rise. A gauge of hospital activity is the number of surgical procedures done in hospitals. According to Clearstate estimates, the number 2 of surgical procedure volumes in Asia has been growing steadily at a compound annual growth rate (CAGR) of more than 5%, particularly in China and India. The largest volumes are in the areas of obstetrics and gynaecology, with more than 60 million procedures done in 2012. The CAGR for surgical procedure volumes for the next two years is projected to increase to 5.57%, indicating a likely increase in demand for hospitalization and corresponding services.

Figure 4: Surgical procedure volumes in Asia. (Source: Clearstate Surgical Procedure Volumes tracker)

Ageing population focuses demand on elder care

According to the United Nations, the proportion of people over the age of 60 in Asia is projected to increase from 11% in 2012 to 24% in 2050. For Indonesia, the increase is expected to be almost fourfold, from todays 20 million to over 74 million in 2050. The ageing population not only increases the overall demand for healthcare services, it will also impact the provider segments that may be of interest to investors, such as elder care.

Figure 5: Percentage of population aged 60 and above. Data from United Nations (2012)

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The Singapore government has announced that it will spend more than S$ 500 million (US$ 409 million) over the next 5 years to build more such facilities to support the needs of an increasing ageing population. In China, there are already active investments in elder care and retirement facilities made by funds such as the Fortress Investment Group. An ageing population will also impact the areas of need, such as in diabetes, macular degeneration, or bone related problems (arthritis and osteoporosis). For example, in India, the number of osteoporosis cases is expected to be 36 million in 2013. In China, more than 70 million are affected 3 by osteoporosis. In the past year alone more than 90,000 hip replacement surgeries have been carried out.

Supply drivers and trends in Asia

Strong demand inadequately met by current infrastructure
At 2.08 beds and 1.09 doctors per 1,000 population, Asia and Australasia lags behind the global average (2.72 and 1.72 respectively, 4 refer to Figure 6 below). As Asia continues in its growth trajectory, demand will continue to outstrip supply. The market opportunity will be restricted not by market need but by the ability of players to seize it; by entering the market with quality care at an affordable price point. Affordability depends in part on the reimbursement situation and insurance schemes of each country, but also on the patient segments players are targeting. Harvesting the demand from the new middle class, would require a different pricing and offer strategy than trying to recapture outbound medical tourism from the high income groups. Understanding the price sensitivities and financing options of each segment is key. The other limitation in emerging markets is the ability to recruit medical staff. The low doctor to population ratio is a problem localised to the region and often compounded by strict policies regarding foreign talent. Indonesia has strict regulations regarding foreign medical doctors, stating that they need to undergo evaluation 5 and be able to speak Indonesian, and do not have the option of opening their own clinics. This may pose a challenge to foreign money looking to operate hospitals profitably in the region. The number of hospital beds per population has the potential to be increased significantly. The world average is 2.7 beds per 1,000 population compared to Indonesias 0.6. By this metric, a country like Indonesia will need to increase provision by at least 500,000 beds to be on par with the world average, the 6 equivalent of about 2,500 large hospitals. With regards to provider landscape, Indonesia is a distance away from market saturation.

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Figure 6: Number of doctors and hospital beds per 1,000 population. (Source: EIU)

Government reforms, public private partnerships drive development of sector

Healthcare and hospitals tend to be a heavily regulated sector. A stamp of approval in the form of favourable government policy can often lower the barriers to entry and make foreign direct investment into this sector a much more attractive prospect. Highlighting the countries of interest: A recent reform in China in 2011 now allows 100% non-Chinese ownership of hospitals and 7 other health services. In 2010, Indonesia changed its regulation to allow investments not only in Medan and Surabaya but all over the country, and raised the ceiling on foreign investment in hospitals 8 from 65% to 67%. India has a liberal foreign investment policy for hospitals. Since January 2000, FDI is permitted for up to 100% ownership for the hospitals sector in India. Approval from the foreign Investment Promotion Board (FIPB) is required only for foreign investors with prior technical 9 collaboration, but allowed up to 100%.

In addition to investment laws, several Asian governments have also pursued public-private partnerships in developing the healthcare sector, in the hope of providing greater access of improved services at lower costs. Public private partnerships (PPPs) are increasingly prevalent due to the interdependence of both sectors, and takes advantage of each sides strengths. Transparency, accountability and shared responsibility are crucial in order for such partnerships to have mutual benefit. Recent drivers of such partnerships include the need to rapidly improve the supply and quality of healthcare infrastructure and personnel, such partnerships thus involve areas from social franchising or marketing to building and operations. Private businesses bring to the table the development capital and managerial skills, as well as subject matter expertise. A few examples of PPPs in Asia include: Ahmad Zaki Resources Bhd is injecting RM 400 million (US$ 130 million) into a project collaborating with the Malaysian government and International Islamic University Malaysia

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(IIUM) to build a IIUM Teaching Hospital, a large teaching hospital with 300 beds and capacity 10 for 735 students. PPP between Indonesias National Family Planning Coordination Board (BKKBN) and the private doctors and midwives, with BKKBN paying for start-up costs. The partnership allowed the government to provide greater access to contraceptives and family planning services. Singapores hospital financing, known as the 3M (Medisave, Medicare, Medishield), is a unique PPP a government-people partnership. It gives patients subsidies to both public and private services. Health Management and Research Institute of India and a not-for-profit professional organization contracted by the Andhra Pradesh government collaborated to provide emergency ambulance service.

Hospital deals in 2012

In this section, we highlight some completed hospital deals in Asia worth more than US$15 million: Month Buyer Target Target Country Sri Lanka Singapore
11

Deal amount (US$) 32 million

12

October August

Actis (Market firm) Jelco Properties Pte Ltd

Asiri Group Novena Point Pte Ltd and Transurban Properties Pte Ltd (medical suites) Nova Medical Centers Pvt Ltd (specialty surgery and invitro fertilization clinics) SMC Healthcare Sdn Bhd

244 million

August

Goldman Sachs

India (Bangalore)

40 million

August

Kumpulan Perubatan (Johor) Sdn Bhd Jinling Pharmaceutical Co Ltd

Malaysia

18.5 million

July

Nanjing Gulou Hospital Group Yizheng Hospital Co Ltd Changan Hospital

China

19.2 million

June

Concord Medical Services Holdings Ltd Sequoia Capital Advent International

China

49 million

May April

Moolchand Healthcare CARE Hospital (chain of cardiology hospitals) Vasan Healthcare Enterprise (eye care chain)

India India

18.6 million 105 million

March

Government of Singapore Investment Corporation (GIC) IDFC Ltd

India

100 million

March

Sahyadri Hospitals Ltd

India

38.0 million

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Month

Buyer

Target

Target Country Thailand

Deal amount (US$) 71.9 million

13

March

Bangkok Dusit Medical Services EQT Partners and founder of China Healthcare Metro Pacific Investment Corporation (MPIC)

Bumrungrad Hospital PCL

March

China Healthcare (medicare centers and nursing homes)

Singaporebased

64 million

February

Asian Hospital Inc & Bumrungrad International Philippines Inc Integrated Healthcare Hastaneler Turkey Sdn Bhd Kerala Institute of Medical Sciences (multi-specialty hospital) DM Healthcare Pvt Ltd Max Healthcare Institute Ltd

Philippines

35.5 million & 30.0 million

February

Symphony International Holdings Ltd OrbiMed Advisors LLC & Ascent Capital Management Inc Olympus Capital Holdings Life Healthcare Group Holdings Ltd Fortis Healthcare Ltd

Malaysia

16.4 million

January

India

33.8 million

January January

India India

100 million 105.5 million

January

Radlink Asia Pte Ltd & Hoan My Medical Corporation

Singapore & Vietnam

50.3 million & 64 million

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Country profiles
China
We have explored the many trends driving the growth in Chinas healthcare market in the above sections. With the recent policy change allowing 100% non-Chinese ownership of hospitals and other health services, foreign and private ventures in Chinas healthcare sector is projected to increase over time. In fact, the government is actively encouraging privatisation of public hospitals, with the goal to have 20% of hospital beds privately funded by 2015. However, tapping into the growth story that is China is not without its challenges. First, complicated bureaucratic processes continue to dominate, with a time-consuming approval route. Despite the regulation taking effect last year, there are still a lot of grey areas in terms of what is or is not allowed. To open and build a hospital, you probably need at least 180 stamps of approval from different government agencies says Roberta Lipson, co-founder of Chindex International. The now defunct Beijing International Heart Hospital is a cautionary tale against the tendency for foreign investors to underestimate the complexities involved with navigating the Chinese system. Secondly, investors face a shortage of doctors for private institutions in China due to regulations and the fact that private institutions prefer to have bilingual doctors. This problem is exacerbated by fact that local doctors prefer to work at class 3 public hospitals to enhance their professional 14 experience. There also exists an uneven playing field for private hospitals in terms of eligibility for social medical insurance. Chinas health care reform in 2009 has already enabled coverage of 96% of its citizens. However, while private hospitals and joint ventures are now allowed to participate in social insurance schemes, the reality is that reimbursements tend to be extremely low and will mostly need to be covered either through out of pocket payments or private health insurance. In rural areas, major diseases are only partially covered, while coverage in the cities is better. According to the WHO, 78.86% of private healthcare expenditure in China was attributed to out-of-pocket expenditure in 2010. Cost structure and pricing could present another area for which private hospitals may find challenging when competing with non-profit public hospitals. Traditionally, foreign hospitals such as Parkway Health Group and United Family Hospital have focussed on high-end markets. However with increased competition and the desire to capture the emerging middle class, many private hospitals are coming up with more affordable pricing. The private market in China is getting very competitive, with entrants from Taiwan, Singapore among others. It is particularly saturated in the Tier 1 cities. Many private hospital chains are now expanding into Tier 2 cities for example, United Family Healthcare has already expanded into Tianjin and Wuhan. It is also expanding into other areas such as oncology and rehabilitation care. Other private hospitals tend to focus on certain specialities, with obstetrics/gynaecology being most popular. - Chee Hew, Principal, Clearstate

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India
A disproportionate number of hospital deals in Asia last year took place in India. In addition to the rapidly growing population (India is expected to surpass China in population size by 2030) and high economic growth, India has the added advantage of being relatively open to foreign direct investment in the sector. Policy initiatives undertaken by the government include automatic approval of FDIs and allocating priority status to proposals of greater social value, which include hospitals, life-saving drugs and equipment. These have led to favourable conditions and high deal volumes. Many foreign players have entered the Indian healthcare market to tap on the large market. Some of these foreign players are Pacific Healthcare of Singapore, which is a JV with Vital Healthcare in Hyderabad; Columbia Asia Group, a Seattle-based hospital services company; Wockhardt Hospitals; Steris, a US-based medical equipment company that has set up a wholly-owned arm in India etc. Domestic hospitals have a longstanding reputation in the healthcare sector including prominent private Indian hospital chains such as the likes of Max Healthcare, Fortis, Moolchand Hospital etc. While attractive, India is a relatively crowded market with many investors hoping to capitalise on the certainty of demand that India, by virtue of its growth trajectory, is sure to have in the coming years. Of the 20 or so reputable domestic hospital and groups, at least 10 have been acquired recently (some are listed in the Hospital Deals section above). A potential opportunity lies with Shalby Hospitals, who are currently looking to sell 10% 15% stake to private equity firms in order to fund 15 their expansion.

Indonesia
In Indonesia, years of underinvestment in public healthcare due to decentralisation policies, tight budgets and corruption have led to a dearth of good quality healthcare and infrastructure. At 0.3 doctors and 0.6 beds per 1,000, it compares poorly with neighbouring ASEAN countries such as Malaysia (0.8 and 1.8) and Singapore (1.6 and 2.5) as can be seen in Figure 6 above. Quality standards are lacking with only 5 of 1800 hospitals in Indonesia meeting international standards of accreditation for quality of care, all privately owned. There are certainly challenges with the Indonesian healthcare system, yet with challenge comes th 16 opportunity. With the 4 largest population in the world and more than 55% below the age of 25, the potential growth for healthcare medical spending is undoubtedly high. The government is also actively pursuing public private partnership mechanisms and schemes to support health sector development and to compensate for shortcomings of the public system. The recent law increasing the foreign ownership of hospitals in Indonesia from 65% to 67%, from Tier 1 cities to across the country, indicates the governments recognition of the role of the private sector in improving healthcare in Indonesia. Recent interest by Blackstone, KKR, Bain Capital and Abraaj Capital for a potential $300M hospital deal has shifted the spotlight considerably on hospital assets in Indonesia. While attractive, Siloam is by no means the only hospital chain in Indonesia. In our in-focus section below, we provide a picture of the Indonesian hospital landscape and profile a few key assets as thought starters for investors.
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In focus: Indonesian hospital titans

Indonesia is an archipelago comprising approximately 17,508 islands. It has 33 provinces with a population of over 238 million people, and is the world's fourth most populous country. The Indonesian economy is the world's sixteenth largest by nominal GDP and fifteenth largest by purchasing power parity.

Figure 7. Source: CIA World Factbook, Indonesia Ministry of Health (MOH), World Bank

In Indonesia, public hospitals are classified type A to D according to number of beds and level of care provided. 65% of hospitals in Indonesia are locally accredited by the Indonesian Ministry of Health (MOH), but only 5 meet the standards of care to be internationally accredited by Joint Commission International (JCI).

Number of Hospitals Very Large (>500 beds) INDONESIA Java Kalimantan Other Islands Sulawesi Sumatra 35 21 0 4 3 7 Large (201-500 beds) 202 126 11 10 21 34 Medium (101-200 beds) 373 220 27 19 27 80 Small (1-100 beds) 710 290 55 89 68 208 Total

1320 657 93 122 119 329

Table 1: Distribution of hospitals in Indonesia. (Source: Clearstate internal data)

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Hospital profiles
We have combined a detailed understanding of clients investment criteria, as well as in house expertise on key performance indicators like size and reputation to create a top line filter of 10 hospitals you should know about in Indonesia. Methodology

Siloam Hospitals Group

Since opening its first hospital in 1996, Siloam Hospitals Group has thrived and expanded rapidly preempting the demand for local quality care from emerging middle classes, in under developed regions across the country. Today, Siloam Hospitals group operates nine hospitals around the country and has plans for more than 10 new ones to 2014. The Siloam hospital in Karawaci, Banten is one of only 5 hospitals in all of Indonesia to have received international accreditation by JCI for their quality of care. Currently, the group is building a 14-story hospital in Ambon to increase access to healthcare in the area. The Siloam Hospitals group, which represents around 30% of Lippo Karawaci's asset value, are looking to fund further expansion through a sale of up to 49% stake in Siloam should it meet their target valuation of over US$ 1 biillion.

Ownership Geographic Locations

PT Lippo Karawaci Tangerang, Jakarta, Java, Jambi, Kalimantan, Manado More than 1,500 beds 15.0% revenue growth 17 (2010-11)

Size Growth rate

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PT Affinity Health Indonesia (also Ramsay Health Care Indonesia)

Ownership Ramsay Healthcare opened its first hospital in Indonesia in 1989, adding two more in 1998. The hospitals have been continuously upgraded, with the introduction of specialty units such as the Ramsay Spine Center and Diabetes Center. The hospitals have strict patient safety and infection control programs, ensuring the quality of health services. Two of the three hospitals (Premier Jatinegara and Premier Bintaro) received JCI accreditation in 2011, and the last was 18 attempting JCI accreditation in late 2012. Ramsay Health Care (Headquartered in Australia) Jakarta, Tangerang, Surabaya

Geographic Locations Size Growth rate

648 beds in total Revenue growth of Australia & 19 Indonesia for 2011-12 is 7.6%

Santosa Bandung Hospital

Santosa Hospital opened in 2006 and is now one of the largest private hospitals in Indonesia, and obtained JCI accreditation in 2010. It has many specialty units including neuroscience, cardiology and skin health and beauty. It prides itself with stateof-the-art medical facilities, and collaborates with hospitals and institutions in the region. The hospital is known for its friendly and professional healthcare staff, and its central location allows ease of access to patients. It has established partnerships with several overseas institutions for teaching and research collaborations and mutual exchange of knowledge.

Ownership Geographic Location Size

Sanbe Farma Bandung

400 beds, more than 200 specialists

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Eka Hospital
Eka Hospital started operations in 2008 in two locations, Bumi Serpong Damai (BSD) and Pekanbaru. It was accredited soon after by the local government, and the BSD hospital achieved JCI accreditation in 2010, showing it is true to its vision of becoming a leading healthcare provider. It has state-of-the-art equipment, and is one of the few hospitals in Indonesia with an integrated electronic hospital information system (Vesalius). The hospital has centers of excellence in the areas of neurology, cardiovascular and women and children.

Ownership Geographic Locations Size

Private Banten, Sumatra

Almost 400 beds

RS Mitra Keluarga Group

Ownership Established in 1993, Mitra Keluarga Group now has ten hospitals in Indonesia. It has received accreditation by Indonesian MOH and ISO 9001:2000. The hospitals provide comprehensive medical services and facilities including CT scan, angiography, endoscopy and acupuncture. Geographic Locations Private Bekasi (Jakarta, 341 beds), Surabaya (East Java), Bekasi Timur (Central Java), Tegal (Central Java, 197 beds), Cikarang (West Java), Mitra Kemayoran (Jakarta, 450 beds), Kelapa Gading (Jakarta), Depok (West Java, 220 beds), Waru (Sidoarjo, West Java), Cibubur (Jakarta, 50 beds) More than 1,200 beds

Size

Hermina Hospital Group

Hermina Hospital Group is a maternity and baby hospital chain, with mostly small hospitals and one large hospital in Jatinegara (Jakarta). Founded in 1967, the group has been expanding rapidly in the past decade, with at least one new hospital each year; most recently in Palembang and Banten. Recently, Dr Hasmoro, CEO of the Hermina Group, received the Indonesian Hospital Association (Persi) Parama Karya Husada award for his contribution to the healthcare sector. Ownership Geographic Locations Private 16 branches in 11 cities: Jakarta, Depok, Bogor, Tangerang, Bekasi, Bandung, Semarang, Malang, Sukabumi, Palembang, Banten More than 800
20

Size

beds

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Wooridul International Spine Hospital Jakarta

Ownership

Wooridul Spine Hospital (based in Seoul) Jakarta

Wooridul International Spine Hospital was founded in Seoul, which is JCI accredited. Its Jakarta branch was opened only in 2010 and has not yet been accredited, but the expansion of the chain both locally in Korea and overseas (including Shanghai and Dubai) indicates its promising growth prospects. In addition, the Seoul branch has treated more than 1,000 foreign patients the Jakarta branch might therefore draw patients from neighbouring countries in southeast Asia. It specializes in neuro-musculoskeletal diseases, and assures quality and reliability of results. It performs minimally invasive surgeries, or nonsurgical treatments, in order to give the patients the most comfortable experiences.

Geographic Location Size

550 beds

RS Bethesda Yogyakarta
Ownership Geographic Location Size Private Yogyakarta

Founded in 1899, this is the oldest hospital in the city. It is certified ISO 9001:2008 and accredited fully by the Indonesian MOH. It constantly upgrades its facilities, most recently obtaining bone densitometry equipment. Bethesda also has a stroke center with nerve specialists and a rehabilitation team. The hospital also has a non-profit unit called CD Bethesda which provides health services to the community, especially in rural areas; this is governed by health foundation YAKKUM.

460 beds

RS Fatmawati
Ownership Established in 1954, RS Fatmawati was initially planned to be a sanatorium for children. Now, it is run by the government as a general hospital including units for obstetrics and gynaecology, orthopaedics and paediatrics. It is a teaching hospital and is accredited fully by the Indonesian MOH, and also ISO 9001:2008 and OHSAS 18001:2007. According to the Jakarta Globe, this hospital is likely to receive JCI 21 accreditation soon. Geographic Location Size Public South Jakarta

552 beds

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RS Kariadi
Ownership Geographic Location Size Public Central Java

925 beds

The largest hospital in Central Java, RS Kariadi is a class A hospital for education, and functions as a referral hospital. It is a Technical Implementation Unit of the Department of Health. It has 150 specialists and over 900 paramedic nurses. In November, it was awarded champion in the serial hospital category by the Ministry of Health.

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Clearstate commercial due diligence service

Successful market strategies leave nothing to chance, that is why leading healthcare corporations and organisations globally commission research with Clearstate, an Economist Intelligence Unit healthcare business. Clearstate is proud to count more than 50% of the worlds largest healthcare multinational companies as clients, a direct testament to the consistency and rigor of our methodologies and results. Why Clearstate? We understand the industry, and focus entirely on the healthcare and life sciences sector. We are able to tap into our data-rich resources for market size and share data and growth forecasts, and have a wide network of hospitals, healthcare and life science panels. In addition to our market analyses, we will be able to provide a true, unbiased depiction of clinical standards, price points, market reputation, accurate customer insights and patient experiences. Commercial Due Diligence From target shortlisting and profiling to evaluating the one acquisition, Clearstate is able to tailor a solution combining in-market insights and depth of industry expertise to enable you to invest with confidence.

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About Clearstate
Clearstate (www.clearstate.com), a business of the Economist Intelligence Unit, is a highly specialized healthcare research consulting firm that offers in-market insights and business intelligence complimented by strategic advisory to help clients to implement pragmatic and innovative growth strategies to tap into opportunities in the emerging economies. Clearstates expertise extends across key healthcare and life sciences domain namely pharmaceuticals, medical devices, hospital services and applied sciences. Apart from commercial due diligence, Clearstate also offers: Gateway Market Trackers The only quarterly updated market size and share by segmentation tracker for Healthcare markets in Asia. The Gateway market trackers provide comprehensive coverage of imaging, in-vitro diagnostics and surgical device markets in value and volume, by country. Strategic Advisory Services Whether it is a market entry country scan, competitor benchmarking, channel optimization or customer insight problem, we can tailor a solution that is driven by primary research and credibly synthesized through healthcare centric analysis frameworks.

Contact:

Ivy Teh, Managing Director ivy.teh@clearstate.com Tel: +65 6303 5035

Wilson Tan, Director wilson.tan@clearstate.com Tel: +65 6303 5036

Michelle Chan, Associate Consultant michelle.chan@clearstate.com Tel: +65 6303 5048

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References
1 2

Economist Intelligence Unit (EIU) (2012); Data for Asia excludes Japan. Clearstate SPV Gateway Database (2011); Data excludes Philippines, Singapore and Hong Kong. 3 Clearstate SPV Gateway Database 2012 4 EIU (2012) 5 Indonesian Medical Council regulation, accessed at http://www.inamc.or.id/download/UU%20NO%2029.rtf 6 Note: According to Clearstate classification, 200 beds is considered a large hospital 7 Catalogue for Guidance of Foreign Investment (issued by the National Development & Reform Commission 2011), accessed at http://www.ndrc.gov.cn/zcfb/zcfbl/2011ling/W020111229379511927834.pdf 8 Indonesian government regulation, accessed at http://www3.bkpm.go.id/file_uploaded/PPres-36-2010.pdf 9 Indian government regulation, accessed at http://deity.gov.in/content/foreign-investment-policy & http://www.investinginindia.in/sectoral.htm 10 News article, accessed at http://hospital.com.my/news/2011/AZRB_to_build_teaching_hospital_in_Kuantan.htm 11 More than 10% stake, deal worth more than US$ 15 million, target country Asia. Unless otherwise indicated, source: Bloomberg & EIU Zephyr databases 12 Private Equity Asia, 2 Oct 2012 13 Bloomberg News, 5 Mar 2012 14 Shanghai Daily article, accessed at http://www.china.org.cn/opinion/2011-04/07/content_22304681.htm 15 Business Standard news, 25 Oct 2012, accessed at http://www.business-standard.com/india/news/hospitalchain-shalby-mulls-taking-pe-route/490615/ 16 U.S. Census Bureau, Indonesian population statistics, accessed at http://www.census.gov/population/international/files/ppt/Indonesia92.pdf 17 Siloam Hospitals 2012 Frost & Sullivan Hospital Service 18 Ramsay Healthcare The Ramsay Way, Autumn 2012 19 Ramsay Healthcare International Annual Reports 2012 & 2011 20 Number is estimated: number of hospital beds found for only 7 branches giving total of 644; assuming at least 20 beds in each additional branch gives total of ~824 beds 21 Jakarta Globe news, accessed at http://www.thejakartaglobe.com/news/seven-indonesian-hospitals-to-benamed-world-class/502814

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