Q. Mitra Keluarga made me interested in knowing more about its history and growth trajectories. How did Mitra Keluarga start?
Mitra Keluarga was established more than 30 years ago in 1989 with the opening of a modest, 35-bed maternity hospital in the eastern part of Jakarta, the country’s capital city. The Company was then formally incorporated in 1995 under the name of PT Calida Ekaprana, before changing its name to PT Mitra Keluarga Karyasehat, in 2014. Backed by its aspiration to become a people-centered and a leading edge healthcare provider in the nation, over the years Mitra Mitra Keluarga has grown to become the nation’s premier operator of community hospitals with healthy profitability. In March 2015, Mitra Keluarga went public, listing its shares on the Indonesian Stock Exchange (Ticker Code: MIKA).
Q. Where is the location where Mitra Keluarga operates and provides health services to the community?
Mitra Keluarga targeting mainly Indonesia’s most attractive markets in the greater Jakarta and Surabaya areas and selected other cities, Mitra Keluarga hospitals offer the delivery of “Life, Love and Laughter” services to patients.
Q. Does Mitra Keluarga serve patients from a wide spectrum of consumers?
In 2017, the Company announced the acquisition of PT Rumah Kasih Indonesia (Kasih Group), a hospital chain that focuses primarily on servicing patients under the Government’s Health Insurance Scheme, Jaminan Kesehatan Nasional (JKN). With this acquisition, the Company now serves Indonesia’s entire customer spectrum: from private insurance patients and corporate clients, to out-of-pocket expense individual patients to JKN member patients.
Q. What makes the Mitra Keluarga and Kasih different?
Mitra Keluarga's business model serves more than 30 specialization areas, with a total capacity of around 200 hospital beds and most of them are located in the bigger cities (Jakarta and Surabaya) due to the availability of the doctors, futhermore Mitra Keluarga's patient segmentation mostly private patient. Whereas Kasih serves less complex medical offering, no more than 15 specialization areas and most of them are located in the secondary or tertiary cities. Due to the less complex business model of Kasih, most of the patient segments come from the covered or insured (BPJS) patient.
Q. How many hospitals and hospital beds does Mitra Keluarga operate?
Mitra Keluarga's network expansion continued with the opening of new Mitra Keluarga every year. Currently, Mitra Keluarga’s network comprises of 18 Mitra Keluarga and 9 Hospitals under Kasih Group, serving inpatient and outpatient customers, and employing a total of more than 7,000 medical and non-medical employees.
Q. What is Mitra Keluarga's growth strategy in developing its health service provider business?
As one of Hospital's growth driver Mitra Keluarga commited to increase the Capacity by implement two strategies. First increasing the capacity by building or acquire hospital (greenfield and brownfield expansion), second increasing the capacity of the existing hospital. Every year Mitra Keluarga targeting to open 2-3 new hospital and add 3-5% operational bed from our existing hospital.
Q. What are the medical specialty areas operated by Mitra Keluarga?
Mitra Keluarga is a community-based general hospital serving more than 30 specialization areas of services, equipped with medical technology. As a community hospital, Mitra Keluarga serves patient from the surrounding area within 2-5km from its location. There are 4 top specialties needed by the community namely Pediatrician, Obstetrics, General Surgeon and Internal Medicine. Mitra Keluuarga also have other specialization areas that are different in each hospital based on the availability of the specialist doctor.
Q. What are the risks experienced by Mitra Keluarga in operating health services in Indonesia?
Mitra Keluarga faces the risk of losing doctors, nurses and other medical staff that may adversely impact the performance of Mitra Keluarga. Mitra Keluarga plans to continue with its recruitment process for health services professionals and provide attractive incentives and work benefits for such professionals to attract and retain them. Mitra Keluarga also provides opportunities for further education and training for its staff, through scholarship programs and other training programs. These opportunities are incentives for these professionals to stay and develop their career with the Mitra Keluarga. Mitra Keluarga always be prepared for risks arising from the possibility of legal issues stemming from medical malpractice conducted by its doctors and other medical staff. This risk can be mitigated by maintaining systems to monitor doctors’ activities and practices, making them transparent to the patient, as well as by providing malpractice insurance for full time and part time doctors who practice in Mitra Keluarga. The human resource issue is also tied to Mitra Keluarga’s expansion plans. Plans to build new hospitals and add beds and other facilities are dependent on the availability of human resources to handle the newly expanded operations. Indonesia has a limited pool of doctors and health staff. Regulations are also strict on hiring doctors from abroad as they must have a special permit from the Ministry of Health to practice in Indonesia.
Q. How much capital expenditure is needed to build a hospital with the Mitra Keluarga and Kasih business model?
The capital expenditure required to build Mitra Keluarga with a capacity of around 200 hospital beds is around Rp250,000,000,000 to Rp300,000,000,000 (US$22-US$25 million) including land acquisition costs, construction costs and costs for major medical equipment. Meanwhile, the capital expenditure used to build a hospital for Kasih's business model with a capacity of around 100-150 hospital beds is around Rp100,000,000,000 to Rp150,000,000,000 (US$7-US$8 million).
Q. How does Mitra Keluarga manage working capital management and does Mitra Keluarga have a dividend policy?
Currently Mitra Keluarga is in a net cash position with no bank loan. In accordance with the dividend policy stated in the Prospectus of PT Mitra Keluarga Karyasehat, since 2015 Mitra Keluarga intends to pay dividends at a rate of at least 25% of its consolidated net income, where in 2015 will refer to 2014 consolidated net income, after provisioning for all statutory reserves. The rate of dividends will be subject to the Company’s cash flow and investment plans as well as regulatory restrictions and other requirements.