Interview with Murat Arslanoğlu
Developer of the Konyaalti Hospital (now Uncali Meydan Hospital)
Director, Fempa Ltd.Şti.
1 July, 2010
Fempa Ltd. Sti:
Fempa, Ltd. was stated in 1992 in Central Antalya, Turkey. Antalya is a south coast city in Turkey, in a region known as the Turkish Riviera.
Fempa has been offering medical assistance and funeral repatriation services for 18 years. It has a 24/7 multilingual call center and works with insurance companies, international assistance companies, and international funeral companies around the world, and embassies and consulates in Turkey.
The Antalya region received 7 million foreign tourists came last year, mostly from Germany, Russia, United Kingdom and other European Countries.
Antalya Assistance is used as a trade mark of Fempa Ltd.
Murat Arslanoğlu, Director of Fempa:
Mr. Arslanoğlu is a chemical engineer (Istanbul Technical University) and joined Fempa in 1997. He was instrumental in expanding Fempa’s offerings to its present range of services, the trade mark name “Antalya Assistance,” and its IT expansion. .
Murat was lead director and responsible for the development of Konyaalti Hospital Project between 2006 and 2009. In this role Murat was in effect, the project manager, managing all details including site selection, architectural project, construction, permissions, financial flow and licensing from the Ministry of Health.
Murat Arslanoğlu was invited to European Federation of Funeral Services Board in 2003. He is the first Turkish Member of the federation and the board. He also was the first Turkish Member of European Norms –Repatriations Committee of the federation. He still keeps his position.
Editor note: Mr. Murat Arslanoğlu and Hank Kearney have known each other for the past decade, having met by way of the Global Health Access® medical tourism project started by PHM International in 1999.
Interviewer, Hank Kearney (HK): Good afternoon Murat. Good to talk with you again. As I mentioned, we are here to talk about the hospital build project in Turkey, your role in leading this project, and how it was successfully sold off.
Can you tell me the name and location of the hospital?
Murat Arslanoğlu (MA) The name we used in concept, development and initial operating was Konyaalti Hospital. Today, it is known as Uncali Meydan Hospital.
The hospital is located in the Uncali locale of the Konyaalti region of Antalya, in Turkey. Hence the name Uncali. Meydan name is the name of the current owners.
HK: And that is my next question, Murat. Who owns the hospital now?
MA: The Meydan Group from Turkey owns the hospital now. They purchased our company
“+90 Inc.” in 1.08.2009.
Fempa formed +90, Inc. to develop the hospital, and Meydan Group purchased the company.
HK: We’ll discuss the planning and building of the hospital in a moment. For background Murat, would you please describe the finished hospital?
MA: Certainly. In short, the hospital has:
- 29 beds, (20 private rooms, 2 rooms with 2 beds, and 5 intensive care beds.)
- 2 Operating theaters, 1 Delivery Room.
- 12 clinics – General Surgery, Internal Medicine, Cardiology, Neurology, Dentistry, Pediatrics, Anesthesia and Reanimation, Emergency Medicine, ENT, Orthopedics and Traumatology, Ophthalmology, Urology.
- Internal Intensive Care Unit, Surgery Intensive Care Unit, Neonatology (Newborn) Intensive Care Unit.
- Radiology and Laboratory, including CT, X-ray, ultrasound, mammography, EEG, etc.
- Kitchen, partial laundry, and a 23 space outside car park.
The space consists of 4,750 sq. meters of building and 1,750 sq.m of land. There is one floor underground of approximately 1,000 sq. meters and is used for OR, Delivery, and Intensive Care.
HK: Can you tell us why you selected these services below ground level?
MA: Yes, the reason is basically hygiene. The deciding factor was the costs and effort to maintain these “clean spaces” and an environment with no windows and limited access was determined to be advantageous.
Background note: The Turkish Ministry of Health (MOH) developed a new classification of hospitals after the Konyaalti Hospital was completed. Today, all hospitals in Turkey are rated from A to E. This hospital is classified as “C.” An “A” hospital is specialty hospital and “B” hospitals are classified on size and range of offerings, similar to “C” but larger.
HK: Can we talk about the costs to build and financing arrangements?
MA: Certainly. For this hospital, we used long term leasing, credit, and the equity of our parent company, Fempa Ltd.
In short the breakdown is:
Long Term Leasing: 2.000.000 USD (equipment & machinery, and IT.)
Bank Credits: 1.150.000 USD
Equity of Fempa Ltd.: 1.200.000 USD
HK: Murat, the medical leasing total seems a bit high in relation to construction and operating capital. Would you please explain?
MA: Actually, the leasing budget is low. Let me explain…the leasing budget isn’t just medical equipment, it also includes the IT systems and building systems such as electrical (generators) lifts, HVAC, and so on.
In fact, there was some medical equipment we did not bring into the hospital, due to our low budget.
The other 2+ million USD was for land, construction, licensing, operating capital.
HK: What are the staffing levels, for instance how many employees are there? Doctors, nurses, etc.?
MA: Total employees is 72. There are:
Doctors : 17
Nurses : 35
Technicians : 5
Other : 15
HK: Murat, in planning the hospital, what was the focus of staffing the hospital: For instance, did you already have contracts with doctors? How did you find nurses? Was this done prior to opening the hospital? And can you tell us about your recruitment efforts?
MA: Yes, we already had contracts with Chief Doctor and his assistant. Planning of the hospital, choosing of the doctors and nurses are very important duration. According to the regulations, a doctor is able to sign full time contract with one medical center. It is not possible to work with another at the same time. We have not come across any problem to find nurses. On the other hand I cannot say the same for doctors.
The Chief Doctor and assistant of him are in charge of the license process. After checking of the hospital by Ministry of Health, Chief Doctor then prepares his doctors list to give local office of Ministry of Health.
We did doctor transfers from one local hospital in Antalya.
HK: What information systems were put in place to help run the hospital? What was good, not so good….
Editor’s note: MEDULA is the Turkish IT system for social insurance reimbursement, eligibility, etc.
MA: There are different systems as you know help to run the hospitals. In the mean time, in Turkey, 6 years ago private hospitals started to accept patients with social insurances like SSK, Bagkur, Emekli Sandıgı etc. For that reason, we have chosen the compatible system with MEDULA. Medula means online connection to social insurance system of the government. When any patient comes to admissions desk in the hospital, it is possible to take online instantly confirmation from MEDULA via ID Number of the citizen.
This also allows us to charge for patient co-payments. Co-payments and reimbursement from the government are based on the hospital classification.
Private insurance companies do not use MADULA, and hospital can install separate IT systems with each private company. Often times, with private insurance the information is transferred via FAX.
MEDULA was one of the driving forces behind building the hospital. With MEDULA you have an instant customer base from the Turkish population. Cash is not necessary.
HK: Let’s take a step back in time. I’d like to hear the story behind the hospital and know this will be of keen interest to our readers. How did an assistance company and funeral service make the leap to developing a state of the art hospital?
MA: Obviously tourism was constantly increasing in these last years. It was necessary to make investment concerning our business. At the time we already had working relationships with international companies, and we are based in tourist area. Initially our aim was build a village for elderly foreign people. However, there were some regulation changes for hospitals. Also we had a plot of land which was suitable for a hospital. In addition, another reason to choose this investment was the development MEDULA.
I suppose our existing work relationships with international companies on behalf of their clients minimized the risks of the market and provided confidence for creditors.
HK: Murat, now we’ll talk about the market in Antalya, and Turkey at whole. How do you see the market change, grow, etc.?
MA: As everybody knows, Turkey is a bridge between Europe and Asia. In this year 2010 I would like to remind you that Istanbul is a Culture Capital of Europe. It is possible to see many attractions via Bosporus. According to Ministry of Culture and Tourism statistics, in 2007, 23 million, in 2008, 26 million and in 2009, 27 million foreigners visit our country. These statistics are affecting our market. Companies prepare plans for these conditions. We needed to evaluate our market from 2 various view. Health Tourism and Tourist Health.
Health Tourism concept is quite new in our country. Travel agencies and some hospitals in Antalya and Istanbul work to raise the market, however, it needs time to achieve success.
Tourist Health is related directly to tourism activities. It is growing fast. Due to the fact that other market regions have a direct link with Turkey is positively affected.
The next 10 years are very important. As you know Turkey has commenced negotiations with EU. If Turkey accomplishes this process tourism and health markets will grow rapidly.
HK: Does the hospital work closely with any EU, US or Middle Eastern academic or accrediting organizations?
MA: We were planning to apply for TUV Certificate; however the selling duration had started before we applied for certificate.
HK: What is or was the plan to install any particular clinical specialties?
MA: In the plan in fact there was a heliport on the top of the building. We got permissions from civil aviation, local government and military office. However, we could not succeed to get license from local municipality, due to intensive life zone. Today it is only available for use in emergency situations like earthquakes.
HK: So, does the hospital have an emergency-trauma departments? As you know, in nearly any health care market this service is likely a loss-leader at best, a significant drain more likely. How does the hospital manage the patient load that comes in to the emergency room?
MA: The Emergency Department is an obligation for constructing medical centers. General practitioners are kept on staff 24/7 and specialists doctors are invited (“on-call”) if it is essential.
However, MEDULA restricts payments in general for emergency. There is no extra payment for emergency care. And yes, it is a loss maker. But, and this was important, as this is in tourist area we are able bill private insurance for the emergency department care, such a car crashes.
HK: Here we will talk about how the hospital got a contract with government. Do you provide government sponsored services?
MA: As I mentioned before, if a patient has social insurance you can take advantages of any private hospital with your ID Number via MEDULA and paying small amount price difference, a co-pay.
HK: Does the hospital have any contracts with private insurance companies?
MA: In our country, there are many private insurance company, like Axa, AIG, Eureko, Maphfre etc. Before we sold the hospital, all private insurance agreements had been signed.
HK: How big is “private pay”?
MA: By private pay I think you mean that patients without any insurance have to pay directly to the hospital. It is not common among Turkish population. Generally everybody has social insurance. If not, clients pay invoices from Turkish Medical Association price lists. This price list is also used for foreign insurance companies by hospitals.
But, we are in a tourist area and many tourist do not have private insurance. In this instance, we can collect via wire or credit card, but these are limited amounts.
If funds are not available, sometimes the patient is not released, but this is not the case in Uncali.
And of course, unpaid balances are not taxed.
HK: Who is the typical patient at the hospital?
MA: The typical patient in hospitals is one you can easily understand. They come earlier and visit clinics one by one. Routine visitors are the typical patients.
The mix is approximately 85% Turkish and 15% expats and tourists.
Some regions are only for tourists and have no local patients. For example, the Belek Golf region has a large number of 5 star facilities or villages, and the hospitals are providing services only to tourists in these facilities. This is an example of tourist health.
HK: How long, from idea to completion did the hospital development take? We’ll talk about time frames and challenges here. For instance, was an outside consulting firm hired?
MA: From idea to completion took 5 years. It is long term. For example you need proper plot of land to build hospital. Type of the plot of land is important. We did change type of the plot of land from local councils. That took 1 year alone. During this process of course, we spoke with some consultants and companies. In this point I need to say Hank, I was emailing with you during this construction and I have to confess, your approach and your digital publications supported me very much. Thanks for this.
HK: That’s nice to hear. What many do not understand is the enormous amount of work, time, and effort that goes into planning and building a hospital, regardless of its size.
What was the reason for selling the hospital?
MA: Fempa decided to sell the hospital, due to the fact that operating expenses were going to increase and it was necessary to find at least a partner for the hospital. We chose to sell all shares to the buyers.
HK: What, plans, if any, are in place to do another hospital? Do you get asked by investors to build other hospitals?
MA: From now on, we do not think to invest again hospital in Antalya. This is because the big companies and hospital chains have, and continue to make serious investments in Antalya.
These big conglomerates of Turkey now control the market and companies like Fempa are no longer competitive in our local hospital market.
Also, about 2 years ago, the MOH put on hold new hospital applications and instituted a review system. (e.g. A type of “Certificate of Need.”)
On the other hand, as Antalya Assistance we plan to explore the Caucasus countries for any opportunities. I have been in Kazakhstan, Kirgizstan and Tajikistan last year and will go again.
After the sale of the hospital, I took a bit of vacation and combined with an explore trip. I believe these regions will be important over the next 15 years or so. Particularly Kazakhstan. I did make a couple of quick visits to hospitals and ….there is a need for professional expertise in these countries. Some clinics and medical centers were owned by oil companies.
There is much to learn.
HK: What political challenges were involved in planning and then building the hospital? Did you received any support from the EU? NATO? Etc?
MA: Regulations are constantly updating. It is often. But I can not say political challenges were involved in planning and building.
At opening ceremony, some EU Countries Representatives supported us by visiting our hospital.
HK: And has there been any interest from Asia?
MA: There are some Chinese businesses in northern Turkey, the mining region. Very little in our region though. In Antalya region we have business and interest mostly from Europe and Russia. Very little from Middle East now, years ago yes, from Syria and elsewhere, but now little from Middle East.
HK: Murat, again it is a pleasure to talk with you. Thank you for your time and insight in what is sure to be a very interesting future for hospitals in Turkey.
MA: Thank you.