As a healthcare provider operating in some of the world’s conflict hotspots as well as in the developed world, Aspen Medical’s services might appear straightforward — but its unique approach sets the company apart from many other health providers. The business values outcomes rather than individual services and that’s something clients often struggle to understand, says co-founder Glenn Keys AO MAICD.
Keys recalls a contract for a regional dental authority, which had a three-year waiting list. The client kept asking how much the dentists cost, rather than the overall service. “The guy really struggled to understand he was buying the removal of a waiting list, not a dentist,” says Keys. “It’s saying that the usual ways you’ve done business in the past will need to change because you need to do something radical and different, and that’s what we can bring. Sometimes, that means the customer has to reset their brain.”
This approach has served him well. In the 15 years since Keys and childhood friend Dr Andrew Walker founded Aspen Medical, it has grown into a business with a team of more than 2200 people and revenue of over $200 million. Along the way, Keys and Walker have learned several key lessons about how to drive growth and performance.
Aspen Medical provides a bespoke solution to its customer’s healthcare needs — be it buildings, equipment, people, pharmaceuticals, consumables, ambulances or aircraft. Its projects have ranged from helping to clear dental waiting lists in the UK and providing medical care at remote African mine sites to establishing and running trauma and maternity hospitals in Iraq.
The business began when an English doctor, a friend of Keys and Walker, told them the UK National Health Service (NHS) wanted to bring in outsiders to provide innovative ways of delivering service. They tendered for the business, with Walker providing the medical expertise and Keys the understanding of how to develop and implement solutions. In 12 months, they cleared 5000 hip and knee replacements, 7000 minor orthopaedic procedures and 5000 outpatient appointments in the north of England. Aspen has employed that same strategy — outsiders with a fresh approach — in all its subsequent contracts.
One lesson the pair learned from that first contract was to align its cost base with its billing base — instead of paying clinicians and staff in the expectation there would be demand for the services it was being paid for. Initially, the company was paying doctors on a weekly basis — but its own revenue was tied to the amount of surgery carried out and Aspen had no control over the number of patients referred to its services. At the start of the NHS contract, surgery volume was only 20 to 30 per cent of the expected amount and Aspen’s revenue was taking a commensurate hit.
However, a clause in the contract stated that if Aspen completed a particular percentage of the forecast surgery, it would be paid for the entire contract — the clause not kicking in until the contract had run for 12 months. It was a close-run thing until the NHS upped the number of referrals and the contract finished at 120 per cent of expected volume.
Another lesson was to let clinicians do what they do well, giving them the right support, but leaving the actual running of the project to specialist managers.
The company was global from the outset, but Keys says this was just going where the work was. Along with healthcare for Indigenous communities and mining projects in Australia, the company has provided a 100-bed Ebola Treatment Unit in Sierra Leone, opened clinics in the Solomon Islands and Papua New Guinea, and taken on numerous projects in the Middle East.
Keys says he and Walker have learned they need a very clear understanding of risk, how to mitigate it and when mitigation is impossible. “What doesn’t appear in a lot of the brochures are the contracts we walked away from,” he says. One such contract was in a war zone. When doing the security assessment, they discovered the head contractor (their employer) had lost 53 local drivers in the previous year because of inadequate security measures. “We spent over two years and several hundred thousand dollars bidding on that project. When they finally let us inside the tent, we said, ‘That’s not a risk we could mitigate and we’re not prepared to take it’.”
“Others are too cavalier, assuming because they walked through a minefield once and it didn’t explode, they will be OK to do it again.” – Glenn Keys AO MAICD
Keys says many businesses are bad at risk management; some walking away from what could be good opportunities because they haven’t spent time working out how they can mitigate a risk. Others are too cavalier, assuming because they walked through a minefield once and it didn’t explode, they will be OK to do it again.
Aspen’s performance culture ranges from how it bids for work, to risk management, to customising client responses — bringing the customer on the journey and ensuring the company’s values are adhered to. In bidding for work, what’s important is their ability to be flexible rather than apply a cookie-cutter approach. “It’s knowing every customer is different and you need to adapt to that,” says Keys.
Then there is project delivery, meeting contractual requirements and keeping the customer. Another lesson learned is that not all clients are experienced or mature in engaging healthcare delivery services, and need to be educated along the way.
With employees in diverse locations around the world, maintaining performance might be considered an additional challenge. The founders make regular site visits, but driving employee performance is also about reporting, because measuring the right things can drive behaviour, Keys says. These metrics include contractual compliance, clinical incidents, which the business takes seriously, staff satisfaction and turnover, and financial performance.
Aspen Medical is also a B Corp — a for-profit company certified by the non-profit B Lab to meet rigorous standards of social and environmental performance, accountability and transparency. It’s unusual in that it is a for-profit company that bids competitively against not-for-profits (NFPs). Keys says NFPs also try to make a profit, but turn it to different areas, while Aspen Medical’s profits allow it to undertake philanthropic work as well. “We think we can still make a profit and make a difference in society. We can benefit shareholders and the community at the same time.”
A purpose other than making a profit is critical in driving performance, says Keys. Staff want to know they’re doing good work and that people are better off because of it. Keys says staff turnover is half that of the Australian health industry average, representing millions of dollars in saved costs every year. He says management doesn’t believe it has a mortgage on knowledge and has instituted a “Stars Program” to allow staff to feed in ideas. Aspen also runs an alumni “Network” program, which allows former staff to stay in touch with each other and the company — and also to hear about job opportunities.
In 2009, Keys and Walker established the Aspen Foundation, which receives a percentage of the company’s profits as well as donations from the staff and supporters. Its mission is to undertake life-changing healthcare through significantly reducing or eradicating key illnesses in the Australian community, including a focus on trachoma and scabies in Indigenous communities.
Measuring clinical performance and reducing clinical incidents provides benefits to Aspen’s patients, but there is also a solid business reason. “It drives so much business. It just means that every site is a reference site,” says Keys.
In 2013, the two founders stepped back from the day-to-day running of the company to “take a more strategic view on the growth of the company” and signing up CEO Bruce Armstrong. They took on the roles of co-chairs and appointed a board including Armstrong, former Aspen CFO Tareq Rahman and former federal health minister Dr Michael Wooldridge.
“It’s not unusual for us to reach out to a board member and say, ‘We’ve got a project. You’ve got some experience in Africa — would you mind giving an overview brief and providing input?’ That keeps our board connected with the detail of what’s going on.”
Keys and Walker now focus on longer-term strategic issues such as developing key relationships. For instance, rather than just having a transactional relationship with a client, they are asking how to have a strategic relationship that could lead to significantly larger business, perhaps by collaborating or forming partnerships with them. However, the pair remain highly focused on the business and the good they can do.
“We go to Iraq and travel to the hospitals we’ve set up and run,” says Keys. “We meet the Iraqi staff who’ve now got jobs because we re-established the hospital. We visit an Indigenous community and see the health professionals we’re providing, which means those people can stay on country with family and have their care delivered. You can’t help but love that sort of work.”