TOKYO -- Japan's big trading companies have found a new way to tap the wealth of Asia's emerging middle classes: Team up with hospitals and other medical service providers in the region.
Mitsui & Co. in 2008 established its medical healthcare business division as part of its consumer service business unit and in 2011 acquired a 30% stake in private hospital group Integrated Healthcare Holdings for 90 billion yen.
Now IHH Healthcare operates numerous hospitals in Asia, including Mount Elizabeth Novena Hospital in Singapore, which it considers a hub of sorts. The hospital, which likes to compare itself to a luxury hotel, attracts a number of wealthy patients needing highly advanced medical treatment.
In 2013, as part of a plan to draw more patients, the Japanese trading house and a medical organization in Kobe, Hyogo Prefecture, opened the Sing-Kobe Liver Transplant Center within Mount Elizabeth Novena Hospital. Japanese specialist physicians work there as resident doctors.
The Japanese group is now hunting for hospitals abroad that it can partner with and where transplant recipients can go for their regular checkups.
Officials at Singapore-based Medicro Partners have visited Indonesia a number of times to evaluate clinics that specialize in tests for living liver transplants. Their goal is to build a cross-border medical network. Medicro Partners is a 100% subsidiary of Mitsui.
IHH Healthcare is Asia's leading private hospital group, with 37 hospitals in 10 countries. It plans to increase the number of its beds to 9,000, 50% more than the current level. However, the Malaysia-based group is not Mitsui's only partner.
Asia's total medical expenses are expected to grow 60% from their 2013 level to $1.6 trillion by 2018 as populations grow and age.
Other trading houses are wooing Asian medical allies as well. In March, Toyota Tsusho opened Sakra World Hospital in Bangalore, India. Its partner in the venture is a Secom group company. In summer, the Nagoya-based company dispatched cost-reduction and process-improvement specialists to advise hospital staff.
The specialists had been helping to streamline logistics and work processes at a number of group factories and facilities in Japan using Toyota's celebrated lean production system.
The hospital used to have a lot of waste because it could not accurately estimate the number of patients it would receive. However, by managing data on use-by dates of drugs and arranging medical goods by category and purpose, the hospital succeeded in cutting the inventory of drugs and materials by 30%.
Takeshi Matsushita, managing executive officer at Toyota Tsusho, said that by participating in hospital operations, the company will find it easier to do business in other services, such as intra-hostpital logistics.
Sojitz, meanwhile, has a capital and business tie-up with Capital Medica, which offers a wide range of services related to the hospital business.
The two companies plan to dispatch experienced doctors and accountants to hospitals and teach efficient hospital management methods. They have already launched marketing activities in Indonesia and Vietnam.