Nov 7, 2010
The little hospital that could
Thomson Medical Centre has risen from humble beginnings
The private property at the junction of Thomson and Balestier roads that TMC founder Cheng Wei Chen bought to start his own practice. -- PHOTO: THOMSON MEDICAL CENTRE
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It is the little hospital that could. Started as a small set-up, it has emerged as the dominant, money-spinning player in private-sector births in Singapore.
As the story goes, in the 1970s, Dr Cheng Wei Chen, founder of Thomson Medical Centre (TMC), bought a private property at the junction of Thomson and Balestier roads. It had once been the old Novena Church premises.
He used it to start his own obstetrics and gynaecology (O&G) clinic.
He had left government service - he was a gynaecologist at KK Hospital and Singapore General Hospital. But his dream was to build Singapore's first private hospital for women and children.
In 1979, he secured the next-door site, then a Yamaha Music School. He pumped $10million into creating a 4,000 sq m, four-storey medical facility with 120 beds.
Of his foray, Dr Cheng - popularly known as 'Dr W.C. Cheng' - said in a 2003 interview: 'I never had the time (in government service) to develop the close doctor-patient relationship I wanted in terms of showing empathy, kindness and just talking to the patient.
'In founding this hospital, it was a chance to do everything I believed in.'
Thirty-one years later, TMC is still a small niche player.
It has just 157 beds, although the building now has six storeys. Despite the addition of a new $10million wing in 1997, the 1970s facade has not changed that much.
But the business is now worth $513million, more than 50 times what Dr Cheng first put in, and the amount that 'remisier king' Peter Lim has it valued at.
By last Friday, Mr Lim - who recently tried to buy English football club Liverpool - had acquired 54.4per cent of TMC's stock, including Dr Cheng's stake.
For better or for worse, all eyes have been on TMC this past week.
Other than whetting a hungry billionaire's appetite, it also made the news for an in-vitro fertilisation (IVF) blunder.
A couple who had sought treatment at a TMC unit, Thomson Fertility Centre, were shocked to learn that their baby's DNA did not match that of the husband's.
The five-week-old infant has a different skin colour from its parents, a Chinese Singaporean woman and a Caucasian man who is a permanent resident here.
The Ministry of Health has since suspended the fertility clinic from taking on new patients. Initial investigations have found shortcomings in the centre's existing processes.
Dr Cheng, now 79, has escaped the most part of the media furore. He is said to be overseas and is expected to return on Tuesday.
TMC group chief executive officer Allan Yeo did not comment directly on the recent events but told The Sunday Times that the hospital 'has worked hard to build our reputation over the last 30 years... and will continue to focus on our mission to provide high quality service to our patients and their families'.
President of the Singapore Medical Association Chong Yeh Woei felt that while it was too early to tell whether TMC's reputation had been shaken by the IVF episode, the centre has 'always been a niche player that has concentrated on what it does best - paediatrics and O&G'.
He said: 'Reputations are not won overnight and TMC's is a result of decades of hard work and systematic investment in systems, software and people.'
Indeed, the imbroglio is unlikely to detract from TMC's lucrative business of baby-making. Despite declining national birth rates, it has churned out increasing numbers of newborns. Last year, it delivered 9,056 babies, a 36per cent increase from the 6,628 in 2005.
A Singapore Healthcare report by Standard Chartered Equity Research in September described TMC as the market leader in O&G, with a 23per cent share of private-sector births last year.
The 830-bed KK Women's and Children's Hospital (KKH), which serves both the public and private sectors, is a close second in the latter category with its 22per cent share.
Celebrities like actress Zoe Tay go to TMC - and for good reason. Earlier this year, it topped the health-care sector in the latest Customer Satisfaction Index of Singapore.
TMC's rise has become most apparent in the past five years, following difficult times earlier in the decade, when it posted losses in 2001, and again in 2003 because of the Sars outbreak.
It has been on the up since becoming a listed company in 2005. In the last financial year, it made a $12.72 million after-tax profit. This year, it is expected to see a profit too, and it is buoyed by its two new medical centres: Thomson Paediatric Centre and Thomson Women's Cancer Centre.
Observers note a key reason for its success: TMC has resisted diversification.
Co-head of research at DMG & Partners Securities Terence Wong said: 'It's not one of those multi-disciplinary hospitals where you see a lot of sick people. It has positioned itself as a 'happy' hospital celebrating life.'
In an interview in 2002, Dr Cheng Li Chang, a TMC board member and Dr W.C. Cheng's son, explained: 'We are a niche player. We'll confine ourselves to our core competencies in women's and children's health care, on which we've staked our claim for the past 25 years.'
And it has built around these 'core competencies'. Apart from the fertility, paediatric and cancer units, it also has a breast clinic, lifestyle centre for health screenings and anti-ageing programmes.
Much of this winning strategy can be credited to Dr W.C. Cheng, a ballroom-dancing, koi fish-loving man who once said he wanted to cater to women from 'from birth to grave'.
A savvy businessman and a charismatic medical pioneer who delivered Singapore's first IVF triplets, he 'took TMC to the next level, especially with the initial public offer in 2005', said Mr Wong.
Dr Cheng's reputation also helped attract established doctors into the fold, like the late Professor Wong Hock Boon, who was known as the father of paediatrics.
Dr Cheng would personally recruit doctors, said Dr Adrian Tan, a gynaecologist at ACJ Women's Clinic, a practice Dr Tan set up with two othpper doctors at TMC five years ago. 'He told me, 'If you ever do come to private practice, please consider Thomson.' He made you feel very welcome.'
Dr Yeo Ker Chiang of the KCYeo Clinic & Surgery for Women recalled that in the mid-1990s, some doctor tenants were unhappy when construction of a $10million extension to the building took longer than expected to be completed.
'But many of us thought it was not a nice thing to walk out on Dr Cheng then... It was he who added prestige and reputation to the place,' said the gynaecologist, who has been at TMC for 22 years.
The upside of keeping things small is also the 'family' atmosphere, say patients. Nurses don lightly printed uniforms, not clinical whites. And the rooms, decorated in floral wallpaper, boast a homely feel.
All this is no coincidence. Dr Cheng's intention was to 'design hospital rooms to resemble bedrooms at home so that women can give birth in a non-threatening environment', he once said.
But with a new, possibly bottom line-driven owner taking over, is this winning formula set to change?
'People are wondering, as we do not know what lies ahead,' said Dr Yeo. 'But he (Mr Lim) probably knows this is a good niche to exploit - a mother and child hospital that is very doctor-oriented. If some of us walk out today, a sizeable number of our patients will follow.'
But DMG & Partners Securities' Mr Wong said that rather than making massive changes, Mr Lim - who also has holdings in Malaysian health-care services provider TMC Life Sciences - is more likely to 'synergise' the two businesses.
Mr Wong added: 'I don't think he will do anything to rock the boat.'
Thomson Medical Centre: From $10m TO $513m
1979: Dr Cheng Wei Chen invests $10 million into Singapore's first private women and children's hospital, fully air-conditioned and with 120 beds. It is billed as a medical centre with 'home comforts'.
1987: Thomson Medical Centre (TMC) becomes the first private hospital to set up an in-vitro fertilisation clinic. The Thomson Fertility Clinic is run by a doctor, two embryologists and a nurse - all had been trained at King's College Hospital.
1988: Dr Cheng delivers Singapore's first in-vitro fertilisation (IVF) triplets.
1989: Dr Cheng delivers Singapore's first surviving IVF quadruplets. The three girls and one boy were born on May 14 - Mother's Day.
1998: TMC introduces a breast clinic and a healthy ageing centre.
2003: Sars strikes. The hospital reports losses of $6.3 million.
2004: Dr Cheng is awarded the Entrepreneur of the Year, given out by the Association of Small and Medium Enterprises and The Rotary Club of Singapore.
2005: TMC lists itself on the SGX-Sesdaq board.
It also rolls out plans to expand into Vietnam by providing hospital consultancy services there.
2007: Its shares are traded on the SGX Mainboard.
2009: It sets up Thomson Women's Cancer Centre, to help diagnose and treat breast, gynaecological and colorectal tumours in women.
2010: It sets up Thomson Paediatric Centre, to provide specialist services to newborns, infants and children.
A hospital it built in Vietnam, the Hanh Phuc International Women and Children Hospital, opened last month.
In November, billionaire Peter Lim acquires a 54.4 per cent stake in TMC. Mr Lim has valued the business at $513 million.
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