KPJ to focus on increasing revenue per patient, hire more consultants 

NST Tue, Nov 29, 2022 12:43pm - 1 year View Original


KUALA LUMPUR: KPJ Healthcare Bhd will focus on improving its average revenue per inpatient following a strong set of results in the third quarter (Q3) of 2022 supported by healthy patient volume growth. 

Hong Leong Investment Bank Bhd (HLIB) said KPJ also intended to hire more consultants for subspecialties and capitalise on medical discipline and service offerings that could help sustain revenue per inpatient at current levels or improve it further to RM7,000.

"Management indicated that business activities in KPJ DSH2 (Damansara Specialist Hospital 2) has been steadily gaining traction in the months of September-October, and has generated RM800- 900,000 worth of revenue in a mere two months. 

"This new hospital is expected to breakeven at EBITDA-level within three years and management aims to fill 50 per cent of KPJ DSH2's capacity with foreign patients," said HLIB in a note. 

To attract more medical tourists, KPJ will be establishing more centres of excellence, and partnering with more international insurance panels. 

In the pipeline currently, a cardiac and neuro centre is targeted to open next year, orthopedics and traumatology centre in 2024 and a gastroenterology and endoscopy Ccentre in 2025. 

KPJ DSH2 has also gotten a decanting contract for neurology cases from the government, which will help to ramp up its occupancy rate. 

Since the reopening of international borders, KPJ has also made medical tourism a key focus to expedite recovery post pandemic.

Thus far the company generated RM93.1 million worth of revenue from healthcare tourism in the nine-month period this year. 

"In terms of foreign patient volume, it is worth noting that the 9M22 volume has recovered close to 2019 levels, despite international borders still remaining closed in Q1 2022. 

"We would also like to highlight that treating foreign patients is a good way to boost revenue intensity as hospitals are allowed to charge foreign patients 20 per cent more (industry practice) than the charges stipulated in the 13th Fee Schedule," it added. 

The firm maintained "Buy" on KPJ with a target price of RM1.27.

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