Going Global: The Perils and Potential of International Expansion

A growing number of U.S. medical institutions have been responding to a more challenging environment at home by extending their brands and intellectual capital beyond our borders, where growth opportunities are more abundant and they have the ability to fundamentally improve the health status of a significant populations.

Over the past decade, these efforts have focused largely on the Middle East, due to the region’s vast oil wealth, passion for U.S. brands and philanthropic culture, but the Middle East also presents many challenges, prompting some U.S. hospitals and health systems to look at Asia, Eastern Europe and Latin America, which offer the prospect of less complex and more transparent partnerships.

What U.S. institutions are doing
The motivation to pursue international business varies by institution, but the challenge is similar: how do you create a business model that leverages your institution's capabilities without diverting a disproportionate share of human and capital resources from the core domestic business?

Some institutions have focused on activities that leverage existing technology and capabilities. Examples include extending clinical expertise and knowledge to international markets through telemedicine and "interactive audiovisual grand rounds," clinical decision support, academic training and educational activities — services that are intellectually stimulating and central to the mission of most academic medical institutions yet don't require a large commitment of staff to the region.

Others have created robust and dedicated infrastructures enabling them to pursue more comprehensive relationships, such as developing and managing medical education and clinical facilities across the globe. Medical school curriculum development, for example, has the promise of training the next generation of physician leaders who will forever have the "imprint" of the training institution, and loyal physicians are the best source of patient referrals.

Joint research collaborations can help the current state of academic medical centers from a funding perspective while providing insight into new patient populations and diverse disease patterns outside the United States. Regardless of the strategy, hospitals and health systems are increasingly pursuing international business to diversify and generate new sources of revenue, build global brand awareness, create and distribute intellectual capital and expand the potential for philanthropy.

Analysis of failures
Some international business ventures established by pioneering academic institutions failed to deliver on the promise of improving healthcare access and quality. The challenge of transferring knowledge and technical capabilities and deploying personnel across oceans proved more difficult than many anticipated. There was a disconnect between the customers expectations and the ability of institutions to meet them. The bar is being set higher as customers gain experience and become more sophisticated in dealing with U.S. healthcare institutions.

Few activities are as potentially divisive as international ventures, so making sure your leadership is in lock step with respect to purpose and priorities is absolutely essential to the success of any program. This is especially challenging within academic medical centers where the triadic missions of clinical care, education and research are not easily aligned. You should develop a decision matrix that regulates the allocation of resources to projects based on risk and the probability of achieving certain milestones within a reasonable timeframe; analyzed through a comprehensive and systematic due diligence process to thoroughly vet each opportunity.  

Together, these internal control mechanisms can avoid costly management distractions, safeguard your brand and allow your institution to reap the many rewards of going global.    

Ed Thompson is the former executive director of Johns Hopkins Medicine International and an independent management consultant. He can be reached at 201-522-6456 or ethomp27@gmail.com.

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