The Canberra healthcare company the world’s governments turn to: How two schoolmates shook up the global healthcare industry
In an interview with National Australia Bank (NAB), Aspen Medical’s Dr Andrew Walker reveals some lessons which SME-owning customers can learn from Aspen Medical’s extraordinary global success.
Dr Andrew Walker and Glenn Keys have been best mates since they met as 12-year-olds at a Whitebridge High School in Newcastle. Walker went on to study medicine, serve in the Australian Army and pursue dual careers as a doctor and entrepreneur. Keys studied mechanical engineering, also served in the Army then worked in a senior logistics and sales role for the defence/Aerospace company Raytheon.
In 2003, at age 40, they resolved to go into business together. That business, Aspen Medical, now employs over 1,600 (mainly medical) professionals. Headquartered in Canberra, it does everything from treat injured oil rig workers in Australia, to contain Ebola outbreaks in Africa, to treat wounded civilians in Middle Eastern war zones.
“Glenn wanted to change jobs so that he could better provide for his son, who has Down syndrome and do something more worthwhile,” Walker explains. “We kicked around a few ideas but ended up writing a report on how Britain’s National Health Service (NHS) could cut waiting times for operations. After we submitted the report the NHS, which as far as I knew had never contracted anything out to the private sector, asked us to implement the solutions we’d suggested.”
On top of having no staff of their own, Walker and Keys were confronted with an entrenched bureaucracy that “resembled the Indian railways”.
“The way things had worked since 1948 was that a surgeon would work, in reality, from 10am – 2.30pm and operate on maybe four patients,” Walker says. “We incentivised the doctors and negotiated with the nurses’ union to increase throughput. We introduced a suite of what were seen as crazy ideas. Such as keeping operating theatres open from 4pm-12pm so twice as many patients could have a procedure every day.”
Reporting for duty
At the same time the NHS was looking to outsource, so was the Australian military. “The Army had deployed to the Solomon Islands. It had put the healthcare side of things – setting up a hospital, doing operations, providing investigations pharmaceuticals – out to tender,” Walker says.
Aspen Medical won the tender. The only problem was it didn’t have the capital to buy the equipment needed to provide what it had promised to deliver.
“We needed $1.4 million for a mobile surgery,” Walker explains. “Everyone we approached said, ‘You’re crazy, we’re not lending you money for kit that you’re going to take to a war zone.’ Finally, I talked to my long-time personal banker at NAB in Newcastle and explained the fix I was in. She looked into it then came back and said, ‘Yeah, we’ll do it’. I’ve taken out plenty of loans but that’s the one I’ll always remember. It was crucial to the business getting off the ground.”
Undercharge and over-innovate
Space doesn’t permit any but the briefest outline of what Walker and Keys have achieved over the last 14 years. Aspen Medical has provided award-winning healthcare solutions to governments, various defence forces, resource companies and humanitarian organisations throughout Africa, the Asia-Pacific, the Gulf region and the UK and USA. When Ebola broke in Sierra Leone in 2014, the Australian, American, British and New Zealand Governments contracted to Aspen Medical to run an Ebola Treatment Centre. The business is currently operating two (x2) 48-bed hospital in Mosul having been contracted by the World Health Organisation to provide care to Iraqi civilians fleeing ISIS.
While Aspen Medical benefitted from launching when governments and organisations such as the UN were starting to outsource their healthcare capabilities, that hardly explains its global success. Walker and Keys’ military, medical and commercial experience, along with their project-management skills, have been important. But they were necessary but not sufficient conditions for them almost single-handedly creating a new private-healthcare-in-challenging-circumstances industry.
“Other businesses offer the some of the same sorts of services we do. But they don’t have our ‘special sauce’ and haven’t so far been able to replicate our success,” Walker says.
What is it that special sauce?
“Glenn and I are good at coming up with new ways of doing things efficiently that don’t cost a lot of money,” Walker says.
Aspen Medical can’t seem to stop innovating even when it would be in its short-term commercial interest to do things by the numbers.
“We’ll put in a tender bid that costs out doing what the potential client wants done in the way they want it done,” Walker explains. “Then we will give them a second tender bid that shows how, by thinking outside of the box, they can achieve better results at a lesser cost. We’re not arrogant, we’ll do things the conventional way if that’s what the client wants. But it’s that kind of value add, freely offering up solutions that haven’t been thought of or asked for, that separates you out from the pack.”
Career satisfaction money can’t buy
There’s been no shortage of offers but Walker and Keys aren’t interested in selling or listing their business. “We’re not looking to retire and we don’t need capital,” the 54-year-old Walker explains.
The public-school pals from a blue-collar regional city long passed the point of being concerned about providing for their families. So, what keeps them engaged?
“Providing healthcare in challenging locations to people who really need it,” says Walker. “Recently, in Mosul, a pregnant woman spent months hiding from the fighting in her basement. When she was almost full-term, she attempted to walk to a hospital and got shot by ISIS. The bullet went into her then into her unborn child. She was operated on at the hospital Aspen Medical runs and both she and her baby survived. You just can’t buy the sense of fulfilment that comes with playing a part in stories like that.”
Walker and Keys were jointly named EY’s Australian Entrepreneur of the Year in 2016 and only narrowly missed out on becoming EY’s World Entrepreneur(s) of the Year. Here, Walker gives some advice to aspiring entrepreneurs.
Trade a comfortable career for a spectacular one
When I was growing up, the aspiration was to get good marks and get into law or medicine. Granted, figures such as Elon Musk have made entrepreneurship much cooler in recent times. Nonetheless, many of the best and brightest still go into legal, medical or financial careers rather than back themselves to launch a potentially world-changing business. I’ve encouraged my son, who’s studying law, to pursue his entrepreneurial dreams. I’d encourage others to do likewise.
Be a for-purpose business
Aspen Medical matches any donations staff members make, it has a Reconciliation Action Plan, it’s backed Down Syndrome societies and Special Olympics and given to many charities. It also funds a Foundation to do things such as eliminate trachoma in Indigenous communities. Aspen Medical is a for-profit business but also a ‘for purpose’ one that aims to have a positive social impact. I’m sure that commitment to giving back has been a factor in its commercial success.
Reinvent the business as it scales up
Whenever a business doubles in size you need to go back to the drawing board and re-evaluate things such as the management structure. Once Aspen Medical hit $200 million in turnover, Glenn and I knew we had to appoint a CEO to run the business while we worked on it not in it. Now we’re turning over even more than that, we’re preparing Aspen Medical to operate more like a public company by increasing the number of directors and putting formalised governance arrangements in place.
Do your homework but don’t procrastinate
You want to make informed decisions rather than just taking a punt and hoping to get lucky. You need to do your homework. But people use doing their homework as an excuse to vacillate. You can’t wait around for the perfect time to launch a business. Understand the risks, do what you can to mitigate them but then act.