NAB Business Research & Insights: How two schoolmates shook up the global healthcare industry
Two Australians – a doctor and an engineer – launched the ‘private healthcare in tough conditions’ industry and grew a business that now fights Ebola and runs warzone hospitals.
Dr Andrew Walker and Glenn Keys have been best mates since they met as 12-year-olds at high school in Newcastle, New South Wales. 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 senior logistics and sales for defence and aerospace company Raytheon.
In 2003, at the age of 40, the two decided to go into business together. That business, Aspen Medical, now employs more than 1,600 professionals, mainly medical. Headquartered in Canberra, it does everything from treat injured oil rig workers in Australia and contain Ebola outbreaks in Africa to heal wounded civilians in Middle Eastern war zones.
“Glenn wanted to change jobs so that he could better provide for his son, who has Down’s 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.”
Taking on that first contract, Walker and Keys had no staff and were confronted with entrenched bureaucracy.
“The way things had worked since 1948 was that a surgeon would work from 10 am to 2.30 pm, and operate on maybe four patients,” Walker explains. “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 to 12am, so that 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 and doing operations – 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 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.”
The key to their success
Aspen Medical has provided healthcare solutions to governments, defence forces and humanitarian organisations in Africa, Asia, the Gulf, the UK and the USA. When Ebola broke in Sierra Leone in 2014, the Australian, American, British and New Zealand governments contracted Aspen Medical to run Ebola treatment centres. The business is currently operating two 48-bed hospitals in Mosul, having been contracted by the World Health Organisation to provide care to Iraqi civilians fleeing ISIS.
While launching at a time when governments and other organisations were looking to outsource their healthcare capabilities certainly worked in Aspen Medical’s favour, it doesn’t fully explain its success. Walker and Keys agree that their combined military, medical and commercial experience have also been important. But they say there’s another key ingredient.
“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. “We’ll put in a tender bid that costs out doing what the potential client wants done in the way they want it done, and then we’ll give them a second tender bid that shows how, by thinking outside 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 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,” 54-year-old Walker explains.
The school pals from a regional city have 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-unborn child. She was operated on at the hospital that Aspen Medical runs, and both she and her baby survived. You just can’t buy the sense of fulfillment that comes with playing a part in stories like that.”
Andrew Walker and Glenn 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 backing 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 its staff make, has a Reconciliation Action Plan and backs several charities, including those that support people with disabilities. It also funds a foundation that aims to eliminate trachoma in Indigenous communities, among other goals. 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.
This article was first published in Business View magazine (Issue 24). The online version can be found by clicking here.