A (very) brief guide to Green-Hospital Investments in Asia

Posted By Damjan DeNoble

Apologies to readers for not having updated in close to two weeks, and thank you James Flanagan for picking up the slack.

I am currently studying for the LSAT (coming up next Monday, June 8th 2009) and am working on what should be a very in-depth piece on the budding China-North Carolina relationship in the health care sector, with loads of census data and several (more than two) interviews with some very interesting North Carolinians.

Until then, I feel bound to write a brief post so that you all don’t think that this blog is floundering in its mission to provide relevant health industry analysis.

…

I was out last night with very good friend, Ben, a San-Francisco based VC associate, who’s firm is focusing its energies on green products.  At some point, I mentioned that I thought it likely there were  Green-Investment opportunities in the budding Asian hospital market.

At the time that I made that claim,  however, it was, at best, an intuitive guess that I had posited only a few months ago after reading a series of articles, at different times, having to do with health care delivery systems in developing countries and their impact on the environment.

Now, one day later, it remains an intuitive guess, but I have sufficiently gathered my thoughts to list  three Green-Investment areas in the Asian market.

———————————-

1.) Sustainable Healthcare Real Estate Companies

This article describes the general excitement surrounding the unveiling of a Green-patient room that maximizes a recovering patient’s exposure to sunlight and nature, while also minimizing the inefficiencies associated with power generation by utilizing “smart” building materials that create natural heating and cooling patterns.

The significance of the green patient room in the Asian context arises from the fact that the costs associated with green building are lower in Asia than in the United States, and the ROI of green building stems in large part from savings on long term cost for facilities that employ sustainable green design.  When the initial costs of building are lower, it then follows that the ROI will be even greater.

Moreover, in countries-on-the-move like India, Vietnam, and China the value proposition of Green-Healthcare-Design becomes much stronger because it takes on a political dimension.  Every hospital built with green technology becomes a flagship project to win the hearts and minds of the global environmental movement – “We’re not polluting as much as we used to- look at our new 1000 bed green hospital that runs on sunshine!”

A sustainable healthcare real estate company could stand to win some big projects in such an environment.

————————————-

2.) Environmentally-Friendly Waste Disposal Companies

This article illustrates a particularly stunning example of improper hygiene practice (not to mention corruption) in a Hanoi hospital.

On August 10, while inspecting a truck carrying waste that was bought by a waste collector in Thanh Tri district, Hanoi, state agencies discovered 700kg of waste which contained drug boxes, plastic solution-pipettes, syringes, etc. This source of medical waste was from the Vietnam-Germany Hospital. An official of this hospital was dismissed for involvement in this scandal.

——————————–

Three weeks later, the Environmental Police Agency seized more than two tonnes of medical rubbish at the K and Bach Mai hospitals in Hanoi. Checking records of those hospitals, police suspect that they also have been selling medical waste to private establishments to reprocess into plastic products like basins, dippers, tumblers, etc.

The situation described reminds me of various government-funded and government-run hospitals that I have visited in Botswana, the Balkans, and China, where the presence of accumulated waste and/or the scent of burning waste is obvious and ever-present.

Due to overburdened medical staff and crowded health care systems, negligence in waste disposal can become a long term phenomenon, devastating the surrounding community and environment, as described in this  excerpt  from the  Health Care Without Harm website;

Many rural hospitals and clinics discard medical
waste along with regular trash, which increases
the risk of spreading diseases, especially in
poor communities that recycle materials from
open dumpsites. Other health care facilities
use open burning or make-shift incinerators to
process their waste. However, in so doing they
expose communities downwind to toxic byproducts
(such as dioxins, furans, mercury, lead,
hydrogen chloride, polynuclear aromatic hydrocarbons,
particulates, and other pollutants) and
create hazardous ash. As immunization and
rural health programs expand in developing
countries, the problem of medical waste treatment
and disposal becomes critical.

Under these circumstances third party vendors that provide affordable and safe waste-disposal solutions, if they exist, will have no shortage of business.  Again, this sort of venture makes sense politically since stories like the one from Hanoi prove to be very embarrassing for leaders.  In countries where the currency of trade is one’s ‘face,’ this can be a powerful incentive for business.

For really cool examples of clean, affordable waste disposal ideas, check out these designs from a Health Care Without Harm sponsored contest.

—————————————————

3.) Companies that streamline and “greenline” hospital processes.

The apparently well-established Japanese company, Green Hospital Supply, purposes to reduce the carbon footprint of your health institution by focusing on everything from the IT network, to the toilet paper in the rest room.  Every hospital in the country cannot be torn down and built from scratch, so re-engineering firms like Green Hospital Supply are always going to have work.

I do not know of anyone doing this in China, but the first firm that does will be  worth a good look from investors.

…FINAL NOTE:

This subject is new to me, so if you have information, please do send it in and add to the data bank.