28/05/2009 - 00:00

HFC gets back to business

28/05/2009 - 00:00


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THERE are all manner of adjectives used to describe the events surrounding the birth of a child; for fertility clinics, the word 'profitable' is one of them.

HFC gets back to business

THERE are all manner of adjectives used to describe the events surrounding the birth of a child; for fertility clinics, the word 'profitable' is one of them.

Almost a decade ago, one doctor, one scientist and one fertility nurse started a small business in a single-room suite in Subiaco. The clinic, which was later relocated to the grounds of Hollywood Private Hospital in Nedlands, now employs a team of more than 40 doctors, nurses, scientists, counsellors and administration and management staff who provide a service to those having difficulty conceiving a child.

Headed by Simon Turner, Hollywood Fertility Centre (HFC) boasts an annual turnover of more than $7 million.

National statistics support the growth story in the assisted reproductive therapy sector. The latest figures from the National Perinatal Statistics Unit show the number of treatment cycles is on the rise, as is the age of the women seeking assistance.

The growth in the sector has not gone unnoticed. What was very much a cottage industry just a few years ago has attracted the interest of investment banks. The most famous transaction in the sector remains the part-purchase of Melbourne-based Monash IVF in 2007 by the private equity arm of ABN Amro.

Industry heavyweight Sydney IVF, which has a large stake in the Perth-based HFC, counts Macquarie Bank executive director Rowan Ross as a board member. In turn, Sydney IVF has been involved in investments that reach all the way to a clinic in Thailand.

HFC general manager Colin La Galia said the clinic acted as a standalone business, albeit with support from the Sydney-based company.

As one of five major players in the niche Western Australian market - as opposed to just two in South Australia - HFC competes in a competitive industry. The clinic lists high success rates, good reputation, specialist knowledge and affordability as its points of difference.

Like all fertility clinics, much of its revenue comes from government subsidies through MedicarePlus, which provides rebates for expenses over a certain threshold.

Mr La Galia said the clinic had introduced a number of measures to become viable and profitable, which had required input from business-minded individuals to implement.

"It's a case of doctors are very bad business people," Mr Galia said.

"If a client comes in crying, the doctors will say, 'Let's not charge them''. That's not viable for the clinic."

Mr La Galia said it was difficult to balance patient care with business growth and create a viable business when doctors were dedicated to patients and outcomes that were not necessarily profitable.

Annual staff turnover has decreased from 40 per cent to a couple of per cent by applying business principles, like placing people in key roles based on skills rather than seniority.

Mr La Galia said the clinic was largely a recession-proof business.

"Clients will forgo buying a car but they know the time frame for having children is quite small," he said.

HFC hopes to expand its client list through a new service called Pre-implantation Genetic Diagnosis, which is a technique allowing patients to have gene and chromosome screening and testing to identify genetic disorders and abnormalities.

"The procedure in its entirety will be performed at HFC, not sent to the eastern states as is the case with our competitors," Mr La Galia said.

"Introduction of our own day surgery will mean that all associated monies with procedures will go to the HFC bottom line rather than the hospital where the procedure is undertaken."



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