Exporting health care: A US health care CEO ups the ante for quality medical services by building hospitals in Mexico and Costa Rica. Next stop: Brasilia

Latin CEO: Executive Strategies for the Americas, July-August, 2000 by Ray Viator

FOR ONE OF THE LEADING families in Hermosillo, Mexico, the decision of where they would have their fifth baby was an important one. Having traveled across the US border to Tucson, Arizona for the birth of their previous four children, the couple had no interest in going to the local, government-run hospital. They did feel comfortable, however, having the baby at Centro Internacional de Medicina (CIMA) Hermosillo, a new private hospital owned and operated by International Hospital Corporation (IHC) of Dallas, Texas.

As president and CEO of IHC, Meagher has spent the last nine years trying to create a private health delivery system in Mexico and other parts of Latin America. It's a challenge that allows him to draw upon his past experiences as CEO of the American British Cowdray Hospital in Mexico City--the largest private hospital in Mexico--and as vice president of international services for Baylor University Medical Center in Dallas. "Our objective is to provide a level of quality that will satisfy the increasing demand of Latin American citizens who prefer to be treated in their own cities rather than travel to the United States," Meagher says.

Larry Meagher believes that more middle- and upper-class Latin Americans will be willing to make the same decision in their choice of hospitals if he can continue to deliver US-quality care in modem facilities like CIMA Hermosillo.

So far, the company's growth has been fueled by a combination of private and institutional investors, as well as by local physicians and business leaders in each market: US$23 million in venture capital and a US$20 million loan from the World Bank's International Finance Corporation (IFC) in 1998. With that funding, IHC has completed the 52-bed acute-care facility in Hermosillo, a 60-bed hospital in Chihuahua and, in January, a 58bed hospital in San Jose, Costa Rica. By the end of the year, IHC plans to open a 58-bed facility in Puebla, Mexico, and to begin construction of a comprehensive emergency-care clinic in the Mexican resort city of Los Cabos.

Each hospital offers complete medical and health care services, as well as intensive care. The CIMA Herrnosillo hospital, for example, has conducted more than 300 open-heart surgeries during the past year. "And our outcomes for each area compare very favorably with the national rates in the United States," Meagher says.

To add credibility to IHC hospitals, Meagher has forged an alliance with past employer Baylor University Medical School. The tie-in makes IHC hospitals affiliates of Baylor and permits enrollment of their staff in Baylor's advanced medical and professional education programs.

Seeing similar needs for private health care in other parts of Latin America, Meagher has registered the CIMA name (which translates as "peak" or "pinnacle" in Spanish) in more than a dozen Latin American cities. In Mexico, Meagher is considering plans to build two new hospitals and acquire two existing ones. In Brazil, where it has acquired a leading health care management company and hospitals in Volta Redonda and Curitiba, IHC is considering plans to buy or build a hospital in Brasilia.

"After a job and a home, health care becomes a high priority," says Ray dunn, president of Latin Health Care Fund, one of IHC's investors. "People want to go to private hospitals and get quality health care.

Meagher also believes better health care facilities can contribute to economic growth. "We were told by Motorola that one reason they chose Chihuahua for their pager manufacturing plant was the IHC hospital. They knew they could get quality health care for their employees."