Lippo’s John Riady taps doctor app to double medical revenue in 5 years

Lippo Group's John Riady speaks at the Indonesia PE-VC Summit 2020 in Jakarta.

Indonesian conglomerate Lippo Group plans to give a shot in the arm to its core health care business with a revamped telemedicine app next year that it says will improve patients’ access to doctors.

The app will primarily target people who exhibit zero to mild symptoms, John Riady, CEO of the group’s flagship company Lippo Karawaci, told Nikkei in a recent interview.

The company operates Siloam International Hospitals, Indonesia’s largest chain of private-sector general hospitals in terms of beds. Health care accounted for 57% of Lippo Karawaci’s 12.3 trillion rupiah ($862 million) in revenue in 2019.

Riady looks to boost the health care segment’s revenue by 19% a year, adding that he expects revenue to at least double in five years.

After the coronavirus pandemic hit last March, it became difficult for hospitals to take in patients. Siloam’s revenue for April plunged 35% from a year earlier.

“About 60% of people who go into the hospital really don’t have to go to the hospital,” Lippo Karawaci CEO John Riady tells Nikkei. (Photo by Koya Jibiki)

Lippo is banking on digitization to reverse its fortunes. Although the group has invested in this area, its current mobile app is limited mainly to scheduling doctor visits. For remote medical examinations, patients need to connect with their computers or use third-party apps.

“I think the app can still be much more improved,” Riady said.

Lippo will overhaul the app next year so that it will feature online examinations, digital medical charts and online prescriptions filing.

“About 60% of people who go into the hospital really don’t have to go to the hospital,” the CEO said.

Boston Consulting Group says 80% of patients approve of online consultations with doctors. The innovation reduces costs by an average of 30% compared to face-to-face visits, and physicians can save time by 20% to 25%.

The sheer size of the Indonesian archipelago makes getting around difficult. The number of hospital beds in Southeast Asia’s biggest economy is below international standards and in rural areas especially, people are unable to fully access medical care due to poor infrastructure.

Virtual medicine holds the potential to level the playing field because of its accessibility. The Indonesian Medical Association welcomes this innovation.

Launched in the previous decade, local startups Halodoc and Alodokter are pioneers in Indonesia’s medical app field. Halodoc boasts over 20,000 medical practitioners on its platform while Alodokter has more than 30,000 physicians.

The coronavirus outbreak is accelerating the penetration of the two apps, which share revenue with member physicians based on usage count.

To attract patients, Lippo will lean on the reputation of Siloam, which has 39 locations around the country and employs 3,300 doctors. The network’s distinctions include Indonesia Hospital of the Year in a 2017 report by  Frost & Sullivan, according to Siloam’s website.

A nurse station at a Siloam hospital: The sheer size of the Indonesian archipelago makes getting to a doctor difficult. (Photo courtesy of the company)

Lippo’s re-designed app will be rolled out in all 39 hospitals in phases. Also in Siloam’s arsenal is its relationship with Marubeni, the Japanese trading house that owns a 5% stake in the chain.

Marubeni has carried out distance training of doctors in Japan and Russia and will try a similar programs at Siloam. The trading house has also built up a medical supply chain through its services in Southeast Asia, such as blood testing.

Indonesia spent $34 billion on health care in 2019, less than a tenth of the spending in Japan. But the rise of the country’s middle class and an expected increase in patients with lifestyle-related diseases creates fertile ground for growing health care businesses.

Because of Indonesia’s restrictions on foreign investment, companies headquartered offshore cannot run hospitals independently. But Riady’s sights extend beyond Indonesia.

“We are bullish about health care in all of Asia,” Riady said.

Lippo operates hospitals and clinics in Singapore and Myanmar. It looks to expand its international footprint and roll out the telemedicine app after assessing regulations and the levels of medical care in each country.

Online medical services are taking off across Southeast Asia. Malaysia’s IHH Healthcare has introduced its own app while Thailand’s Bangkok Dusit Medical Services is making similar efforts.

This article was first published in Nikkei Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.