Ali Hashemi knows the health care industry well in the Middle East. He co-founded Avicenna Partners, a specialized health care venture capital firm. Hashemi serves as managing partner of Avicenna and as director of Amana Healthcare. He is a graduate of Duke University and serves on the Middle East Regional Advisory Board for Duke University’s Fuqua School of Business.
Hashemi discusses the health care industry in the Middle East in the following Q&A.
Q) What do you want people to know about the business of health care in the Middle East?
Health care in the Middle East is a story of opposites. It is a web of constraints, yet possesses immense opportunity. The sector is historically underdeveloped, but is fertile ground for world-class innovation. Working in health care in the Middle East can be at times massively frustrating, but mostly immeasurably rewarding. The Middle East, in my view, is currently and will continue to be the backdrop to some of the most interesting and exciting advances and investments in the health care arena. Although the sector is behind its mature-market peers and riddled with gaps, the irony is that these large swaths of white space, unencumbered by legacy, create opportunities to “get it right.”
Health care providers and companies, if smart, can leap frog over best-of-breed peers in other markets because heavy legacy systems with high switching costs often do not influence strategic, business, and clinical decisions.
For example, one of our flagship VC investments, Amana Healthcare, is a hospital brand totally conceived and built from the ground up in the Middle East. The company’s envisioned care model was drawn up on a blank sheet of paper – drawing from global best practice but nuanced and adapted to the needs of the region. The company has none of the drag or the legacy of the international partners that peer health care entities in the region are quick to enlist for guidance and support. Amana has now evolved into a world-class benchmark in the care of long-term care patients. In my opinion, you would be hard pressed to find another center in the world that provides a comparable level of clinical care or focus on quality of life.
Q) In your role at Avicenna, you look for good investment opportunities in the health care sector. What are some of the qualities you evaluate in determining whether a potential opportunity has merit?
Because of who we are as a firm, we seek out investment opportunities that may be challenging for other investors to take on. The more established straightforward plays – general hospitals, polyclinics, etc. – we leave to other players in the market. For us, a “good” investment has to fulfill a number of criteria.
At the most basic level, we obviously look for opportunities that provide sustainable above-average returns on an investment basis. But the higher-order filters for us are more stringent and sometimes esoteric. Other questions we ask are:
• Will the investment deliver differentiated results and impact on its stakeholders (whether they be patients, regulators, payers, etc.)?
• Is there an opportunity to innovate and develop a capability set that is truly world-class?
• Does the management team exhibit the same set of strict ethical and professional standards that we hold true for ourselves?
We particularly like to look at products and services that are difficult for other players to tackle. Most often, these will be opportunities in a context where the regulatory standards or reimbursement coding may be underdeveloped and we would need to work closely with our counterparts in government to help rewrite laws or regulatory guidelines and evolve the landscape.
Q) How do you see the future of the health care business evolving in the Middle East?
We see great potential. The evolutionary process that has taken several decades in other markets has been condensed to a fraction of that here. What’s important is that the raw materials – in terms of political will, investment dollars, and smart people with great capabilities – are in place. I believe to a large degree those elements do exist here. The region has some very capable players and individuals at all levels – regulatory, payer, and provider.
Q) How do successful businesses stay ahead in a sector like health care that is constantly evolving?
Putting your reputation first is the best advice I can give. If your stakeholders respect you and implicitly trust your professional intent, the impact on all dimensions of the business is profound, whether it be the strategy, political navigation, market traction, or overall economics. We make sure that every member of our team is philosophically aligned with the extremely high professional and ethical standards to which we hold true. No compromises.
Q) What advice would you have for MBA students who aspire to either work or start businesses in the Middle East?
Capitalize on your strengths, but be honest about your weaknesses. Find a role that allows you to stand out and distinguish yourself on the basis of the former, but simultaneously helps you shore up gaps on the latter. Your first job out of B-school may not be the dream role you want, but as long as it is the next best step forward you are on the right track. Let your gut guide you when assessing riskier opportunities and new ventures – it’s not for everyone. And as every good Duke alum knows, in whatever you do the mantra to live by is “go hard or go home!”