Read the Conversation
EF: Beginning with a background in computer science, you have built over two decades of experience in the diagnostics field. How did this journey lead you to the role of Chief Operations Officer at Grupo Proa?
CM: My background in computer science and insights into marketing for digital customer segments led me to join the company, where I could contribute to the intersection between the digital world and healthcare. Back in the day, this connection was not this clear, but now it is evident and constantly evolving.
Our diagnostic business also produced information in the past, but typewriters and manual interfaces stood between analyzers and computers, and people used to pick up their lab results physically. Thinking about the sector’s future, I see the crucial role of digitalization. Healthcare professionals need to be well-versed in digital subjects as the boundaries between fields are fading.
EF: What are Grupo Proa’s efforts to extend diagnostic access to both urban and remote rural regions in Mexico?
CM: Access is a global challenge, not limited to Mexico. Recruiting healthcare professionals in remote areas is a widespread issue. Our expansion started in central Mexico and has since extended nationwide, with a presence in 28 of the country's 32 states. We prioritize cities with populations exceeding 500,000 for our services. Our growth strategy involves establishing hubs housing sophisticated equipment like PET-CT or MRI alongside nearby branches offering basic imaging services like X-rays or ultrasounds. Smaller outposts focus on immediate clinical lab testing needs. This hub approach enables efficient management of investments. To address the scarcity of specialized doctors in remote areas, we use teleradiology and telemedicine. Specialized doctors in major cities extend their expertise to remote populations through these services.
EF: How does Grupo Proa navigate the challenges posed by the "iron triangle" of affordability, speed, and quality in the context of healthcare solutions?
CM: Mexico’s private healthcare providers must be price-conscious, given that out-of-pocket expenses constitute a significant portion of healthcare costs. Efficiency is key to offering affordable prices. We prioritize efficiency in our investments and establishing branches across most of Mexico. Additionally, we are introducing the brand Acceso Salud, which is aimed at serving the lower socioeconomic segment of the population. While this brand may not offer highly specialized genetic testing, it provides basic laboratory tests, offering immediate healthcare data for individuals in this demographic. Through a multi-brand approach, we aim to enhance accessibility to healthcare for a broader population.
EF: Taking your recent alliance with Examedi as an example, what criteria or qualities does Grupo Proa consider when seeking new partners?
CM: Over the past few years, our company’s growth has been substantial through M&As. However, partnerships, like the one with Examedi, represent a significant trend in the next 5 to 10 years. We are open to collaborations with partners that bring innovation, reputation, and agility, as we believe that bridging traditional strengths with digital advancements is the path to the growth of the health sector.
A recent article in the Harvard Business Review discussing the combination of physical and digital in healthcare used the term “phygital.” This concept highlights the synergy between startups, such as Examedi, with strong technology, speed, and innovative solutions, and established players like us, with physical capabilities, medical infrastructure, and brand recognition. Collaborating with startups allows us to tap into their technological speed, especially in focus areas like home care services, oncology, and genetics.
EF: In light of the evolving landscape in diagnostics, particularly post-COVID, how is Grupo Proa strategically exploring new fields, such as oncology and genetic testing?
CM: I have been with the company for two decades, witnessing various crises. The 1995 Peso crisis led to a 5% revenue drop, considered catastrophic then. However, March 2020 brought an unparalleled downturn, a 40% decrease for weeks. Concerns for the company's survival were intense until the surge in COVID testing provided a lifeline.
COVID test sales now constitute just 2%, yet we anticipated this shift. Our focus on diversification and robust physical presence, with 593 service centers -and growing-, ensured steady revenue amid evolving circumstances. Notably, our revenue grew consistently, defying trends observed in 90% of major diagnostic companies globally. This resilience is rooted in strategic investments, sustaining momentum year over year since the onset of the pandemic.
Our growth strategy extends beyond physical presence to include developing oncology and genetic panels and expanding into digital pathology, which is the future focal point for diagnostic companies.
We are entering an exciting phase with anticipated significant reductions in sequencing costs. A few years back, sequencing a person's DNA cost around $30,000, but now, depending on the scale and location, it is nearing $1,000, even less in certain U.S. regions. Our aim is the $100 threshold, making DNA testing widely accessible. We are actively investing in sequencing technology, venturing into digital pathology with artificial intelligence for enhanced precision and professional support. Additionally, we are delving into molecular imaging, investing in PET scanners to address the expanding field of oncology.
EF: How does Grupo Proa, specifically under its CHOPO brand, promote services, raise awareness about the significance of prevention, and encourage patients to undergo regular checkups?
CM: Prevention has always been considered the holy grail. Investing one dollar in prevention can save two dollars in future medical attention. Over the years, we have focused on specific panels designed for prevention and early-stage diagnosis of general diseases. Our checkup panels, consisting of basic blood and urine tests, offer a broad overview of one's health status. We have taken steps to educate medical professionals through our Continuous Education division, ensuring that doctors are well-versed in the latest diagnostic technologies.
To extend our reach, we have started an education program for the general population through webinars. Initially launched during the COVID lockdowns, these webinars covered topics like virus care and prevention. Surprisingly, when we expanded to include discussions on breast cancer and diabetes prevention, we saw an impressive turnout, revealing a significant interest in health information among the public. Recognizing this, we have embraced partnerships, such as the one with Google, to create blogs and materials for web consumption, focusing on disease prevention. Through specific search engine optimization programs, we are making this information easily accessible to those actively seeking it.
EF: Why is a dollar invested in Mexico more valuable than invested elsewhere?
CM: There is a large population in Mexico, and while the country used to be considered youthful, the average age has increased, likely ranging from 25 to 30. As the population matures, healthcare needs will grow significantly. Challenges persist in the public sector's ability to provide healthcare, creating opportunities for private services. Efficiency, quality, and broad accessibility, both geographically and economically, will be crucial in tapping into this expansive market.
Mexico's proximity to the U.S. is strategic for various reasons, including trust-building and attracting investments. The aging U.S. population has led to an influx of individuals seeking healthcare services in Mexico. Regions like Tijuana, Guadalajara, and San Miguel de Allende, known for attracting "snowbirds" escaping northern winters, witness a growing interest in healthcare investments. Furthermore, major cities like Mexico City, Guadalajara, and Monterrey boast significant universities and hospitals, some of which are accredited by the Joint Commission. Even medium-sized towns offer medical services and educational institutions for aspiring healthcare professionals, contributing to the shaping of a pool of skilled professionals that adds to making Mexico an attractive destination for healthcare investments.
EF: Hypothetical: As a future Minister of Health, where would you start to enhance healthcare in Mexico?
CM: Serving as the health minister is indeed a challenging responsibility. The foremost concern revolves around resource management. If I were in that role, my top priority would be negotiating increased funding for healthcare. In this matter, collaboration with the private sector is crucial. The recent pension reform demonstrated the private sector's commitment to contributing more resources. With a well-structured proposal focusing on employee well-being, transparency, and mutual goodwill, the corporate sector could potentially allocate additional resources for health.
Securing sufficient funding remains a persistent challenge due to the extensive healthcare needs in the country. Therefore, maximizing efficiency with available funds is imperative. This involves optimizing the distribution of medicines across the nation and upgrading technology in public hospitals. The wide network of public hospitals needs substantial improvements. Strengthening public hospitals at the community level is essential to ensure that basic medical services and check-ups are accessible to everyone, preventing the shift towards privatized healthcare in local clinics and drugstores.
EF: What final message would you like us to convey to our readers?
CM: This is an exciting period for healthcare. The merging of the digital and physical healthcare realms presents many opportunities. We should focus on speed and a shared vision among our people, healthcare professionals, and executives. Leveraging our human resources capabilities is crucial to seize this opportunity.
Additionally, we should capitalize on the demographic bonus. We must prepare for the future as our country ages. Strengthening our capabilities benefits our population and positions us as a hub of innovation, offering neighboring countries high-quality healthcare at affordable costs. To make this a reality, we must uphold stringent quality standards and ensure safety measures are in place. The opportunity is ripe, and we are well-prepared to embrace it.
