A family-run, single doctor diagnostic lab has grown into an internationally accredited global company that is raising the standard of diagnostic care in Egypt and the other countries it operates in. IDH CEO Dr. Hend El Sherbini discusses scaling up a family business, IDH’s rapid expansion, the company’s IPO in 2015, and how she views the future of the Egyptian healthcare sector lying in increased investment in preventative care
Your mother started the business as one lab in 1979 and it has grown into more than 400 labs that served around 6.5 million patients last year. What is the company’s growth story and how have you been driving it since you came onboard in 2004?
We started as a family business. Our first lab specialized in immunology and new techniques in diagnostic testing. My mother started IHD as a small family business, a one-doctor lab. She wanted to offer high-calibre immunology and diagnostic testing to the Egyptian market in an easy and accessible way. I came back to work in the lab after completing my medical studies overseas. When I joined, I wanted to scale the company up and make it a permanent institution. I wanted to expand our services across Egypt, so that our patients don’t have to travel to Cairo. Back then, there was not a lot of testing done in Egypt; most samples were sent abroad because people didn’t trust Egyptian tests. But testing abroad is expensive and slow. I wanted to change that through IDH. So we moved our testing in-house and focused on international accreditation, achieving gold standard levels of accreditation. We are the only lab in Egypt accredited by the College of American Pathologists and the International Organization for Standardization (ISO). We started adding new units to accommodate the now 1,400 tests we do in-house. We’ve brought doctors and professors in-house to guarantee our level of quality. We opened branches across the country. We have more than 400 sites across the country. Good diagnostic testing is critical to healthcare delivery because 70% of diagnosing any disease is based on lab tests.
Your company has expanded greatly both in its offering and in geographical terms, recently entering Nigeria, for example. What is IDH’s strategy for entering new markets?
Before Nigeria, we entered Jordan and Sudan. We always look at the countries where there is strong demand but low supply, either because labs don’t exist, or the labs that do exist are low quality. Nigeria is the largest country in Africa. The quality of the diagnostic services are quite low, patients pay out of pocket for services, and many of those who can afford it travel abroad for testing. It’s a market reminiscent of Egypt in the early 1970s. We entered Nigeria, working with partners on the ground to revamp facilities, order new machines and train people. We’re working with quality international suppliers such as Siemens.
Can you comment on the general state of the healthcare sector in Egypt? How is IDH modeling a gold standard for the medical sector?
The medical sector in Egypt is very segmented. There are discrete healthcare segments in the government, university, military and private sectors. We are trying to raise the bar in terms of quality. Patients drive the market in terms of quality. They pay, and choose their service providers based on where they receive the best care, like any other service. It is primarily consumer driven in terms of ensuring quality, as the government is not pushing other companies to get accredited. Accreditation is expensive, but I believe it is essential to ensuring high-quality and safe healthcare.
Can you describe IDH’s partnership with Siemens and other opportunities for partnership with German companies?
Siemens is an industry leader and one of the key players in diagnostics; we’ve been working with them for a long time. They’re a provider for our machines and machine maintenance. Siemens bought out companies we worked with prior to Siemens, including Bayer. They are dependable partners in this business. We work with their teams here in Egypt, in their Dubai regional hub and at their headquarters in Germany. It’s been a successful partnership. We can’t provide the services without proper teamwork and partnerships, and we’re always open to partnerships with counterparts from Germany and elsewhere.
You led your company to an IPO on the London Stock Exchange (the first Egyptian healthcare company to do so) that set its value at $668 million. How has that move impacted the company and what is your message for potential German investors to purchase IDH shares?
We launched the IPO in 2015. Since then, we’ve had a large number of international investors, who typically invest in a broad spectrum of regions and sectors. They add a lot of value in that we benefit from their experience and knowledge across that spectrum, and we also like to educate our investor base about Egypt and the sector here.
You predicted that for IDH and for healthcare, 2019 is going to be a year of consolidation to bring down costs. How is that playing out and what moves is IDH making to make your tests more cost efficient?
In order to make the healthcare sector most cost effective in the broad sense, we need to invest in and create a culture shift toward preventative medicine. Chronic illness is very expensive, for the patient, and the health system. Raising awareness is a critical part of that, and IDH is playing its part. The government launched a campaign in 2018 to encourage more testing, particularly for Hepatitis C and diabetes, and our labs tested many patients across the country as part of this initiative. It will take time for the mentality to shift and to get people educated about the importance of managing their own health. However, I think we are headed in the right direction. With government involvement, the potential for impact and transformational change is greater. Prevention will save us a lot of money later on. To this end, we also run awareness campaigns in addition to the government initiative, on a company level. Each month we highlight a different disease and try to raise awareness through social media campaigns, giving out educational material and educating physicians and insurance companies, who may not know about the new tests available. We do the same with insurance companies.
What are some of the challenges in educating about health awareness in Egypt?
It takes time and you need to keep doing it and insist on its importance. You also need to keep it affordable, so people can do testing and do it frequently. It needs to be accessible and cost effective for people to do it. Our country has faced a lot of price inflation, so people are cost sensitive.
You are one of a handful of female CEOs in Africa and are widely considered one of the most important women in Egypt. What does it mean to you to be a woman in this male-dominated industry?
Although male dominated, I think being a woman is a major advantage in this field. Women are sensitive; we have a good bedside manner with patients and are able to build trust. We are team players, and this industry is built on teamwork. The problem though, is that women have not had the same opportunities as men in our region, and there are not as many women in the field and leading the field as there should be. However, given the chance and the self-belief, we really do shine.
What is your final message to Die Welt readers about IDH as a partner and potential investment?
We are an ideal company to invest in. We’re growing fast, at a rate of over 20%, we have served more than 7 million patients, we have professionally trained staff, a presence in multiple countries, and a successful track record of 40 years. We are listed on the London Stock Exchange, which inspires confidence, and we are headquartered in a country with a population of 100 million people. Most of the country is made of young educated people, in a stable climate. Our economy is picking up, and the government is keen to facilitate economic growth, business growth, and support for investors. IDH is competitive in comparison to diagnostic centers anywhere in the world, and Egypt is a great bet to invest in.