Banking on health

Published 29 November 2012 05:16, Updated 29 November 2012 06:54

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Banking on health

Healthy outlook: Banker turned medical services chain founder and CEO Mariano Frias Photo: Jesse Marlow

For a banker from Argentina, starting a healthcare service in Melbourne does not seem like an obvious transition. But for Era Health chief executive and co-founder Mariano Frias, the leap has been a huge success.

Sitting at number 86 on the 2012 BRW Fast 100, Era Health’s growth points to a trend to build business plans for healthcare services, as you would for any other industry.

Where medical professionals can be risk averse, often for good reason, Frias’ experience in the banking sector explains why Era Health began with a long-term plan for investment and national expansion.

The company differs from the crowd of small medical practices that provide only a limited range of care, as it offers dental, physiotherapy, psychology, podiatry and dietetics services along with a general medical practice and tailored offerings to corporates.

Yet the development of Era Health wasn’t all plain sailing. The business was co-founded by Frias and John Gall, a medical professional with many years of industry experience. Gall had founded Southern Medical Services as a small clinic in Melbourne’s CBD that provided limited occupational and corporate health services.

The clinic as it stood was “unable to effectively compete” with larger occupational healthcare providers in the area, Frias says. Frias’ corporate background was thus the missing piece to the expansion puzzle.

A chance meeting between himself and Gall lead to the development of the Era Health business model and an opportunity both founders were looking for.

Frias says the partnership required a leap of faith but it is now grounded in trust. “We don’t have anything in common and that’s what makes us work,” says Frias.

The new business plan meant changing premises to a much larger space and creating demand for the entire range of services on offer at Era Health. Frias’s strategy was to brand Era Health as a one-stop health shop, with many services under one roof, delivered by professionals each working from the same client file.

The holistic formula has caught on with corporate clients in particular, 800 of whom are now serviced across the country.

With expansion came the difficulty of finding staff, something Frias says is one of the biggest challenges Era Health will face as there is a shortage of doctors and physiotherapists in Australia.

“Part of our solution has been to provide health professionals with good surroundings, state-of-the-art equipment and generally excellent facilities,” says Frias.

Human resources are particularly important where Era Health aims to provide a point of difference to clients between the company and its larger competitors.

For Frias, this point of difference lies in the delivery of personalised services that are responsive to a client’s needs and excellent professional-client communication.

Frias has learnt the hard way that hiring staff who did not align to this philosophy can quickly harm the Era Health brand.

In one situation client feedback revealed and unhappiness with service which caused a downturn in the business and damage to the brand name, he says, something that took significant time to repair. In hindsight, Frias says it is better to be understaffed than to have staff operating at odds with the Era Health philosophy.

Increased growth has also intensified the need to attract capital. Several years after establishing Era Health, Frias faced the reality that in a post financial-crisis economy, the banks were less willing to lend.

“The business was not expanding as fast as we had hoped but we had significant overheads,” Frias says.

Frias and Gall were forced to inject their own funds into the business, with Frias citing limited capital for investment as one of the main barriers to the further growth of Era Health.

At present, three Era Health clinics operate in and around Melbourne, including at the original CBD headquarters and Tullamarine and Melbourne airport clinics.

The established network of associated small, privately owned clinics across Australia “provides the national footprint envisaged in our initial business plan”, Frias says, without the intensive investment that Era Health cannot yet afford.

This more restricted growth strategy has paid off, with an average annual growth rate of 44.13 per cent in the three years to 2011-12.

Although Frias and Gall have already received an offer to buy the company, they are keen to oversee continued growth before handing over the reins.

The idea is to grow without destroying the level of service that differentiates Era Health from its competitors, no matter how big it becomes.

“Client satisfaction is still number one,” Frias says.

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