KEY POINTS:
Alan Clarke didn't set out to be a business troubleshooter but he has spent most of his professional life turning companies around or reinventing them.
The former geologist is now managing director of medical services company Abano Healthcare, formerly Eldercare.
The company not only has a new name,
it is unrecognisable from when Clarke took it over in 2000.
He has transformed retirement home business Eldercare into a nationwide healthcare enterprise - raising annual revenues from $18 million in 2000 to a forecast $85 million this year.
"I think the growth of private health delivery is strong in New Zealand and really mirrors all OECD countries," says Clarke.
He believes the catalyst for growth is that the Government is finding it hard to keep up with the demand for healthcare resources, due in part to the ageing population and the range of extended medical services now available.
"The demand for healthcare and medical services is growing four times the rate of GDP - so you end up with Government really struggling to meet demand," says Clarke.
"Around 1.3 million New Zealanders now have private health insurance with 100 new people signing up every week. This is happening in an environment where private health insurance is not encouraged due to our tax structure.
"If employers offer private health insurance to their staff then they will be stung with fringe benefit tax. That is a disincentive to do it. In other regimes premiums for health insurance are tax deductible and there is active encouragement to provide it.
"But even in our environment we are seeing a strong growth in private healthcare because people are just becoming frustrated at these waiting lists for public sector care."
We are in prosperous times, with low unemployment, and many people are able to pay for private healthcare. Is Clarke concerned by the prospect of an economic downturn?
"I think the healthcare and medical services market is not as vulnerable to economic fluctuations as much as the retail consumer market," he says. "Is going to the dentist or audiologist on the same level as buying a flat-screen TV?
"In my experience the healthcare sector has immunity to economic cycles. And while there is a positive economic boom that helps all sectors of the economy, perhaps people do - in that environment - elect to have extended health services on a private basis.
"Our business is based on supplying core services that are funded through a District Health Board contract in Wellington - which is Government funded - to dental, which is privately funded, with other services that are funded in part by public and private money.
"So while our focus is on the private funded area, we do carry some ACC [Accident Compensation Corporation] and DHB contracts that are not subject to economic fluctuations."
However, Clarke says he sees the future of the company squarely in the private sector of the healthcare market.
His first job couldn't have been more removed from the healthcare industry if he had tried. After graduating with a BSc in geology at Otago University, he joined Amoco Minerals in Western Australia as an exploration geologist.
By 1979 he had returned to New Zealand with the company searching for silver and gold. While his time with Amoco lasted just three years, most of the organisations he has worked with since have enjoyed his Midas touch.
He was headhunted in 1983 to help save NZ Co-operative Wool Marketing, a company with an 88-year history that was finding it difficult to survive a changing international landscape.
"It was my first opportunity to be a chief executive to a board that was a traditional farm-based business."
But that first job, as a chief executive, was a turning point for Clarke's career. Before the co-operative was merged with Mair Astley in 1986, he returned the business to profit and sold one of its processing plants to the Chinese Government.
"It was the first Chinese investment in New Zealand."
The 80s provided Clarke with plenty of challenges and opportunities. The economic environment was changing fast with the currency being floated in 1985, deregulation came and restrictions on banking were lifted. The country had been brought out of the Dark Ages and was changing fast.
"It was a very interesting time," says Clarke. "And I well remember the call rate rising - we were absolutely in line with South America for a few weeks as there was a shortage of money while the banks sorted themselves out."
Clarke says there was an enormous amount of growth going on with start-ups and new floats rising on the back of the deregulated economy.
"It was an entrepreneurial and exciting time and I hit that environment as a new MBA graduate. "A lot of the traditional business models that had worked well until deregulation were disintegrating. A whole new way of looking at business opportunities was emerging."
After his work with the farmer co-operative, Clarke moved to head Industrial Group. As CEO looking after three engineering firms, he turned the organisation on its head by closing two of the firms and selling the third to a foreign buyer.
"I didn't set out to be a fixer of companies," he says. "I think it's a function of being in business in the 80s."
His first taste of working in a medical environment was when he joined SGS Group, which offered pathology and radiology services. He joined the firm in 1990 as chief executive of SGS's newly acquired Medlab.
Three years later he was appointed national chief executive for SGS New Zealand and went on to organise the sale of parts of the company to Sonic Healthcare. It was this experience that led to a tap on the shoulder in 2000 to take over Eldercare - a firm that owned nursing homes, resthomes and retirement villages.
"I could see there was an opportunity to take that business into the wider healthcare and medical services sector and so we changed the company name to Abano Group in 2003." A restructuring was already under way.
Clarke sold the company's residential care arm for more than $60 million and began acquiring and buying interests firms such as Geddes Dental, Bay Audiology and other medical service businesses such as Ascot Radiology. With a track record of spending just a few years with many of his previous companies, is Clarke on the verge of outstaying his welcome at Abano after seven years?
"I'm having a lot of fun where I am at the moment," he says. "It's great to be in a business that's growing and so I am happy where I am and with what I am doing."
Alan Clarke
* Age: 54.
* Family: Wife Margie and three children.
* Born: Johannesburg, South Africa (moved to New Zealand in 1960).
* Education: BSc (Hons) Geology and an MBA from Otago University.
* Position: Managing director, Abano Healthcare group.
* Interests: Spending time at home, wakeboarding, skiing, out on the boat.
