EPISODE 81: THOMAS GIBSON, CEO & CO-FOUNDER AT MEDGLOBAL GROUP

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Episode's transcript

Julio Martínez-Clark: (00:00)
Welcome to the LATAM Medtech Leaders podcast, a conversation with leaders who have succeeded or plan to succeed in Latin America. Please subscribe to your favorite podcasting platform. Apple Podcast, Spotify, Google Podcast, Amazon Music, et cetera. Today our guest is Thomas Gibson. Thomas or Tom is the co-founder and Chief Executive Officer at Med Global Group, a marketplace for the medical device industry with a special focus on Latin America. Thomas has 22 years of experience as an executive for healthcare and hospital organizations in the United States and now lives in Mexico. So, Tom, it's great to have you here today. Thank you for joining us.

Thomas Gibson: (01:04)
Well, thank you very much. And Julio, it's a pleasure to be on your podcast and, just to be involved in the Latin American market really appreciate what you're doing, to let people know how, you know, how amazing this market is

Julio Martínez-Clark: (01:19)
Beautiful. Beautiful. I like, I love that introduction. I'm enthusiastic. All right. Uh, Tom, let's get started. Uh, talking about your journey. I mean, how is it that you got involved, uh, with what you're doing today in Mexico?

Thomas Gibson: (01:35)
Well, um, I've always had this dream that I, that I wanted to live abroad and learn new cultures and work abroad. And one day, I met my wife who happened to be Mexican, and we were diving in Cancun. And, um, you know, everything just kind of happened from there. And, uh, we decided that you know, since that was my dream or one of my passions to live abroad, I said, Well, you know what, Here's a good chance to do that. And we did it. And we moved down here and started a medical equipment company, and next thing you know, things changed. The environment changed. We saw many opportunities here, and we have taken them. And that's how we became Med Global Group.

Julio Martínez-Clark: (02:18)
Very good, very good. so let's talk a little bit about your past. What is it that you did back in the US when you were actively working in healthcare and hospital organizations?

Thomas Gibson: (02:29)
See, so my main role was working more on the operations side. So I worked on facilities and hospital constructions. I oversaw clinical engineering, um, staffing and, and regulatory, um, concerns with the hospital, joint commissions and, and things like that and I always had a passion for construction, installing medical equipment, deins installing it. And then part of what I really, really strive for was finding a home for the equipment that was de-installed from the hospitals that I worked at. Because, you know, we all know, that equipment still has many, many active years of life left in it. It just doesn't meet the needs of that particular facility. And so that, that was always my, always stayed in the back of my mind like that, that someday I, I needed to find a way to help solve these problems and improve these issues.

Julio Martínez-Clark: (03:29)
So that's a genesis of what you're doing today, actually.

Thomas Gibson: (03:34)
That is, yes. And what we're doing today literally started at our kitchen tabletop, you know, between my wife and my wife was my partner, believe it or not. So we work together and we're our business partners, and I, I love every moment of It.

Julio Martínez-Clark: (03:48)
Very good. All right, so let's talk about trends in Latin America. That's usually a question that I ask my guests because there are many things, there are many wins in Latin America today, and, uh, there's always an interesting conversation about, uh, what people see as trends and, uh, lots of time. Uh, you tell me about trends that I've never seen. So it's great to interact about talking about trends. So what trends, economic, political, and social do you see happening in Latin America that are relevant for medical equipment or medical device business?

Thomas Gibson: (04:23)
Sure. So I think what's really important that we have to understand, like where Latin America stands in the healthcare marketplace, and not many people understand, um, exactly like what's going on in Latin America. And, and especially in detail. You know, one of the things we should understand is that globally, there are a hundred thousand hospitals and a quarter of them are in the US. A quarter of them are in China, a quarter of our spread between Europe and Africa. But a quarter of them sit in Latin America. And that, and that equates to about 20,000 hospitals. You know, it's not quite a quarter, but 1.56 million beds. That's a lot of beds. You know, we have 52,000 operating rooms, we have 20,000 delivery rooms. And when people think of Latin America, I don't think they actually think of those numbers. You know, they really don't think, But what, what the difference is in Latin America is that even though we have this quantity of hospitals and clinics that support the healthcare system, there are one, uh, one-third fewer beds in the hospitals, and there's a fraction of specialty services that are available around the world. So that's one of the challenges that we work at. The average hospital bedside in Latin America is 56 beds while the average hospital size in the United States is 162. So there's quite a difference here. Chile is an exception to the rule. Chile has advanced much, much farther in healthcare. Um, but we are seeing that the size of hospitals directly affects their ability to acquire proper capital resources. Those capital resources include equipment and human capital. Um, you know, Latin America, even though these statistics don't sound so great, Latin America is actually above the average for the OECD on medical equipment. But there's still way behind the rest of the world. And there are many reasons that happen. Now, when we talk about trends, I think I'm gonna talk in a different way if it's okay with you from more of like the challenges that are happening in Latin America, and then that creates the opportunities for the other parts of the world to actually support Latin America. I think it's very important for us in this. So, you know, even though Latin America is an emerging market, and out of the 10, uh, emerging markets in the world, Latin America holds four positions. Okay? So Mexico is, uh, Brazil, Mexico, Colombia, your home country, and Argentina. So those are among the top 10 of the emerging markets in Latin America. But the problem is despite these positive statistics that we see, hospitals do not have the capability to develop centers that have expertise, and treatment. And there are many reasons that that happens. So most of your hospitals in Latin America focus only on primary treatment, which means that many patients are unable to get specialty treatments here. And that happens, number one because hospitals in Latin America don't have leverage capabilities. Um, the average will just speak for Mexico itself. In Mexico, the average public hospital has a hundred beds, but the average private hospital has 15 to 20 beds. So with that kind of patient output, they don't have leverage in the industry to buy proper equipment. That's one problem because an average patient stays maybe three days, so only one-third of their patients are turning over. But also the hospitals do not have the infrastructure to, uh, the infrastructure to actually support the more modern technological equipment. So that, so that's a big problem here.

Julio Martínez-Clark: (08:31)
And they usually start houses, in a house, 5 beds, 10 beds, then they buy their house next door, another 10 minutes.

Thomas Gibson: (08:41)
Latin America, you know, is quite different because we have very, very dense urban areas. But then we have vast rural areas that are still challenged in trying to give healthcare. Another problem that is atten, that's, um, contributing to the trends is the pandemic, which has negatively affected hospital budgets and throughputs. So hospitals are just realizing now that they thought they may have had adequate, adequate equipment to attend to surges, to hospital care, but they're real, real realizing they don't now. Another reason, as I said before, is that the majority of hospitals in Latin America are in rural areas, well, there are no salespeople visiting these hospitals on a regular basis to sell them proper medical equipment. Um, you know that 60% of, uh, 60% of the region is managed by public healthcare and 60%, which equates about 80% of the market, hospital ex, even for, even for the public healthcare system, hospital expenditures were redirected and they were put to other resources to, to attend to the crisis. Even public healthcare is going to have to find very creative ways to start purchasing medical equipment over the next few years. And all of these challenges that are in Latin America are actually creating opportunities for other parts of the world because they're re-installing equipment or there are manufacturers in different parts of the world that are manufacturing less expensive equipment that takes less technology to operate, but can provide better patient care. Does that make sense to you?

Julio Martínez-Clark: (10:34)
Yeah, yeah, it makes sense.

Thomas Gibson: (10:35)
So these problems can be very, very easily solved if we just create these synergies or a way to connect this equipment that's on the market, whether it's new or used. And they used medical equipment, marked as a $32 billion business. And a lot of times this medical equipment that's not reached the end user because there's just not a way to get it there. There's no way to connect buyers and sellers together. And there's no way to help facilitate the logistics or help facilitate the regulatory concerns that are needed to get that, uh, medical equipment landed and installed.

Julio Martínez-Clark: (11:15)
However, there are laws in some countries that prevent the use of medical equipment.

Thomas Gibson: (11:20)
They're actually in the industry. New medical equipment is heavily regulated, but used medical equipment, they allows more opportunities to move it around. So for me, for Mexico, for instance, you don't need cos, which is similar to the FDA in the US to bring used medical equipment in.

Julio Martínez-Clark: (11:41)
Oh, really?

Thomas Gibson: (11:42)
But you also wanna make sure that quality equipment is being delivered, and that you can support it with future parts. So that's how we're filling some of the gaps. We can facilitate the connections to get the right equipment to the right places but also support it with a parting system so that they can maintain the system long-term.

Julio Martínez-Clark: (12:07)
Well, I have a comment about that, uh, Tom, um, in Columbia that is probably the country that I know the most for obvious reasons. I was born and raised in Colombia the law prevents older medical equipment from entering the country. And then the cutoff is two years. I mean, if it is older than two years, you are not gonna be able to bring it into the country. So, I guess the big manufacturers, the big ones probably lobby the government or something. I don't know what happened.

Thomas Gibson: (12:41)
Well, you know, um, Julio, what happens is that even for manufacturers too, cuz we work with manufacturers as well. Manufacturers at some point start producing new technology and that new technology may not be able to fit into the existing equipment they have. A lot of that equipment will go abandoned or will end up for parts. There's still an opportunity, like you say, in Colombia something two or three years old, there is still equipment on the market, two or three years old. And let's expand on that because we also work with products. So there are companies that may have pallets of products like gloves or gowns that are very useful for staff in the treatment of patients that may be closer to the expiration date but can be used by other countries. And any time that medical products and equipment go to waste, that means patients aren't being treated somewhere in this world. A patient's not getting something they can get to help them be healthier.

Julio Martínez-Clark: (13:48)
Yes, yes. Tom, you're breaking up an interesting point. And that's actually one of the top reasons why I started these podcasts because I realized that there is a huge gap, uh, innovation gap as I call it, um, between Latin America and the developed world, call it the US, Europe, Japan, um, where it will probably take about 10, 15 years before a product reaches Latin America after it is, uh, approved by the FDA, for example, or has a CE Mark approval. So it is really sad that patients do not have access to innovative medical technologies, whereas in other countries people have had it for 10, 15 years. So the podcast is a way to show, and well, before I go there, I mean, one of the reasons why this gap exists, I think is because companies are not really aware of the opportunities that Latin America offers. This vast region of over six hundred and 60 million people over 30 something countries, uh, big countries like, uh, Brazil, Mexico, Argentina, Colombia, Chile, you know, correctly named with great infrastructure, they're hungry for medical innovation and, and correct reimbursement is pretty much guarantee because in a lot of these countries, uh, healthcare is a constitutional right and, and government pays for, for anything pretty much. so anyway, my point is that, uh, the podcast is kind a grain of salt trying to, to, to help, uh, close the gap and so that medical innovation reaches the region faster.

Thomas Gibson: (15:28)
Exactly. And you mentioned the word technology. So technology has two sides to it. So it has an infrastructure and it has an equipment side to it, but if we can't deliver the technology, we can't deliver specialty services. And, and, and you know, quite honest, it that's within, from a global standpoint, that, that, that should be like high on their radar to be addressed because it looks like that we can easily address it. You know, it's just getting the right resources to the right places and understanding the market a little bit differently. You know, we're not gonna change rural hospitals and the rural people don't have the opportunity to go to urban areas to get treatment. And quite honestly, sometimes they don't have the proper insurance to get into the level of hospital they need to get into. So you know, this, even though we're talking about medical equipment and products and the problem that we have about getting them into the places that we need, but we're really, truly talking about patient care. That's, that's the bottom line here, that, you know, the physicians can't provide patient care if they don't have the right equipment and products. And we all witnessed that during the pandemic. So we should have learned by now.

Julio Martínez-Clark: (16:51)
Yes. Yeah. All right. Tom, let's talk about what you are doing today at Med Global Group. I mean, what is your marketplace about, uh, how does it work? Uh, what challenges you're facing right now?

Thomas Gibson: (17:07)
So, we began in 2015 and we started as a Latin-focused multi-sided platform serving the medical industry. So we all provide a marketplace or a foundation where sellers can list their product services and equipment and buyers can search and find what's in their budget or their needs or their technological needs. Um, and, and we have over, right now, we, we have over 20, no, we have over 12,000 products listed, but recently within the past year we just rebranded to an international company in multiple languages, multiple currencies. What we've learned over that time is that our clients were no longer Latin American clients, our clients were becoming American US clients or European clients, or Asian clients that wanted to move into the Latin market. So we've redeveloped our entire platform to meet that kind of demand so that we can be, we can not just focus on Latin America, but we can, we can actually connect somebody in the United States, manage the language barriers, manage the currency barriers, and still connect these two end users together. So we a buyer and seller together can hopefully find the right equipment in the right place and we also can facilitate the logistics for them as well. And in addition to that, we're now publishing a digital, fully interactive digital magazine for the health industry. Um, as you know, and what we're trying and all of that integrates with our platform. Um, one thing I didn't mention is that since we decided to rebrand, we also decided to be a development company.

Julio Martínez-Clark: (19:13)
Interesting. Okay.

Thomas Gibson: (19:15)
Yeah. So we are, we are a tech company actually now and, and we develop a lot of things and we're developing new things for the medical industry based upon their needs. And that has been an amazing journey for us over the last couple of months since we launched the new platform. Um, you know, we have had such amazing response, um, distributors from around the world and manufacturers from around the world are, are all contacting us now because they, they see that we're there, we're their connection between them and Latin America, but we just don't connect the user. We make sure we find out what all their needs are. So if they need somebody to help them with regulatory concerns, we can, we can connect them with that as well. So it's almost like a spoken hub type of a process where, where we just don't deal with just selling somebody. We wanna make sure that we can deliver quality equipment to practical places that can give better patient care. And, and that's our, that's our complete goal. And another thing that we even do is that if there are donations, of medical prospect equipment, we'll help facilitate that just to make sure, because anytime medical products or services go to waste, patients aren't being served. And that's very important to us.

Julio Martínez-Clark: (20:39)
And what countries in Latin America are the most popular for your searches or for your client searches?

Thomas Gibson: (20:47)
Sure. Um, so right now, Mexico, of course, is our headquarters. Um, and, and it, it's very, um, active for us. Um, Colombia comes in at number two. You'll be happy to hear that.

Julio Martínez-Clark: (21:01)
Yeah, Exactly. Yeah.

Thomas Gibson: (21:02)
Chile comes in at number three, Ecuador is number four, Brazil is up there at number five, and Argentina is six. So we, we literally, and then Central America is actually growing a lot, despite the challenges that are happening, Central America is actually coming up.

Julio Martínez-Clark: (21:19)
Interesting. Awesome. And so let's talk about challenges. What would you say are the top three challenges that you're facing in Mexico or elsewhere in Latin America with your business?

Thomas Gibson: (21:32)
Uh, you know, the top challenge I think there is obviously because the GDP has dropped significantly in Mexico, and remember that the majority of healthcare right now in Mexico is a public healthcare system that's funded by taxation dollars. And those taxation dollars aren't there anymore. So the challenges coming up, I believe that the public health care system, which typically only focuses on new equipment, is gonna have to be a little more creative now and find more economical ways to fill those voids so that they can, uh, meet the needs. Like in America, like in Colombia the average age or the mortality rate keeps dropping. So the average age of lifespan keeps rising, which means there's a greater need for healthcare. And that's the same thing in Latin America as in any place in the world. So somehow some way we have to find a way to get the equipment, the products, the services, the trust to build here. We have to get more manufacturers to come here and start producing. There are some manufacturers in Latin America. Um, I think one of those challenges is in the belief of our human resources, belief in our skill set. And, and, and that's so completely wrong because we're a tech company and we're here in Latin America and we're doing very well. And I feel that we have some of the best, best developers, designers, operators, um, in the system. In the system. And I just feel that the rest of the world may not understand that quite yet. And here I am, I am a, I'm a US citizen who's here and established here and see the opportunities and, and just to see that, you know, over time, that, that this area, Well, we all know that Latin America is probably the fastest emerging region of the world now.

Julio Martínez-Clark: (23:41)
Yeah, yeah. And it's also the most urbanized area in the world.

Thomas Gibson: (23:46)
Yes, yes. You know, we, we can eliminate some of these misnomers about Latin America and get people to understand that we're not just beaches and we're very high tech, you know, we are growing and emerging, as I said before, out of the top 10 emerging healthcare regions, Brazil, Mexico, Columbia, Argentina, that has to speak for something. And just look at how those countries are positioned. You know, we're not talking about a quad of countries. They're spread across from top to bottom of Latin America, and Chile is considered to be first-world healthcare. So, you know, things are changing here quickly. And I don't wanna inundate with statistics over and over again, but I have a lot of what I see. But what we are, the challenges, like you said, the, the challenges that we're really facing right now is specialty healthcare, radiotherapy, special treatments for cancer, um, special treatments for robotics, you know, but then, but then again, all of that goes back to infrastructure. So we can't deliver that technology until we can improve the infrastructure.

Julio Martínez-Clark: (25:10)
Well said. Excellent, Tom. Well, um, we're close to the end of the show, uh, Tom, and, uh, before we sign off, I mean, any final words of wisdom? Uh, in other words, what would you say to the CEO of a medical equipment, or medical technology company in the US that is just starting to look at Latin America as a place to do business? How would you summarize your main idea, your big idea?

Thomas Gibson: (25:38)
Well, you know, focus on, instead of taking your time and focus on studying healthcare in Latin America, start learning, you know, learn how the hospitals are growing and, and increasing. I mean, you know, I can see construction happening even in, in CDO here in Mexico and Central Mexico. They're just completing two private hospitals and we're not, We're, and we're no longer talking 15, 20 beds. We're talking hundred 50, 200-bed hospitals, private hospitals. And of course that's coming because of the Malia daughters or more, more factories manufacturing coming here equals more private health, uh, health insurance. But we need to fill, we need to fill this gap with specialty healthcare treatment. Um, this is probably the most important thing that we can do to help bring Latin America up to be equivalent to the rest of North America. And everyone recognizes that we play a significant part in our trade agreements between North America and Latin America. But we can do a much stronger part. Other countries are doing it here. China and Asia are setting up manufacturing here. This is, I predict in the next 10 to 12 years, we're going to see Latin America be a predominant, predominant player in the healthcare industry. Not only with delivering, you know, uh, healthcare treatment, but manufacturing products and services, um, building greater technology with the resources and the skills that we have here now. And, and I just see so much coming for, for this amazing region that we're in, that that, you know, constantly doesn't, doesn't get the credit that it, that it should get. And I'm sure you might agree with me on that,

Julio Martínez-Clark: (27:43)
No, totally, totally. I mean, that's giving, and I love your passion. I love your enthusiasm. I love how you have become a Latin American already and, I mean, you show it.

Thomas Gibson: (27:56)
Well, you know what, I don't, I don't think, I don't think healthcare is designated to a specific culture or our nationality. Healthcare is for everyone. Everyone should have an equal opportunity to get equal treatment around the world and not have to struggle to get that treatment. And that's the passion that I have. Really, that's my deep, deep vision is that we can make this so much easier to move equipment around. It's something that gets deinstalled in, you know, New York that we find hope for immediately, whether it's in Africa or it's in Asia, or wherever it has to be, But it ends up where it can do a lot of people. A lot of good.

Julio Martínez-Clark: (28:37)
Yeah. Yeah. I agree. All right, Tom, thank you so much for being in the show today. I really, really, uh, enjoy your, uh, comment. Your passion for Latin America is really contagious. Especially coming from you as a US citizen living in Kure to Mexico.

Thomas Gibson: (28:59)
Well, you learn a little bit, about Latin America. You're gonna, you're gonna, you're gonna see that that many people miss many, many, many amazing things that are here. And amazing people and extremely great universities that are just, just making things so much better. You know? Um, the pandemic slowed us down, but we're coming out of a pandemic and we're coming strong

Julio Martínez-Clark: (29:28)
Yes. Yeah, that's very true. I mean, a lot of the countries are growing very fast rate, faster than before the pandemic, actually. I'm sorry, what was that?

Thomas Gibson: (29:44)
No, I was gonna say that I would do every, you know, we will, we will do everything I can to promote and help foster the growth here.

Julio Martínez-Clark: (29:51)
Excellent. I love that. All right, Tom, Thank you so much. Bye.

Thomas Gibson: (29:54)
Okay, thank you. Bye-bye. It was great having you here.