Keiichi Shibahara went from earning pocket money on wine arbitration to founding Japan’s most valuable hospice company, Amvis.

As an exchange student in the United States at the end of the 1990s, Keiichi Shibahara developed a taste for good wine and entrepreneurship. He made money by day trading currencies and stocks, as well as successfully arbitrating, seeding almost his entire $7,700 purse. Shibahara says he bought cases of Bordeaux at auction, drank a bottle or two, sent the rest to Japan and sold them at triple his cost. This turned his initial money into 200 million yen ($1.5 million) in about a year.

Back in Japan, he obtained a medical degree from the University of Nagoya, his hometown, and then a doctorate. in Molecular Biology at Kyoto University. He worked as a researcher in immunology and molecular biology at Kyoto University with his own research team and national research institutes, and dreamed of making a scientific breakthrough that would be written in textbooks.

Over time, Shibahara developed a different dream, a dream that tapped into his entrepreneurial instincts and medical training. He began to turn around financially weak hospitals and nursing facilities. And in 2013, at age 48, he launched a startup to build and run hospices, a largely underdeveloped field in Japan, despite its large elderly population. He named it Amvis, his contraction of “ambitious vision”.

“It sounds simplistic, but I realized that if there’s a demand, you can make a business out of it. And that was fun,” he says at the company’s spartan Tokyo headquarters, which has just a simple Amvis sign tacked to the wall in the reception area.

In 2019, when Amvis Holdings had established 20 facilities and proven itself in caring for chronically ill and terminally ill patients, it listed on the Tokyo Stock Exchange. Between the end of 2019 and 2021, its share price more than tripled, propelling Shibahara, which owns more than 70% of the capital, into the ranks of Japan’s self-made billionaires. Since August, his net worth has increased 35% to $1.35 billion. The largest shareholder after Shibahara is Los Angeles-based Capital Research and Management, which in February increased its stake to 7.8% from 6.6%. He declined to comment.

Shibahara says that when hospitals decided to increase the number of beds to treat Covid-19 patients, they realized that Amvis could accommodate some of them. In Amvis’ 2025-2026 strategic plan released in late 2020, it aims to more than double its operating profit to 10 billion yen ($77 million) and the number of nursing homes, which are now mostly in major cities, to 100. (That’s compared with September 2021 numbers.) And the company wants to triple its revenue to 45 billion yen.

Amvis is expanding into smaller towns, where it can be the primary service provider and achieve high occupancy rates, Shibahara says. Tetsuya Nakagawa, chief financial officer, explains that since there are few differences in insurance reimbursements across Japan, lower labor costs in rural areas and small towns are driving profit margins higher. higher exploitation.

In this fiscal year to September, Amvis posted an operating profit margin of nearly 25% and a return on equity (ROE) of over 24%. That topped the profit margin by nearly 10% and ROE by about 17% at Tokyo-listed Japan Hospice Holdings, its main competitor, in the year to December, according to S&P Global Market Intelligence.

In a May research note, Daiwa Securities analyst Satoru Sekine launched Amvis coverage with an outperform rating and a price target of ¥5,000 over the next year, or around 20 % more than today. “Our recommendation is based on its unique position in the aged care market, clear prospects for opening new facilities and expected strong demand and its plans for expansion into other businesses,” Sekine wrote. For the year to September 2022, the Tokyo-based brokerage firm forecasts operating profit of 5.2 billion yen – slightly above Amvis’ estimate – and operating profit of 6. 8 billion yen the following year.

After 2026, the company plans to transform financially distressed hospitals and nursing homes – a venture Shibahara acquired a taste for by transforming such facilities in the years between completing his research work and starting up. Amvis in 2013. He used some of the proceeds from their sale as equity, plus loans secured by his bank deposits and own cash, to start Amvis, allowing him to own 100% of the business just before his quoting.

Demographic and societal changes in Japan underpin Amvis’ plans for long-term expansion. A growing number of elderly means an increase in mortality, despite Japan’s shrinking population. The nation now has the highest percentage of people aged 65 or over of any industrial economy at 29%, according to the OECD. Annual deaths are expected to peak in 2040 at 1.7 million, up from 1.4 million currently, according to Japan’s health ministry. The number of people dying in hospitals and at home is falling, with more elderly people dying in nursing homes.

And the number of people saying they would forego treatment, if they were terminally ill, other than palliative care, is increasing. The country faces a shortage of doctors, especially in rural areas, and of places where these patients can spend their last days. The latter has led some to stay in hospitals, even if they don’t need such extensive care – a choice that raises healthcare costs and places a greater strain on already overstretched medical staff.

“Japan does not take enough care of those preparing to leave the world,” says Dr Yoshiaki Mizuguchi, a visiting physician at an Amvis hospice in central Tokyo. “The priority is on remedies through surgery and pharmacological treatments. Most of the money goes there, leaving little for those who die. In Mizuguchi’s view, “we need to be nicer and fully support them. That’s why I left [oncological] surgery to be a doctor at home, to be closer to those who do not receive the necessary attention.”

“Japan does not take enough care of those preparing to leave the world. Priority is given to remedies through surgery and pharmacological treatments. Most of the money goes there, leaving little for those who die.

To contain costs, Amvis uses traveling doctors such as Mizuguchi to monitor patients one to three times a week, depending on their condition, rather than onsite doctors. Shibahara realized this was possible while working part-time as an on-call doctor at a rural hospital. At Amvis, nurses and senior care specialists provide care at a higher than required staff-to-patient ratio of 1:1. The government’s health and aged care insurance provides 90% of Amvis’ income and the rest comes from out-of-pocket patient fees for residential stays, which can cost up to ¥200,000 per month. (Daiwa’s Sekine notes that this heavy reliance on insurance was a risk for Amvis, as Japan could make changes to reimbursement policies during systemic reviews.)

Another way Amvis reduces overhead is a flat management structure, where the head office directly manages the facilities. “Four or five years ago, we had regional managers and managers of administrative establishments. But we got rid of them. After that, information and decision-making moved faster,” says Shibahara, noting that the cut increased operating profit margins by two percentage points.

Other benefits of this lean structure are staff satisfaction and empowerment, especially at a time when Japan is facing a severe shortage of nurses and hospitals are struggling to retain them. “I can respond quickly to requests and needs from patients and their relatives,” says Minako Yasuda, who oversees a 40-patient facility in Tokyo that looks more like a hotel, with carpeted floors and veneer walls. wood, than to a hospital. “Before, as the head nurse of a hospital, even though I wanted to change things, they were stuck in middle management. As a nurse, responding to patients’ needs makes my job really enjoyable,” she says.

Shibahara has goals for the company and for himself. For Amvis, he wants expansion, greater liquidity for his shares and funds for growth – and an upgrade to his public listing on the Tokyo Stock Exchange’s premier first market.

For him, while he has long since given up on his dream of making a scientific breakthrough, he harbors the hope of funding future scientists and their research. In 2020, Shibahara created a foundation in his name and eventually aims to turn it into something like the Howard Hughes Medical Institute, which has $27 billion in assets. Supporting a research institution or a college is another dream. “Of course, it depends on my ability to build up the necessary wealth,” he says. Supporting someone who is having a breakthrough “would really make me happy.” And with around 500 bottles of Bordeaux, including three bottles of the mythical Cheval Blanc 1947, he has another objective: to finish them off.