Brian Lewis/The Gazette “I like the idea of being a pioneer, of being involved with a small group of people doing an amazing thing,” says Lawrence Pemble, COO of Chindex International.

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As China increasingly offers a more friendly regulatory environment for foreign health care businesses, Lawrence Pemble and his company have long had a foot in the door.

Pemble, 55, one of the original partners of Chindex International, has shifted into the role of COO after almost 16 years as CFO. The move is in preparation for the Bethesda company’s plans to quadruple the size of its Chinese health care network in the next three to four years.

Chindex was launched in New York soon after the U.S. reopened diplomatic relations with China in the early 1980s. Its initial mission was to distribute U.S. medical devices to China, but it soon expanded to offering heath care services and inpatient hospital care in the 1990s, when it moved to Maryland. In 2010, Chindex signed a joint venture with Shanghai Fosun Pharmaceutical to spin off its medical devices business into Chindex Medical Ltd.

“The recent evolution of our management structure reflects the growth of our company,” said Pemble, who also is CFO of Chindex Medical. “As we get larger and more formalized, we need more institutionalized roles.”

Pemble, who has long managed the company’s finances from the U.S. while his two partners live in China, said he informally has held an operations role for some time. Pemble also visits China frequently.

Being with Chindex challenged him to achieve something never done before: bringing U.S. health care to China.

“I like the idea of being a pioneer, of being involved with a small group of people doing an amazing thing,” he said.

Pemble, who grew up in New York and graduated from the State University of New York at Albany, said he came to Chindex after having been fascinated for years with the Chinese language and culture. He also managed San Francisco’s China Books and Periodicals’ East Coast center in New York.

He and the other partners, who also fancied China, were able to use that interest to break into the market at a time when for-profit health care there seemed unusual for a socialist area, Pemble said.

Chindex opened the first internationally institutionalized hospital in China, Beijing United Hospital, in 1997. Chindex’s United Family Healthcare network now operates hospitals and satellite clinics in four Chinese cities. Its newest hospital opened in Tianjin last year.

Chindex reported $2 million in profit for the nine months ended Sept. 30, its last available filing with the U.S. Securities and Exchange Commission. This was down from $4.6 million in the prior-year period, although the more recent report no longer reflects revenues from Chindex’s medical device subsidiary. Revenues also fell to $82.5 million from $127.9 million in the same period in 2010.

The company’s medical device business had long given investors second thoughts, as they preferred the growth and profitability potential of the hospital business, said Judy Zakreski, vice president of U.S. operations for Chindex Medical.

She praised Pemble’s role in helping negotiate the joint venture with Fosun, saying he was instrumental in putting it together in a way that made sense.

“At the end of the process, we came out much stronger,” Zakreski said. “He empowers his team to do what needs to be done without undue interference. High performers will respond to that.”

Chindex has 1,300 employees, including 15 in Maryland.

“Doing business in China is not easy. We’ve been able to survive when others have not,” Pemble said, as Chindex faced all the first-time issues of figuring out how to make things happen there.

Pemble recalls entering the country in his early 20s and realizing that “China needed and wanted everything.”

“We had endless energy, which was sufficient to move the business, and we picked up health care sophistication along the way,” he said.

Although China is not a nation that easily assimilates other cultures and tends to view U.S. companies as foreigners, Pemble said, he sees Chindex as cross-cultural, having learned how to work with regulations there. Chindex reports in U.S. dollars, which run a frequent risk of inflation in China, whereas the yen is appreciating, he said. Chinese labor laws also have made labor increasingly expensive, adding to operating costs, Pemble said.

“The idea that there’s a huge cheap labor pool in China is outdated,” he said.

There also is the challenge of ethically dealing with Chinese officials who want sweeteners for their project approvals, Pemble said.

Chindex required more than 170 approvals to open its first facility.

“Somewhere along the line, other people stumble and can’t open doors. We’ve simply never accepted that as a reason to turn from our mission,” Pemble said.

Robert Goodwin, interim dean of the graduate school at the University of Maryland University College in Adelphi, praised Pemble, particularly on his work with the Chinese government.

“He understands where people are coming from, what they’re capable of and what constraints they face,” he said. Goodwin is a former executive vice president and in-house legal counsel for Chindex.

“He has a tremendous amount of in-depth experience,” Goodwin said. “Whereas others translate U.S. experiences into China, he understands the culture.”

Goodwin also called Pemble someone who generates trust.

Chindex also had to navigate the tumultuous relationship between the U.S. investment community and China, which has experienced the same ups and downs of the nations’ general relationship over the years.

“We’re the guys to go to,” Pemble said, adding that Chindex officials have long been active in the bilateral trade arena and its CEO met with Vice President Joseph Biden on his recent trip to China.

Now, Chindex may have to deal with more competition, as the authoritative Chinese government initiates health care reform and brings down several regulatory barriers, Pemble said. But he said Chindex remains the only experienced foreign company when it comes to rolling out new facilities, which can be very time-consuming.

“The demand size is huge. We target the top 3 to 5 percent in the top 15 Chinese cities,” Pemble said. “We’re the only one that does inpatient hospital care. The competition is mainly from clinics in China and Asian-based investment.”

He also said he hopes more competition means more venture capital available for foreign-invested private hospitals.

“We want to grow our United family health care network as quickly as possible,” Pemble said. “We’re far ahead of the competition and want to stay there.”

He said China offers much potential over the next few years and that Chindex also is looking to grow the new medical device business through Fosun’s acquisitions.

Lawrence Pemble

Age: 55.

Position: COO, Chindex Internation, a Bethesda company providing health care services in China through the operations of United Family Healthcare; CFO, Chindex Medical Ltd.

Previous position: CFO, Chindex International.

Education: Master’s in business, University of Michigan; bachelor’s in business and accounting, University of Phoenix; bachelor’s in Chinese studies and linguistics, State University of New York at Albany; bachelor’s in modern Chinese literature, Liaoning (China) University.

Residence: Lexington, Ky.

Family: Wife, Julie Huber; two children.

Hobbies: Bicycling, skiing and distance running (competed in Beijing marathon in October). Also enjoys visiting China, where he can spend time with his Chindex “family.”

lrobbins@gazette.net