Popular aesthetic clinic, Beverly Hills 6750, goes through two scandals, learns some hard lessons, and emerges a stronger brand and an even stronger company.
MANILA, The Philippines — Beverly Hills 6750 is a multi-specialty aesthetic center that offers cosmetic surgery and other beauty services. To Filipinos, it brings to mind the glitz and glamour of that opulent city in California where many Hollywood celebrities reside. Even the clinic’s location, at the 11th floor of the prestigious 6750 Ayala Avenue tower in the central business district of Makati City, implies the high life.
But behind the sheen lies a story first told in the shadows, then brought to light by the co-owners of the institute who wanted t save their business from scandal and ruin.
Medical tourism
“David could sell ice to an Eskimo. He was that good,” says Dr. Eduardo Santos of his former boss. “It had something to do with his personality: he was very charismatic. He would come up with statements like, ‘Don’t worry, I’ll take good care of that. You’re my brother.’”
Claiming to be Asia’s premiere center for plastic surgery and aesthetic dermatology, Beverly Hills 6750 opened its doors to fanfare similar only to the place they are named after. With elaborate media promotions and in front of local entertainment reporters, they flew in no less than Miss Universe Dayanara Torres from California to be their first celebrity endorser during their launch in September 2006.
Add to that the claim that they were affiliated with the Beverly Hills Surgical Institute in California—a beauty clinic said to be popular among Hollywood’s elite—and the company was ready to enter the lucrative business of medical tourism in the country.
According to the International Trade Commission in Geneva, Switzerland, medical tourism is a $40 billion global industry, with prospects of it increasing to $188 billion by the end of 2013.
In Asia, the Asian Medical Tourism Analysis report published in 2008 named the Philippines as one of the five biggest Asian medical tourism markets along with India, Thailand, Singapore, and Malaysia. The report touted Asia as “the most potential medical tourism market in the world.”
And with the goal of making the country “the new hub of wellness and medical care” in Asia, the Philippine Medical Tourism Program was established in 2006 to combine the efforts of two government agencies – the Departments of Health and Tourism – to attract and cater to the growing foreign market of medical tourists.
Warning signs
Beverly Hills 6750 was the creation of David Bunevacz, a Filipino-Hungarian decathlete raised in California and an entrepreneur with investments in various industries. He and his wife, Jessica Rodriguez, a former beauty queen-turned-actress and talent manager were the faces of the cosmetic clinic when it started.
However, Dr. Eduardo Santos points to some of Bunevacz’s traits that they should have caught on in the beginning: “A doctor friend of ours said his personality is anti-social,” which, at first, Santos admits, was hard to believe. However, when explained, it soon became clear.
“Anti-social people are usually very charming and charismatic, they would use you, and once they’re done with you, you’re disposed off. That’s the perfect profile for David.”
Santos and Beverly Hills 6750 experienced it all first hand.
This writer could not reach Bunevacz for comment on this story. Apart from Beverly Hills 6750, he was also president and CEO of Strategic and Comprehensive Consultants Inc. (SCCI) which completed infrastructure projects for several local government units in the Philippines. Efforts to reach him through SCCI’s phone and e-mail failed.
Convincing, insistent
According to the clinic’s current managing director, Dr. Eduardo Santos, David Bunevacz approached him in March of 2006 after being recommended by a common pastor.
“At first I said, ‘I’m not the person you’re looking for,’ because I felt that the unit should be headed by a plastic surgeon. And since it’s Beverly Hills, it has to be a good looking, maverick plastic surgeon.”
However, Bunevacz was insistent. “I slept on it,” says Santos. “After a few days, I said, ‘Okay. I’ll help you out.’” Santos, a fellow of the American College of Surgeons and the Philippine College of Surgeons, was made the clinic’s medical director.
Bunevacz was also able to convince several investors from the Philippines and the United States to invest in Beverly Hills 6750.
Meanwhile, Bunevacz’s only investment was his plan for the company.
In turn, he was named president and chief executive officer. Meanwhile, with his wife’s connections in local entertainment circles, Jessica Rodriguez served as the clinic’s marketing director.
In the months that followed, construction of the clinic at the 11th floor of the 6750 Ayala Avenue tower began while Santos started looking for doctors who would be interested in the business model Bunevacz was planning.
“I was basically busy putting up the physicians’ staff, developing the business plan and layout for this unit, especially the operating room.” When they opened, Beverly Hills 6750 had two plastic surgeons, three dermatologists, and three dentists.
For more than a year after their opening, the clinic enjoyed stable success, cashing in on the rise of Philippines’ medical tourism industry and the Filipino’s obsession with beauty and anything Hollywood and the West.
However, just as beauty fades, the success didn’t last long.
First scandal
Towards the end of 2007, Beverly Hills 6750 was rocked by its first scandal. Allegations of Bunevacz’s misuse of the company’s funds began to surface. “That conclusion actually came about towards November of 2007,” says Santos.
“Some of our board members received information that David and his family were spending money like there was no end to the bucket.” As president and CEO, Bunevacz was the sole signatory for all financial disbursements.
Dr. Bernabe Marinduque, the clinic’s medical director and a cosmetic gynecologist pointed out how the Bunevacz family would always travel first class when they went to the US.
He also recalls Bunevacz buying a luxury car, a Porsche Cayenne Turbo worth about 4.6 million pesos, and a watch reportedly worth 1 million pesos for himself.
But the event that finally prompted the board to take action happened on national TV. Rodriguez, Bunevacz’s wife, was a contestant on local game show, Celebrity Duets.
On October 20, 2007, the night of the show’s finale, in front of entertainment reporters and millions of viewers all over the country, Bunevacz gifted Rodriguez a BMW X5 reportedly worth 5.6 million pesos. The board of Beverly Hills 6750 certainly took notice.
They ordered a rapid external audit on Bunevacz and the report only confirmed what they feared: their CEO had been spending company funds for personal use.
The events that followed went by fast. In several news and entertainment reports, Bunevacz was allegedly confronted by several of the clinic’s investors, demanding that he pay back what he allegedly took.
Local media published reports that five persons—Tyrone Ong, Cedric Lee, Louie Kau, Chito Ho, and Dominique Sytini, identified in the reports as Bunevacz’s business partners—“manhandled” the former track and field athlete.
A case was filed at the National Bureau of Investigation by Bunevacz, but was later dismissed.
After the alleged roughing-up, Bunevacz resigned as Beverly Hills 6750’s president surrendering his stocks in the process.
And on December 6, 2007, together with his wife and family, Bunevacz left for the United States. Santos took over and became the company’s managing director.
Problem uncovered
On December 13, 2007, the entertainment website Philippine Entertainment Portal (PEP) broke the story that the Bunevacz couple had been “booted out” of their clinic.
Days later, the company issued a statement confirming that indeed, Bunevacz and his wife left the company, and that their lawyers were preparing to file charges against their former president.
The owners’ problems, however, did not end there. Further investigation by PEP revealed another problem: Beverly Hills Surgical Institute (BHSI), to whom Beverly Hills 6750 so proudly proclaimed it was associated with was nowhere to be found.
At the time of the clinic’s launch in 2006, the Beverly Hills Surgical Institute did not exist.
“It was then brought to our attention by PEP,” says Santos. “And our response was, ‘Give us time to investigate.’”
After conducting their own investigation into the alleged false affiliation through their US investors, according to Santos, “they confirmed the same.” Beverly Hills Surgical Institute did not exist—at least not anymore.
Although BHSI actually opened in 1999 and grew to have 10 locations throughout southern California, the business closed down by December 2005—a year before Beverly Hills 6750 opened in the Philippines.
“It caught us by surprise!” says Santos. “Here was David again deceiving us! Imagine the doctors I recruited and my reputation and my stature in the medical profession which takes years to achieve, and then to be associated with a scam like that!”
On February 1, 2008 PEP finally published the story that Beverly Hills 6750’s affiliation with the Beverly Hills Surgical Institute in California was completely false and was fabricated by their former president.
The company was in a PR nightmare. With their former president fleeing the country, his wife appearing on local new reports claiming innocence, and with loses worth millions of pesos, the Philippine media had a field day.
In consequence, the clinic’s sales suffered. According to Marinduque, “People were thinking that we were closing or had already closed. Sales dipped a few months after the November event.”
Business as usual
It was critical for the company to reassure their clients that it was business as usual. Something had to be done. On several occasions, several of Beverly Hills 6750’s investors and board of directors met to discuss a concrete plan of action.
“The first [plan] was to create a press release and say to the public that we were still open and it’s business as usual and whatever problems we had were going to be approached through a legal remedy; [and to say that] it was not our intention to publicize the whole thing in the entertainment or business section. Our statement was that we would seek legal remedies.”
Another problem was how to deal with the media. “This was not something that anybody is used to,” says Santos.
“We said, ‘Somebody has to appear as the spokesperson,’ as the new head of the company. But nobody wanted it. Abe (Marinduque) didn’t want it. (General Manager) Suzette (Hahn-Lopez) didn’t want it. I didn’t want my name associated with this. Nobody wanted it.”
However someone eventually had to do it. “I felt obliged to take the position,” says Santos. Together with Dr. Marinduque, they made the rounds of the media explaining their side.
“Would you believe it? A doctor being interviewed by a gossip talk show host? We weren’t used to that. But we had to do it. We had to assume some semblance of a leadership to tell the public that Beverly Hills 6750 was still open and is surviving the crisis.”
Road to recovery
On February 1, 2008, Beverly Hills 6750, through their lawyers, filed the first of four embezzlement cases against David Bunevacz for 1.8 million pesos. In total, the four cases claim that Bunevacz embezzled at least 18 million pesos from the clinic.
On August 8, 2008, a warrant of arrest was issued for David Bunevacz for “misallocation of funds and estafa (embezzlement).”
Bunevacz has since not returned from the United States where he currently resides with his wife and their children.
In a February 2008 interview with PEP, Beverly Hills 6750’s management team—managing director, Dr. Eduardo Santos, medical director, Dr. Bernabe Marinduque, and general manager, Suzette Hahn-Lopez—spoke of the steps they were taking to put the clinic back on track.
First was revising the company’s marketing strategy by dropping all references to a US affiliate and emphasizing the quality and expertise of their physicians.
According to Santos, while their competitors focused on their celebrity endorsers, Beverly Hills 6750 concentrated on marketing the clinic based on the strength and expertise of its medical staff.
“We’re spending primarily on billboards, and then we do a lot of what we call ‘below the line’ marketing,” says Santos.
“These are direct marketing activities where we gather a small group [of people] and we speak to them about our services.”
They also send direct mailers, targeting villages or providing newspaper inserts. “We’re also looking at possible strategies like satellite information desks and kiosks in malls.”
The second strategy was changing the company’s name.
After the issue of their false affiliation with Beverly Hills Surgical Institute, attempts to simply call the company BH 6750 proved to be ineffective.
According to Santos, “The brand equity of Beverly Hills 6750 is strong, even at the possible disadvantage of a scarred image.” So after a month or two of using BH 6750 on their billboards and website, they went back to the original company name.
“There’s still a misconception that we’re expensive,” says Santos. “It’s probably because of the name and the fact that we are located in 6750 [Makati City]. In fact, most of our services are comparable to, if not cheaper than, our direct competitors.”
Third was hiring a marketing group to focus on repackaging the company’ image.
And last was a re-launching of the clinic which happened when they revealed their new image models, former Miss Universe Gloria Diaz and daughter Isabelle Daza in July 2008.
Crash course
In a little over three years Beverly Hills 6750 has gone through events that a company of thirty years would have experienced. For the people behind the clinic, the whole ordeal was a crash course in business management
“You’re thrown a problem and you have to figure out how to deal with it. It was a learning experience,” says Santos, “A very expensive learning experience,” Marinduque rues.
The lessons learned are important ones: “I regret that I did not insist on the two signatories [for company disbursements] because he (Bunevacz) was the only signatory on the checks of Beverly Hills 6750,” says Marinduque. “I regret that we didn’t do the auditing earlier for such a big company with a big capital.”
For Santos it was all about fine-tuning the system. “Having a protocol for all the things that we do as part of the system is something we’re doing.”
Looking back, Santos admits how difficult the whole experience was. “It was a crisis. The president who was supposed to be guiding us was gone, created a scam, and a huge debt.”
However with Santos taking the helm after Bunevacz’s departure, it was an opportunity for a leader to emerge.
“I always look at it like a flock of birds, like that ‘V’ formation where there’s one in front of the rest,” he says.
“Somebody has to bear that brunt of the drag and has to keep the formation in place. The other ducks, you’ll hear them quacking because they have to encourage that particular person in the head.
Occasionally, another bird would fly in and take his place. That’s also part of management. Somebody will have to step up.”
Currently, Beverly Hills 6750 is in the process of constructing its second clinic, with plans to launch it before the year ends. A third clinic is also being planned.
“We’re growing,” says Santos. “So I guess we’re doing something right.”
While the Beverly Hills 6750 brand is resilient, the people behind it have proven that they too are tough, showing that the business of beauty isn’t all clean and pristine.
“I think it’s basically because of the philosophy we are built upon,” says Santos.
“We have very good doctors. We have really good technologies, and we have a good product. It’s just that the brand was smeared a little bit, a corporate smear rather than a professional smear.”
And that’s something the doctors at Beverly Hills 6750 easily know how to fix, with more than just a nip and a tuck.
(Published: Entrepreneur Magazine)