A brave move
It is not often you come across private equity prepared to put serious money into building hospitals where 99% of the patients will be paid for by a public payor. The risks are high. So why is Penta Investments preparing to build a Pan-East European hospital chain with projected sales of at least €1bn by 2025?
New CEO Prof Attila Vegh, fresh from a decade running big NHS hospitals in the UK, has grand plans for Penta Hospital Group. Newly amalgamated by merging Polish hospital privatisation play EMC with Svet Zdravia, the largest Slovak private hospital chain, which owns a few hospitals in Czechia, the new group should have sales of nearly €300m in 2016. That makes it substantially larger than Agel in Czechia and a country mile bigger than any other hospital groups in the region.
He plans to buy more private hospitals, probably mainly in Czechia where we tbink that Vamed and Agel could both potentially be sellers. But the main thrust, he tells us, is to demonstrate what “good hospitals” looks like to public payors. Penta is preparing to invest heavily to build brand new facilities and to show East European governments what state of the art practice really looks like when it comes to hospital management. He is aiming at 15 countries (he is already investigating Ukraine and doesn’t dismiss Russia). How big is big? Well Penta plans to spend over €100m on a single site – a tertiary hospital with 400 beds and 40 ICUs in Bratislava.
It is a brave move. On the face of it, the prospects for private health care sector involvement in East Europe have rarely looked worse. A populist government in Poland has shut down cooperation. Czechia has a socialist government and Slovakia has a history of see-sawing.
But Vegh and Penta are undeterred – he says at municipality level, the group has seen a change in attitude. This is a long term punt. He talks of 2025, but says that Penta is likely to be a holder beyond that. The really staggering thing is that Penta has actually named a hospital group after itself. When was the last time you saw a private equity fund with the guts to do that?
Vegh is speaking at Healthcare Business International 2017, the only event to cover private health care services at a Pan-European level. Click here to see the agenda. Here to hear why delegates like it. And here to buy a ticket.
We will carry a longer interview with Vegh next week.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
