The Great Escape
An increasing number of Spanish private healthcare operators are turning to Latin America to grow. Why?
Last month, the Valencian government issued a notification to Ribera Salud, the operator which developed the PPP model in the Community, informing it of a “rigorous process” where healthcare provision will switch back from private to public ownership by April 2018 in the city of Valencia, and possibly Alicante.
The reason? Valencia’s 2015 election led to the formation of a left-wing coalition ideologically opposed to private healthcare, despite Ribera Salud’s good management record and the high cost of reverting to a public system.
But the group, which is currently bidding for a hospital PPP project in Slovakia and running a concession in Peru, is not deterred – and just announced the acquisition of Colombia’s largest insurer Cafesalud as part of a consortium.
Cafesalud fits very well with Ribera Salud’s business model. It is one of the many EPS (Entidades Promotoras de Salud) in Colombia, which receive payments from social security and contracts health providers – an interesting example of public-private collaboration no doubt attractive to Ribera Salud.
But Ribera Salud is not the only group seeking opportunities in Latin America. Spain’s largest healthcare provider, Quironsalud, which was recently bought by German hospital operator Fresenius Helios, entered Peru last December.
And the trend is not only visible in the hospital sector.
Daniel Anton, the CFO of Spain’s second largest dentistry chain Dentix, says the group aims to enter the markets of Chile, Peru, Ecuador after successful expansions in Mexico and Colombia.
“We don’t intend to open more practices in Spain, which is quite a mature market,” he adds.
Meanwhile, another dentistry chain, iDental, has named KPMG as adviser to sell a majority stake with the goal to expand in Brazil and Colombia. Several Spanish papers are reporting that the group is facing troubles after a series of lawsuits started by patients.
So what to make of this? It seems there is not one single reason why Spanish groups are leaving. While some fear limited growth opportunities in an increasingly consolidated market, others are running away from the anti-private turn that the country is facing.
But maybe it’s less of a problem with Spain than a favourable moment for Latin America. With incomes rising, systems geared towards the inclusion of the private sector and a strong demand for healthcare services, the region is ripe for investors to come in. And without a language barrier, it seems that Spanish healthcare providers are merely seizing the opportunity.
We would welcome your thoughts on this story. Email your views to Ariane Jugieux or call 0207 183 3779.