The “no arseholes” rule

There was an interesting discussion at a London forum on how investors and the CEOs of operators best worked together and whether physicians made good bosses.

Dr Tony Romero, the CEO of London-based Cygnet Health Care, said that, when he was vetting private investors for his last investment, he decided to not necessarily go with the highest bidder. “It is like a marriage and I’m not prepared to work with people who don’t share values and have the same vision. We consciously chose a firm we felt we could work with for less money.” Another CEO agreed: “We have a ‘no arseholes’ rule. Life is too short.”

Private equity houses gave their views on senior management in health care services.  One said later: “I’ve worked with people in financial services, retail and healthcare services. Financial service people are quite boring and very steady. Funnily enough, healthcare is like retail, with a lot of lively characters with big egos.”

The session also looked at whether physicians made good CEOs. Here opinion was somewhat divided. “The trouble with physicians is that they are not very good at change. They also struggle to move from a world in which they are delivering a vocational service to one where they are guided by KPIs,” said Paulo Pieri, the CEO of hospital group Circle Health. He felt you needed to have managers with a wider range of skills to complement physicians.

Angelika Schoechlin at Antin Infrastructure Partners, felt that doctors tended to be very driven. “I think it is no accident that research shows that physician-led businesses do best.”

There was a general feeling that it was vital to have people in the marzipan layer who could patiently manage process and attain incremental goals.

The no arseholes rule is a reality in many deals. And it is noticeable that you still find one-horse races, where family owners chose to entrust their life’s work to people they respect. CVC’s acquisition of Quiron, the largest Spanish hospital chain, now part of Fresenius Helios, was one example and we’ve also seen Sonic manage several deals on an exclusive basis.



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