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EBRD invests in private hospital management company Hospinvest
The EBRD is supporting an increased role of the private sector in delivering public healthcare services in Hungary with an investment in the hospital management company Hospinvest. The Bank’s Board of Directors has approved a total investment of €6 million, of which €4 million will be used for the acquisition of a minority stake and the balance will be set aside for future capital increases.
Established in 2003, Hospinvest is a private Hungarian company which is restructuring, modernising and managing municipal hospitals and outpatient centres. At present, Hospinvest has four hospitals and related outpatient centres under its management. In May 2007, the company merged with the private hospital pharmacy chain Ispotály to build upon synergies. The EBRD’s finance will support the ambitious expansion plans of Hospinvest to increase significantly the number of hospitals, outpatient centres and hospital pharmacies under its management.
The Hungarian government launched a wide scale reform of the healthcare sector in July 2006 to meet rising demand and costs and thus the need to restructure operations, where the authorities see an increasing role for the private sector involvement. A key element of the reforms has been the rationalisation of in-patient care an area where Hospinvest has developed significant experience.
Varel Freeman, EBRD First Vice President, said that with the Hospinvest transaction the Bank is entering a new area in private sector involvement in rendering public services. The EBRD’s investment will support both an upcoming new enterprise with innovative solutions and the government’s reform plans. Hospinvest serves as a good example for the role the private sector can play in the efforts to modernise the public healthcare sector while maintaining accessibility and affordability for the population, he added.
Gábor Kollányi, Chairman of the Board of Hospinvest, said that the company introduced a concept of public hospital management and service provision that meets modern quality requirements and seeks to provide the best possible service to patients under current public healthcare financing conditions. ”With the EBRD’s investment we have now a solid financial basis to achieve economies of scale with a dynamic expansion of our network. The EBRD partnership will also lead to a new level of transparency, which is a key requirement in the public healthcare sector,” he added.
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