Concerns were expressed at the House health committee about the purchase of a third private hospital by an investment fund as it could create an oligopoly in the provision of healthcare. They were referring to the purchase of 50 per cent of the share capital of the American Medical Centre by Hellenic Health Group (HHG), which had previously bought Apollonion and Aretaion. HHG owns several hospitals in Greece, but it belongs to CVC Capital Partners, which control hospitals all over Europe.
The go-ahead for the purchase of the American Medical Centre was given earlier this month by the Commission for the Protection of Competition, which decided it was within the bounds of a competitive market. The representative of the Commission said the effects of the ownership of three private Nicosia hospitals by one group were examined and would not have an impact on competition in the sector. Dr Marinos Soteriou, head of the American Medical Centre, told the committee that HHG would have 260 beds whereas Nicosia General Hospital had 500 and other private hospitals in Nicosia 190. In other words, it would have over a third of the beds.
Will this undermine competition? Would the HHG be in a position to negotiate higher rates per bed with the Health Insurance Organisation (HIO) in order to stay within Gesy, which could not afford to give up so many beds. The American Medical Centre is not in Gesy at present, but the new owners could change this, thus strengthening their negotiating power. It is no secret that in order to persuade Aretaion to join Gesy, the HIO violated several of its own rules and regulations and it would be even more inclined to do so with a group that would provide 260 beds.
Akel deputy Giorgos Loucaides set out what was at stake. “The creation of a monopoly would, among other things, affect the negotiating power of the HIO, which interacts with private hospitals and makes agreements with them for the rewards and budgets coming out of Gesy.” The head of the HIO, Athos Tsinontides, also expressed fears about the creation of oligopolies, although he admitted the HIO had no problem so far. These are justified fears as the danger of oligopolies developing cannot be ruled out; more hospital purchases are currently in the pipeline.
Those who should really fear what is happening in the healthcare sector are the greedy doctors and nurses of the public hospitals which are running Okypy, the state health services, into the ground with their pay demands and restrictive work practices. This year, Okypy’s deficit, according to the finance ministry, would be close €100m, and it will increase if more beds are provided for Gesy by private hospitals, because fewer patients would visit public hospitals. In the end, Okypy could be begging foreign health groups to take over its public hospitals so they could carry on working, because the taxpayer cannot indefinitely satisfy the greed and sense of entitlement of the public sectors doctors and nurses.
The fact is that healthcare is a very profitable sector, which is why groups owned by private funds are investing in hospitals. How the situation will develop in Cyprus, nobody can say at present but the health ministry must keep a very close watch on the sector.
