One of the investors in a €40-50 million project to build a hospital that takes private patients talks about what he expects to achieve – and gain.
The professionals involved in Hungary’s state healthcare, and the patients who avail themselves of it, frequently say the system is sick. Finding funding for a quality state health system is a constant concern. But for those who can afford private insurance, there is a wider range of possibilities. These possibilities are about to increase with the pending launch of the Duna Medical Center, comprised of a clinic and a main hospital on Soroksári út. The hospital will have a staff of 600 and will provide comprehensive health care according to the organizers. The One-Day Surgery Center is set to open this summer, with the full hospital due to follow next year. We spoke to Igor Iankovskyi, the Ukrainian-born backer who is partnering with healthcare investor Joseph Priel in the project.
You control the Diamond Sphere Group from Monte Carlo, with business interests including financial services, rail and water transport, agriculture and mining. Why invest in healthcare in Hungary?
I have had various other investments in the country so there has already been some good experience with those projects. When it comes to healthcare investment in particular, I see great potential in Hungary’s location and the expertise of its people. This meets the modern world’s needs for efficient, high quality private healthcare services. This all adds up to an environment where I expect a private healthcare investment to thrive.
The public healthcare system in the country is facing serious difficulties right now. Why, in your view, is this the right time to start a business in this field?
In a competitive business environment, when the time is right for an investment, it is already too late to step in and reap optimal benefits. In some aspects, private healthcare is still a challenging environment in Hungary; however, economic, demographic and business trends show that there is a good opportunity to invest long-term.
Have you received financial support from the government?
We have not received any support from the Hungarian Government – either in the form of financial support or in tax relief.
Some investors have expressed concerns about the business environment here, and the government’s unorthodox approach to economics. Does this worry you?
I am a seasoned investor with a wide investment portfolio in multiple countries. I believe that every challenge can be dealt with. When it comes to my investments in Hungary and Duna Medical Center in particular, I am not concerned at all.
How is the preparation work going at the first clinic?
The Ambulatory and One-Day Surgery Center is set to open in the summer. We have done a tremendous job converting four floors of an existing office building and by now we have finished the major building works and are installing equipment and training our staff for the opening.
I understand the main hospital, located on Soroksári út near the first clinic, is being built on a plot purchased from Sándor Demján’s TriGránit property firm. How is this project going? When do you expect the hospital to open and start taking patients?
The estimated budget of the entire project, with equipment included, is €40-50 million. This is a very complex undertaking: we are now going over the plans, which are at the stage of finalization. As soon as we are done with this, we will issue a tender for the construction work. Right now there is no delay for the hospital; we are running according to plan.
Which diseases will be treated in the private hospital?
We have set the ambitious target to become the center of excellence for private healthcare in Hungary. To achieve that, we will not neglect areas that are less profitable: Duna Medical Center’s hospital will be comprehensive, covering all major areas of medicine. This will be one of our main differentiating factors – in addition to excellent staff and state-of-the-art equipment.
What is the projected return on investment in the long run?
As in most cases in healthcare, our fixed costs will be relatively high so this is definitely a long-term investment. We will not compromise on quality, on experts or on equipment for the sake of extreme profit. Of course, I am here to do business and I do expect significant returns later on.
Can you say something about your connections to Hungary and how you came to get into a partnership with Joseph Priel?
My family has been the owner of one of biggest chemical companies in Ukraine for many years and I established and managed the company that was responsible for supply and marketing of production. Back then we did business with several key partners in Hungary.
Two years ago some good friends who are doctors approached me. They told me about the lack of private health care facilities in Hungary and in Budapest, and that many good professionals are willing to work but don’t have opportunities for private practice in the right surroundings and with modern equipment. We went through research and statistics; we investigated the situation and based on this data I decided to invest.
By that time I was looking at several opportunities, one of which was that of Joseph Priel, together with another partner, Amir Nachumi. Their offer was good and this is how this ambitious project, Duna Medical Center, started. Since then, there have been a lot of improvements.
Do you have any thoughts on what would make a good investment these days? What is your next investment?
Of course healthcare represents a good opportunity: Life expectancy is increasing and people are becoming more health conscious. The other areas that I am keen to explore, or to broaden current activities in, are those related to environmentally friendly investments in food and energy – and IT remains a hot topic.