Privately-run hospitals incur heavy losses
Privately-run hospitals incur heavy losses
The healthcare sector has not been an attractive investment channel for investors, with many hospitals left idle, while others have been incurring losses.
Tran Van Phuong from the HCM City Research Institute for Development, said that most private hospitals came into existence only recently.
In 2000, there was only one privately run hospital in the city, Hoan My Hospital, with 50 beds.
By 2013, the city had 39 private hospitals licensed, including three 100 percent foreign- owned ones. However, three of them went bankrupt.
The Phu Tho General Hospital in Tan Phu District was shut down one year ago following a period of bad business performance.
According to the HCM City Healthcare Department, Phu Tho Hospital had 500 beds, equipped with modern equipment and the staff was skilled enough to treat cancer patients.
However, the hospital incurred major losses until the day it shut down. In 2007, the hospital was sued by more than 30 creditors for repayment of VND120 billion. Many pieces of healthcare equipment were taken away by creditors.
The owners of the hospital had a meeting with creditors, suggesting to sell the hospital for $26 million. However, no further information has been heard about the hospital.
The same situation is being faced by the Vu Anh International General Hospital in Go Vap District. Covering an area of 10,000 square meters, with 200 beds, the 5-star hospital targets high income earners.
However, the business performance has been bad: it can receive no more than 10 patients a day, while qualified physicians have left, and the hospital’s director is facing some legal problems.
A report showed that many privately run hospitals in HCM City are running below the designed capacity. Hoan My Hospital, with 228 beds, for example, is running at 70 percent of capacity; and Trieu An Hospital, with 355 beds, at 60 percent.
The other hospitals, less known in HCM City, are in a worse situation. Ngoc Linh Hospital is running at 13 percent of the designed capacity, while Duc Khang is at five percent.
Phan Thanh Hai, director of MEDIC and chair of the HCM City Association of Private Healthcare Practitioners, said many hospitals in the city had changed hands several times. As the owners incurred losses, they had to sell the hospitals to stop losses.
The Hoan My Medical Group had drawn up a very ambitious plan to develop 10 hospitals, each of which had investment capital of $20-25 million. However, when facing some financial problems, it later had to transfer a part of its stakes to other investors.
In 2009, Hoan My sold stakes worth $20 million to VinaCapital and Deutsche Bank in the first merger & acquisition deal in the healthcare sector.
In 2011, Indian Fortis Group spent $100 million to buy 65 percent of of stakes of Hoan My Group. In 2013, all the shares were sold to Richard Chandler Corporation for $80 million.
vietnamnet
