Egyptian authorities vow to block private hospital merger
Egypt's minister of health and the head of the Egyptian Doctor’s Syndicate have said that they plan to fight a merger involving seven private hospitals, which has been negotiated and funded by a foreign investor.
According to the Al-Ahram daily, the merger raises the specter of a foreign-controlled monopoly coming to dominate the Egyptian medical sector. This is a possibility, they say, given the Egyptian legal system’s lack of an anti-trust law. As Professor Hamdi El-Sayed, the head of the Doctor's Syndicate, told the newspaper, the medical sector "must not be left totally to the forces of the market."
The merger, which is being brokered by an Egyptian company, Global Capital, is being negotiated between the U.K.-based Anglo-Egyptian Association and seven Egyptian hospitals and medical centers—Nile Badrawi, Al-Salaam of Mohandessin, Al-Shorouq, the Cairo Specialized Hospital, the International Eye Center, Al-Borg Laboratories and the International Urology Hospital.
The most vociferous criticism of the merger was directed against the element of foreign involvement. Ismail Sallam, the minister of health, and El-Sayed both spoke about "a foreign monopoly," with Sallam stating that if a 100 percent Egyptian merger had been involved, the government would support it because of its obvious economic viability. It is worth noting that, although these hospitals are private, they service a sizable portion of the population through the public health insurance system.
There is nothing to guarantee that once a conglomerate has been formed that it will not successively purchase smaller private hospitals, Sallam told Al-Ahram. Having become the sole private provider of healthcare, it might then engage in price gouging and other exploitative practices, he added.
It is important to understand the concerns of the Egyptian authorities within the context of an ongoing national debate about the economic consequences of globalization. Within the context of its commitment to the World Trade Organization’s General Agreement on Trade in Services (GATS), starting in 2005, professional services such as medicine, accountancy, insurance and legal consultancy will be liberalized. During the run-up period, Egypt is required to lift all barriers to the movement of healthcare, accountancy, legal consultancy and insurance services.
"[The merger] will mean that this foreign-owned consortium will turn to foreign banks for funding and to multinational insurance companies to develop a health insurance system. It will create a network of foreign doctors and treat only the categories of patients it chooses, which will obviously negatively affect the large number of Egyptian patients who are treated in those private hospitals under the current [public] health insurance system," El-Sayed said to Al-Ahram. "All of this makes us very concerned and apprehensive that Egyptian medical professionals might be supplanted by strangers in our own country."
Explaining his reasoning for supporting the merger, Professor Fathi Iskander, the chairman of Al-Salaam Hospital, said Egyptian private hospitals are currently in severe financial straits. Operating the hospitals as a consortium would reduce costs, increase sources of funding and improve the quality of administration and services, he stated.
Iskander stressed that under the terms of the deal being discussed, the Anglo-Egyptian Association would own no more than 50 percent of the conglomerate. However, El-Sayed expressed his skepticism that an organization would invest the type of capital required without gaining majority control over the operation.
Mahmoud Fahmi, the former head of Egypt’s Capital Market Authority, told Al-Ahram that the only obstacles that could be used at present to prevent the merger are those at the disposal of the minister of health, who has prerogative whether to license an organization according to whether it is providing healthcare in the public's interest. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)