As European countries partially privatize their government-run healthcare systems, American Medical International's newly named head of overseas operations said the company will find major growth for its hospital business.
Robert Buchanan, M.D., whose background is primarily in leadership at prominent teaching hospitals, has been hired as director general of international operations for AMI, a Dallas-based chain of 35 for-profit U.S. hospitals.
"Many of those countries that have had nationalized systems are `denationalizing,"' Dr. Buchanan told MODERN HEALTHCARE last week. "We will be trying to explore collaborating with governmental and nongovernmental organizations to upgrade access, quality and amenities (of healthcare facilities). There has been minimal capital spent on programs and facilities."
AMI, which had more than $2 billion in revenues last year, left the foreign hospital market in 1991 to reduce debts from a 1988 leveraged buyout, AMI executives said.
The company's 26 overseas hospitals were sold to raise the bulk of $1 billion needed to reduce AMI's debts.
"We sold our weakest domestic properties and all of the foreign properties, which were very successful," said AMI's chief executive officer, Robert O'Leary. He became head of AMI in June 1991, after the company had left the foreign markets.
"We've kept in touch with our overseas investors and with foreign hospitals, and we've waited for the timing to be right," Mr. O'Leary said.
The 66-year-old Dr. Buchanan went into semiretirement earlier this year after 12 years as general director of Massachusetts General Hospital in Boston. He also has served on AMI's board of directors.
Dr. Buchanan was selected because he and Massachusetts General have a history of involvement in healthcare around the globe.
Massachusetts General was the consultant for a 320-bed hospital in Bombay, India, and Dr. Buchanan is chairman of the China Medical Board of New York, a foundation that led to the creation of a hospital in Beijing.
"The reality is that (Massachusetts General) is a very large enterprise with multiple subsidiary affiliates," Dr. Buchanan said. "For people to say that we're still running a teaching hospital, they should consider we have expenditures of $1 billion a year and are the second-largest employer in the city (of Boston)-the first being the government."
AMI executives expect its foreign business to account for some $500 million in annual revenues in the next few years. They didn't estimate how many hospitals they'll open but said the first facility is likely to be located in Switzerland.
Other potential sites for hospitals include Great Britain, Germany and Spain, the company said.
Dr. Buchanan will work for AMI part time while continuing to serve as chairman and CEO at Boston-based RSTAR/ATI, a telemedicine company that is a subsidiary of Massachusetts General. Dr. Buchanan also continues to work with Massachusetts General on projects related to its affiliation with Brigham and Women's Hospital in Boston (Dec. 13, 1993, p. 3).