Euromedic is the most interesting private equity backed healthcare services company to emerge from Eastern Europe. And it is certainly the most successful.

The company, sold for €800m last summer to Merrill Lynch Global Private Equity, ARES Life Sciences and Montagu Private Equity, has grown at a phenomenal rate – its 185 centres (92 diagnostic, 60 dialysis, 31 clinical laboratories and 2 cancer treatment centres) now cover 15 countries.

Euromedic is rapidly moving from its home turf – the supply of imaging and dialysis services – into new areas, such as laboratories, the treatment of cancer and cardio-vascular invasive procedures.

Most unusually, Euromedic has managed to expand from Eastern Europe into Western Europe.

How does it operate, and what is the secret of its success? We talked to Euromedic managers:

The concept of PPP (Private-Public-Partnership) is simple; Euromedic buys the latest technologies – MRI, CT, Ultrasound and Angio etc., the latest dialysis technologies, employs 5, 600 trained staff, including more than 1,400 doctors who work with the machines, and rents space from a hospital.

Local health authorities then pay per process or per scan. Typically, they pay the same price as they would to a publicly-owned body.

Managers say the company sees healthcare services as really being about people and relationships. Doctors, for instance, have to be wooed, to be shown that Euromedic is not a threat to them.

As one manager put it: “Often they worry that we are about to take away their business. We have to demonstrate that, on the contrary, because we can get them results so much faster, we are going to help them.”

Euromedic’s strategy is firmly based on working with the public sector. For many private sector operators, this looks a high risk strategy. What do you do when an annual contract expires and you are politely shown the door? What you do with all that expensive kit and trained personnel?

But Euromedic has not been afraid to take risks. It was, for instance, willing to open centres in Bosnia during the war years. In Poland, most of its contracts are annual. Managers say such risks pay off, they build trust, they show that Euromedic is a real partner. “The fact that we were prepared to go into Bosnia during the war years has not been forgotten,” said one manager.

In fact, not a single centre has been cancelled in Euromedic’s existence. That partly reflects the fact that each centre incorporates a range of services. If one is cancelled, this is hardly a disaster.

The company is also happy to go where it is wanted: “Going to prestigious capital cities – that is private sector thinking. Going to the regions, the small cities – that is public sector.”

It is, perhaps, not surprising to learn that the management structure is also local, with considerable autonomy left to the general manager and his team. General Managers are selected for their “local knowledge, connections and ability to build a business.”

These days, Euromedic can attract the best. The Greek general manager was high up in GE, the Italian came from premier private player St Donato and the Portuguese is ex-Amgen.

But the controls are there. Once a day, computers generate a report which shows precisely what processes were performed by each machine in each centre and at what price. Managers say that this means that problems which, in other companies, could take a month to surface are spotted instantaneously.

The move to Western Europe was pushed hard by Warburg Pincus, the private equity firm which bought a large hunk of Euromedic in 2005, selling it on in 2008. Warburg was convinced that Euromedic could make the concept work in the west.

The initial reaction in countries like Greece and Italy tended to be sceptical – particularly from would-be sellers.

A manager said: “Typically, you’d find a doctor had started with an x-ray in a bedroom. When that had worked, they’d added an ultrasound and so on, with the staircase as the waiting room. When we first approached these people they wanted to know what someone from Eastern Europe could teach them.”

The answer was to fly them east to show them Euromedic’s gleaming, purpose-built facilities.

There have been other differences: in Western Europe, Euromedic has typically expanded by acquisition, in Eastern Europe by creating greenfield sites or taking over public services.

And there was a set back in the UK, where Euromedic set up a tele-radiological centre two years ago, only to be told by the National Health Service that it would do this in house.

Euromedic is now moving into new areas.

This includes laboratories, after the Greek general manager argued the toss when told to close a lab which came with an imaging acquisition. Eventually, he was allowed to keep it open and prove his case. The company realised the close synergy that exists between labs and imaging, and has now opened 31 labs.

Euromedic also plans to move into the actual treatment of cancer and into the area of cardio-vascular invasive interventions.

The company sees such treatment centres as a natural extension of the technology. As one manager put it: “The same machines which detect the cancers can be used to treat them through radiotherapy.”

Cardiosurgery, using stents, can now be done under local anaesthetic as day surgery – Euromedic can move into the area without building massive operating theatres.

The company is also flirting with becoming more of a one stop shop, and offering ambulatory day surgery. It already serves a few patients directly, providing medical check ups at VIP clinics in a few larger cities. The first two bunker-like cancer treatment centres have been built, at great expense, by Euromedic in the grounds of two Polish hospitals.

Again, Euromedic is prepared to take the risk of creating such buildings, which have no alternative use, in order to enter the market. Managers say they are often asked why they aren’t planning to open in India or China. The truth is the company has enough under its belt in Europe, where this year it should serve 5.5 m patients.