In the Community of Valencia, Ribera Salud Group is present as a shareholder in five health departments, with five hospitals and over 100 Primary Health Care Centers, and also in Erescanner Salud (Magnetic Resonance Imaging service). In the Community of Madrid, the Group is present in the company that has been awarded with the management of the future Torrejón de Ardoz Hospital and the BR Salud company (the Central Laboratory that provides coverage for six public hospitals).

Ribera Salud has a majority stake in Eche, Torrevieja y Torrejón Hospitals, and the Group’s turnover for 2010 was 190 millions €, EBITDA: 19 millions €.

Law 15/1997 of 25 April, approved by the two biggest political parties in Spain (People’s Party and Socialist Party), opening up the possibility for the health care services to be offered by legal institutions other than the State itself, introducing concepts such as the separation between financing, purchasing and provision of the health services. The Regional Government of Valencia developed this Law to start up the La Ribera Hospital in the town of Alzira, managed by the administrative concession model, the first time the comprehensive management of the public health service was applied in Europe.

The ‘Alzira model’ can be considered as the heir of the policies established and changes introduced by, as you will know, the British Labour Government as well as Swedish Social Democratic Government in their respective countries. However, the Regional Government of Valencia’s project goes one step further, including for the first time ever the capitative payment system and the clinical management in the public health system.

The Alzira Model, is based on a loyal collaboration with the Public Administration (whatever political color the Government has), dedication to the professionals and commitment to the citizens to offer a top quality service, highly efficiently and guaranteeing applying the best-known practices.
Contributing more thanr 10 years experience in the management of public hospitals, Ribera Salud is one of the main hospital groups in Spain, and I’s been exported to different countries such as Portugal (governed by Socialist Party…) Brazil and others in Latin America.

We hope now, you can perceive Ribera Salud as a spanish leading company in the growing industry of PPPs, and not as a strange animal.

Ribera Salud is a strange animal. It is present in the share capital of five of the Alzira model concessions in Valencia and one in Madrid, each of which looks after the primary and secondary healthcare needs of between 150,000 and 300,000 people on a fee per capita basis with contracts extending from 15 to 20 years. In each case, Ribera has invested alongside a large insurer such as Sanitas, DKV or the doctors' mutual Asisa. In each case, a savings bank has also invested alongside.

It is also an investor in imaging services provider Erescanner Salud (Magnetic Resonance Imaging service) and in BR Salud company (a central laboratory covering six public hospitals).

Apart from the Eche concession in Valencia and its Madrid project, Torrejon, Ribera doesn’t have a majority stake in these projects. Nor is it exactly clear what precisely it brings to the party. The company would claim, rightfully so, that it has the greatest repository of what works and what doesn’t work in the Alzira model. But these management skills and techniques are shared with the other shareholders and are learnt by the individual managers who run these projects.

Sales came to €190m in 2010 with EBITDA of €19m.

The unkind could say that Ribera’s principal asset would appear to be a strong relationship with the People’s Party in Valencia!

Certainly, Ribera has failed so far to grow much outside of its home region. Yes, it is running one of the new concessions in Madrid which operate on similar lines. But Capio Sanidad has snapped up nearly half a dozen others.

Nor is it clear that the Alzira model is exportable. Ribera has high hopes for Latin America and was talking a year ago about Peru. But nothing has, as yet, materialised. Meanwhile the last decade has seen hundreds of academic and policymaker tyre kickers visit the Alzira concessions. Ribera says that its model has influenced the formation of foundation hospitals in the UK and the PPP model in Portugal. That is true but the Portuguese have retreated from allowing private operators to manage public hospitals, and neither model looks much like Alzira.

Nor is it clear that the Alzira model really delivers high levels of profit. The insurers appear to have got involved because they wanted to learn what it was like to run complete healthcare networks. They are unlikely to have made serious money out of it.

All this is a shame. The model appears to deliver a saving of around 30% for the state with no deterioration in quality.

And there is, of course, a big potential upside. This model is deeply associated with the People’s Party, now far and away the favourite to form the next government in Spain. If they won you might posit a massive national roll out of the Alzira model.

But even this is questionable. First note that the PP, which is in power in Galicia and other regions, has not rolled out the model except for in Madrid and Valencia. The regions enjoy a great deal of autonomy. Secondly, it is not clear whether the Alzira model can really be successfully adapted to the new economic conditions.

In all but one case, the Alzira model has been associated with a new build hospital which has allowed the concessions to hire new staff all of whom accept the different working conditions in the Alzira model (don't skive off at lunchtime, work hard and you’ll make more money).

The one case where a concession took over an existing hospital has had a much tougher time with many staff hanging on to their old contracts.

Anyone who buys Ribera had better be a visionary with a clear picture of what is attainable!

Subsequently, I was approached by Ribera which wished to reply to this article. Here are its comments: