Finnfund

It was seven years ago that Scanfert Oy, from Tampere in Central Finland, established a specialist clinic for treating infertility in St. Petersburg. In the intervening years the demand for private medical services increased rapidly in St. Petersburg, and Scanfert decided to set up a full-service medical centre there.

One of the financiers of the St. Petersburg New Medical Center, which will open in late summer 2003, is Finnfund.

“Back in 1996 when we started in St. Petersburg, we thought it might be possible to expand operations in the future,” says Scanfert’s managing director Ralph Ashorn. “Over the years we became more convinced because we saw that there was a need for a full-service facility of a western standard.”

First private maternity hospital in Russia

The AVA-Peter clinic that Scanfert established seven years ago specialises in urology and gynaecology in addition to infertility treatment. There is a pharmacy on the same premises.

With the opening of the New Medical Center, operations are expanding to cover all branches of medicine and surgery. At the planning stage it was decided to add a maternity ward, too. Medko Medical will be responsible for supplying the medical equipment.

“We will be the first private maternity hospital in Russia,” Ashorn boasts.

The New Medical Center aims to treat about 90 000 people a year. Some operations have already begun, under the old AVA-Peter clinic. There are currently 95 employees and the number will double when the new hospital opens.

Medium-income patients from St. Petersburg

Good economic growth has spurred demand for private health services in Russia. The need in St. Petersburg is heightened by the fact that only its registered inhabitants are entitled to free public health care. It is estimated that more than a million people registered elsewhere in Russia live in the city. They have to turn to private medical services.

Ashorn says that most private clinics in St. Petersburg are expensive and people on average incomes cannot afford them.

“Part of our business concept is to offer health services at moderate prices. It guarantees us a larger circle of customers,” he notes.

So far there is relatively little competition for private services in St. Petersburg. The city has countless clinics dealing with just one branch of medicine, Ashorn says, but there are no places offering a full range of diagnostic services. “Some of the smaller clinics have foreign shareholders.”

AVA-Peter as a training clinic

Most of the Finnish companies that have invested in Russia are in manufacturing. Service sector operations like the New Medical Center are still rare.

“We started small and have steadily grown. Initially there was opposition to a private clinic but we have gradually built up good relations with the local scientific community. We now act as a university training clinic for St. Petersburg. Good relations are also useful in finding qualified staff.”

Ashorn complains that stifling bureaucracy and bewildering regulations are some of the worst problems facing health care in Russia, like many other sectors.

“Registration, licences and other matters that are straightforward and simple in Finland are complex matters in Russia. Many of the regulations in the health care sector are old-fashioned and self-contradictory.”

Dealing with the bureaucracy requires extra staff, Ashorn says, and many activities that would be outsourced in Finland have to be done in-house in Russia.

“For instance, we have to do our own bookkeeping, because it is detailed and difficult. Frequent inspections also tie up our staff.”

Financed by Finnfund and the World Bank

Alongside Finnfund, the New Medical Center is being financed by the International Finance Corporation, which is part of the World Bank Group, and the Nordic commercial bank Nordea. Finland’s export guarantee company, Finnvera, has granted the project a guarantee.

“It’s a good combination of financiers. For one thing, Finnfund’s expertise has helped to cut through the IFC’s red tape. Of course we can call the IFC in Washington to sort things out but the amount of paperwork involved in the project was a surprise,” Ashorn admits.

Collaboration with Finnfund has been plain and straightforward, he says. “In many cases it’s easier for a Finn to talk to a Finn.”

In addition to St. Petersburg, Scanfert’s chain of AVA clinics extends to Tampere and Turku in Finland and Lisbon in Portugal.

For more information please contact Ms Sari Nikka tel. +358 9 3484 3304