Tell us about USP, how was the company founded?

I started with the help of a group of collaborators, I had been pondering this project for a long time. We really got into debt, we mortgaged all our properties and we finally took the plunge, in a manner of speaking. The results have been very positive, and I am sure that the success was due to a number of elements, most of all, of course, the hard work of a lot of people, although, I suppose that we have also been very lucky. An American idiom expresses it accurately: We were the right people, at the right place, at the right time."

One of the key factors was having learnt from previous errors. Ten years ago, during a month long business trip, I showed my business plan to a lot of investors, in an effort to find financing in the U.S. But it was not the right time; the U.S. was going through a severe economic recession, which, later on, helped us to choose the best moment. Now we are extremely satisfied; we are growing significantly, and when we look back, we remember the way we started, only seven years ago, just three of us in a small office in Madrid. Nowadays there are more than 1,800 professionals working for the company, there are hospitals in six Spanish towns, 1,350 doctors, and a total of 23 medical centers, the company invoices more than 100 million euros. Our rapid growth, the uniqueness of the project and the effectiveness of the hospitals have made us a prestigious group, although we realize we are only halfway there.

Moreover, in July 2004, the Spanish management of USP Hospitals, in collaboration with U.S. parent company USP international, signed a strategic agreement with Spanish fund Mercapital, Spain's capital investment leader, which consolidates USP Hospitals as the number one private hospital company in Europe. The agreement is Spain's largest MBO (management bu out) in 2005 and was formalized through a transaction of $260 million (217 million euros).

Following the agreement, USP Hospitals is comprised by three strategic partners: Mercapital, who has acquired 65% of the company, th Spanish management team, who have 20%, and U.S. USP International who retains 15%.

What is USP, what is the company's mission and what are the keys to its success?

The answer is obvious: USP is a very well planned company. The key is that for six years before starting the company, we worked hard, studied and thought out the project, which allowed us to be sure where we wanted to go and how. Another key factor, although it may sound like a cliché, is our staff, bright and talented but, above all, very good people. Of course, It was also a very important to have our partners in the U.S., who not only give us freedom of action but above all believe in us and trust us; in other words, there is no colonialism, from them we have learnt how to act in our hospitals. That is, when we buy a hospital in Seville for example, we like it to be run by people from Seville: the same goes for Galizia, Catalonia, or for any other region.

Is USP an international company that adapts itself to the local markets, or on the contrary, do you have a central strategy and policy? What happens when you purchase a medical center, do you keep the staff?

It depends. We make bespoke suits. I learnt that from my grandmother who was a textile industrialist. That is, in Spain, each of the local markets has its own rules despite not being a very big country. We adapt our offer to what the market demands. Sometimes we purchase hospitals that are very well integrated into their community, for example, the person who is managing our hospitals in Andalusia -one in Seville and another in Marbella- was one of the previous owners and general director of the Seville hospital. When we bought it we asked him to stay on. And not only did he stay and manage the hospital, but has already been working for us for four years and has invested part of his money in a block of shares the company has recently tendered.

In other centers we have acquired we have had to employ a manager for different reasons, such us they were the property of physicians or of religious order and had neither the ability nor the desire to continue running the hospital.

There have been a few amusing anecdotes: for example when we opened a new wing of the hospital in Murcia, which had been acquired from a religious order, the nuns were there, in the hospital as if they were still theirs. They were thrilled. It is all part of the job.

What are USP objectives?

One of our main objectives is to become part of the community, that is, to serve the citizens. Our motto is: "Our service is a feeling". And it is not easy, because it is easy to stereotype client service, quality, those things we are always saying. But what is clear is that our industry deals with sensitive issues because when a person sets foot in our hospital, in addition to be physically ill, he has a psychic handicap as well. The disease itself produces fragility, there is a personal loss. Our obligation is not only to help him recover but also to return him to a positive psychic state, so that he can leave the hospital globally healthy. This is everyone's job. That is, the health professionals reestablish the patient's health but the entire hospital staff must also take part. How do we do it? We try to make the rooms look as similar as possible to their own environment, happy and full of life -yesterdays hospitals were so gloomy- we hang pictures on the walls, we try to make people smile. There are a lot of small details, but this is everyone's daily task.

As I said before we are a young company, seven years old, continuously buying hospitals, one after the other. These hospitals require an enormous amount of work, a huge effort on everybody's part: those from whom we acquire the hospitals, the people we put in charge of them and those who will be working for us. This is a big change for them too, and we have to understand them together we must focus our attention on each client who decides to put his health in our hands. It is an exciting job, and I would even dare to say a tough one.

Please, compare the U.S. Health System to the Spanish one.

I think there is no way to compare the two. They are two radically different models. In Spain virtually 100% of the population is covered by the National Public Health Service. The problem is, like everything in life, the National Public Health Service can only do so much. The population is aging rapidly. Life expectancy, even if it does not increase remains the same and it is very high, among the highest in the world. There is a very high rate of immigration due to the improved economy in recent years. What I mean is that the demand for health care is growing practically geometrically, while the offer does not. In Spain, many, many years ago and forgotten by many there was a dichotomy, public health / private medical care, it was almost like a stand off, I would say that private medical care was consider to be the personification of evil. That is, money should not be made from health. This idea is becoming something of the past and what is being done very sensibly is to make all the resources available to the people, regardless of legal ownership. They would be available based on the quality and services they offer.

It is true that, just like in the U.S. there is a certain percentage of the population, between 18% and 20%, that feel that public health care service does not provide the satisfaction they expect and take out additional health insurance policies that cover private hospital services. We are talking about around 8 million people in Spain who one way or another use private medicine. But it is also true that more and more the public sector uses private hospitals to meet the growing demand. Therefore it is a kind of mixed system. Something similar is happening in the United Kingdom as well. In the UK, which has a system similar to the Spanish one, the National Health Service, there is also a system of private hospitals. That is to say, the demand is so great that all resources have to be made available to the citizenship. Maybe we will reach a point, a not sure when, where there should be a guide like there is for other things. That is the person should have a guide that would allow him to choose, qualitatively, what his or her service should be. Today if you want to choose a restaurant, you know which one has three Michelin or CEPSA stars, or which hotels have five stars. Interestingly enough, this does not happen in hospitals. With regards to our most precious possession, our health, where should we go? God knows… but this too will come, for now, we are taking it step by step.

Could these be the reasons for the creation of USP?

USP started for a very simple and obvious reason. That is, in Spain there are more than 400 private hospitals but there was not chain of hospitals. It was an extremely fragmented field. At best there was a little chain of three or four hospitals but nothing substantial. That was our "eureka" moment: a chain of hospitals, with a good brand recognition, with synergy, and well connected. This morning we interviewed a woman who said: "I did not know you had a hospital in Vitoria. Of course, you are everywhere! I was looking for a pediatrician for my daughter who lives in Vitoria and I am a client of Dexeus, so, I go to Vitoria, start looking and realize they are the same as the ones in Barcelona." This is what we want, people who travel, whether you live in Barcelona or in Madrid or in Zaragoza, wherever, you have your USP hospital there.

You have your medical history and if you move, if you go to work somewhere else or take a trip and have an accident you know that the hospital that is a member of the chain will get in touch. That is there will be doctors talking to doctors and everything can be solved much more easily. As a result, your sensation of emotional welcoming will be much better than if you went to a hospital wondering who is going to to treat you and what they are going to do to you.

This is the concept: to create a homogeneous chain on a general basis. It is not easy but we are working hard on it, and we are going in the right direction.

How do you create a homogeneous brand, given the many of these centers already exist, have their own image and retain many of their professionals?

We do it by creating standardized product lines. Let me give you an example: we have created a line of product that we call 'sports medicine'. We are fortunate enough to have prestigious medical professionals in the field of traumatology and sports medicine in our hospitals. This is all very good but where do you go with that? How can you sell it? This is not Walmart, it is not easy to sell it. We must be creative and find formulas. We are trying to ally ourselves with sport clubs. For example, Donato, a player on el Deportivo de la Coruña team, one of the most outstanding football clubs in Spain, was injured. Although he is not a young player, and is about to retire, he is good for his age, and the injury was not a simple one. Our doctor in La Coruña, who treats all the players on el Deportivo de la Coruña said: "Mikel Sanchez, who is in Vitoria, has a very good special technique. He regenerates tissue that accelerates recovery". Rafa Riaza, the Coruña traumatologist accompanied the player to Vitoria where he was treated and now he is fully recovered. This sells, because you know what football is in this country, it has a great impact on the media and therefore causes imitation. So, people say: "Yes! Mikel and Rafa Arriza, or José Ramón Tatay treats the Athletic de Bilbao players, and if they are in Seville, José Ramón Tatay!" That is how we create our brand image.

Another example: I think that a well-spoken person can sell snake oil, but what is important is to sell examples. We have already inaugurated a women's health center in Murcia, sponsored by Dexeus Institute. The Dexeus Institute of the University of Barcelona has made its name especially in OBGYN (obstetrics and gynecology) and human reproduction. The Dexeus Institute has opened the Women's Health Center, which treats all female pathologies.

Another example: the design of a business line called 'Hospitur', which is the combination of the words hospital and tourism. Spain receives 50 million travelers and tourists a year, more than the total population of the country. Of these 50 million, some get sick, they do not get malaria, but they do have problems. Our hospitals are located in places that attract a high volume of tourism, travelers rather than tourists. Barcelona, Madrid, Seville, Marbella and Tenerife are all popular cities. We have reached agreements with the most important tour operators in the country and we have a network to serve. Many agencies inform their clients of our services in case they travel to Spain, to a particular area, and who want a reliable hospital. This is another business line we have. It is not easy. Remember that acquired hospitals that had their own character be it religious, medical, inherited and passed from hand to hand… each made its own rules. What we are trying to do is to organize these services based on what the market demands and then we try to get them into synch and connect them.

What is the common denominator of all these centers? That connection that you mention, does it include moving professionals within the centers of the group?

The management systems are very similar, what happens is that they are flexible and adapted to each market. The management systems are not different, but we understand that there has to be give and take and we must adapt to the market. As to mobility, some physicians go from one hospital to another. There are some in different hospitals that do things together.

R+D+I is still pending in Spain, and a key factor for successful businesses to lead the increasingly global and competitive markets. Where does USP stand?

Let's see. I would say one cannot sell snake oil, and therefore, our hospitals are the way they are. Research and development projects can be of two types: serious or not serious. Actually we do little research and development but of high quality. The Dexeus University Hospital Institute, one of the few University hospitals in Spain, has pioneered the field of human reproduction. We are leaders, and this is the result of the research and investigation process.

In Vitoria, Doctor Sanchez and his team, are leading Spain with their regeneration and tissue growth project. In fact, foreign doctors come to learn how it is being done.

We have a few things but within our possibilities. We must not forget we still are a medium size business. But we know that if we want to keep on growing we have to investigate to the extent that we are able.

Is the research carried out internally or do you collaborate with other national or international centers?

We are cooperating, even collaborating with other universities where joined projects are carried out, either regional, national, or testing with other countries. In fact, we have relationships with North American Universities. For example, in Coruña, our human reproduction service is directed by Professor Juan Alvarez who came to Spain two years ago from Harvard. He has continued collaborating with Harvard University and they are working together. That is, there are many examples. In fact, I would say that Spanish medicine has nothing to envy North American medicine.

The fact of the matter is - I am a technology lover- that the U.S. is very rich and has spent an enormous amount of money on its hospitals, its cathedrals, as I call them, of medicine. But here, in Spain, we have very good physicians. I could mention dozens, -I do not because I know I may leave someone out- who are world class and work in Spain, and some of them have been trained here.

You said that the Spanish Health Services are equal to, if not better, than the North American, however, its professionals are not considered in the same manner, in Spain they are seen as civil servants. Are North American doctors over valued or are Spanish physicians under valued?

When we deal with physicians, I think this is a difference we spoke of earlier, we try to make doctors aware of business issues. That is, Spanish doctors have evolved as follows: they have gone from being almost God like, with only a few extremely important nationally recognized figures, who were leaders in the society we lived in, to being overcrowded. There is such a huge supply of physicians that they have become civil servants. What we aim for is something more. We know that there comes a time in life when one progresses, matures, evolves, and wants to improve. I am an executive, but there comes a time when I want to be an entrepreneur, make my own decisions and take my own risks. Doctors do the same. We try to make them into businessmen. We help them become businessmen. We make collaboration agreements between the hospitals -business company and physician businessmen and we make strategic alliances. In some cases these are already established and we invest jointly. This is one of our company's greatest strengths: strategic alliances that we make with physicians. This allows us to incorporate prestigious physicians; physicians that have grown tired of public hospitals, where they are no taken into account and have initiative that they can develop with us. This is one of our great advantages. In fact, this is readily demonstrable: if we could compare the physicians there were when we started with those we now have, we would see that the volume has increased, not only in number but also in prestige. In no way does this suggest that those we had were bad. We have been very fortunate and have purchased hospitals with magnificent professionals, but we have also attracted new ones and this creates a very interesting competition.

How are new technologies in the Health Industry changing the way you work?

This is basic. I believe technology is fundamental. For example, in some cases, in our laboratories, we are already sending results, via electronic mail. Now we are trying to do the same with image technology; that is, sending X-ray images by cable. This even allows us to optimize resources. We have three hospitals in Madrid with image diagnosis services. Each one has people working there. You can create a pool of excellence where people receive the images and interpret them, whilst in the hospitals the only thing that need to be done is the procedure and nothing else.

The future could be in on-line hospitals, in the widest sense of the word. We have already seen developments like telesurgery, nanotechnology, etc…

…Office visits yes. This is already being done, but it does not go any further. That is, a hospital requires touch, physical contact, and the Internet is only virtual. I do not know if it is because I cannot imagine the future but I do not think it is possible. I have seen interesting projects, videoconferences where you can see the patient but it is not the same.

A neurosurgeon friend of mine, from his sail boat in the Mediterranean, here in Spain, did remote surgery from the sail boat, I was with him, I saw it. This is done in Spain and not in other advanced countries.

Getting back to USP, what is the key factor in USP's success?

I still think that the human factor is very important. Every six months we do surveys. The standard questions, to me personally, are not valid. I call them 'Stockholm Syndrome surveys', bearing in mind that the patient is in the hospital when he does the survey and says: "I am going to praise everything because they still have not released me, or I might have to come back". In these surveys that can last up to an hour, we ask them about everything: how they have been treated, how they have been admitted, the medical attention, the nurses attention, the cleanliness of the hospital, the room…. The main objective is to improve. It is all well and good that they say we are fantastic, that we do a good job, but we like to know where we fail in order to improve.

Yes, surveys are fine, but, what is your ability to react and how important is the information compiled?

We are quite fast, but we like to do things fairly. That is, if a given nurse or doctor is criticized is not valid for us. Now, if it is a set of criticisms what we do is to find out what is actually happening. Many things can happen: that the person involved is going through a bad period, that he/she is dissatisfied, etc. We evaluate the causes before making a decision. We try to be fair. We think that in order for patients to be well assisted, the staff who deal with them have to be satisfied, because if not the patient suffers. Something we cannot accept is incompetence.

Are you going to expand? Are you going to other countries?

We have had a natural evolution. That is, when we started we needed a certain critical mass to grow and were less rigorous about our acquisitions. In no way does this mean that those we acquired in the past were bad. Today we are stricter and we demand more from each acquisition.

What do I think of USP's future? I would say that in Spain we are halfway there, we are half the size this company should be. We are trying to approach a country like Portugal and we might approach some other Southern European country. If Spain is a country with an astonishing array of markets, imaging what Europe could be like. We are talking about Europe, where Germany has nothing in common with Belgium; Belgium has nothing in common with France, and France has nothing in common with Portugal. So, we would like to approach countries with customs similar to our own.

In any case, what we are never going to do is dabble. That is, buy hospitals in Germany one day, and in Belgium the next. When we invest in a country we do so to stay there for good. That is what we are doing in Portugal.
Firstly we make acquisitions, we settle in, we become familiar, and we progress. And If we progress then we look at the possibilities of building. In Spain, up to now, we have not built anything.

You are telling us about the homogeneity of USP, how do you manage to change the image of the acquired centers? How do you transmit your main values if most of the professionals stay on?

You can change the image in many ways. First simply by the acquisition itself; taking advantage of the momentum and the attention not only of the media but also of the community, creates the image. Secondly, once you have made the acquisition, you must invest and improve the facilities if the hospital is not in good shape, you must make repairs. This alone increases the market's perception that the hospital is changing. You have to work with the staff, giving them a new client attention project, and then, you must work on day-to-day issues, on the corporate image, and on the media.

And what about the staff? Are the people who work in the centers also projecting the image of the company?

Yes, look at Madrid. We have bought a hospital here and what we want is that each time we incorporate somebody, they stay on until the last day. But, as in any other company, there are people who fit in and people who do not. There are people who do not fit into the organization and there are people who do not like it, this is a fact of life. Nevertheless, the degree of integration into the company is very high.

What are USP's values?

I would say rigor, professionalism, humanity -which is a word that I do not like much but it is hard to find another- and accessibility.

In closing, what would you say to readers of the New York Digital about Spain?

I would say Spain is a wonderful place to life, in every sense of the word. It is a calm, pleasant, comfortable, technologically very advanced country -much more than people think- with an excellent health care system and USP is a part of the country's excellent system and is trying to be a leader in this industry in Spain and in other countries as well.