The American George Washington University Medical Centre (GWUMC) in Washington and the Semmelweis University of Medicine (SOTE) in Budapest agreed to embark on a formal collaboration to establish an American Hospital (AH). The Hospital will be built in Budapest, but not only for Budapest. The hospital’s vision is to become the premier referral centre for Central and Eastern Europe. The hospital will be established as for-profit institution using standards of patient care and management consistent with those used in the United States. The success of AH critically depends on finding the optimum combination of three factors: location and architectural value, the mode of operation and the way AH will try to reach out to clients.
AH will be centrally located, perhaps - but not necessarily - somewhere in the hospital district of Budapest. The number of potential clients is estimated between 200 and 250 thousand. These figures include both Hungarian and foreign citizens with permanent residence in the town of Budapest and Pest county, but do not take into account tourists, business travellers and potential patients arriving from the neighbouring countries through referrals. This volume could justify a capacity of 150 beds, which can be constructed for an estimated M$ 17-18. From the 3rd or 4th year, when AH will operate with full capacity, it should be able to generate M$ 20 sales revenue per annum.
At least for an initial 5-10 years, maximum effort should be made to run AH as independently from the Hungarian rules and habits, as much it is possible. Isolation is indispensable for the following purpose:
to assure full emotional commitment of the staff,
to minimize corruption, and the impact of suppliers
to remove the incentives to “doctor” financial and medical reports.
Isolation from the Hungarian health care system should not result in autarchy. Quite clearly, the AH will have to buy medical and other services from Hungarian suppliers. Contracting and purchasing should be based on the principle of competition. Intense competition among suppliers is the best policy of quality assurance.

The preparation of the pre-feasibility study required long research and analyses work, as well as frequent consultations with the stakeholders, the Medical Universities.

During the elaboration phase, the following steps were implemented:

• studying the lessons of PPP (Public Private Partnership) models
• understanding the failures of previous similar attempts in Hungary
• understanding the financial system of Hungarian hospitals
• finding the right business model of the new hospital
• looking for suitable location(s)
• determining the right size and scope of the new hospital
• financial planning for years 1-5 of operations
• preparation of alternative business plans.

The provided advisory was also based on the multi-year health care experience of EUROPE Ltd gained through its consultancy to the Municipality of Budapest, which is the owner of over 30 integrated hospitals.