Francesco De Meo is in no danger of being mistaken for a typical German chief executive.
The boss of Europe’s largest private hospital group, Helios, proudly sports tattoos dedicated to his eighth and ninth children on his knuckles, and an inked version of Hieronymus Bosch’s famous triptych The Garden of Earthly Delights peeks out from beneath a green T-shirt.
The former lawyer’s maverick streak is not confined to his appearance. Even as Helios has found itself at the centre of the continent’s Covid-19 crisis, the 57-year-old — whose dogged pursuit of takeover targets helped build a business that serves more than 21m people a year — has become a thorn in the side of the medical establishment.
The Fresenius-owned company, which runs 140 hospitals across Germany and Spain, and hundreds of smaller care centres, has treated more than 37,000 coronavirus patients since the first wave of infections hit Europe in February. But while other private groups have talked-up their role in combating the disease, Mr De Meo believes panic-stricken governments have made some decisions early on that have caused more harm than good.
“At the beginning of the pandemic, there were some statements from politicians saying private hospitals wouldn’t provide Covid services, because there’s no profit,” he says. “But they were completely wrong.”
Soon after, companies such as Helios in Germany were paid to postpone all elective procedures in order to keep beds free for Covid-19 cases, a decision Mr De Meo decried as “fear-driven”.
This departure from received wisdom was entirely in character for the former competitive cyclist, who has made a career out of pursuing unpopular positions and projects. Mr De Meo’s unlikely journey to the top of one of Europe’s largest enterprises began in a small Swabian town near the Black Forest, where he was born to a German mother and an Italian father, who had moved north to “live the German dream”.
While his father toiled as a tailor, then a factory worker, and his mother supplemented their income by being a seamstress, Mr De Meo and his sister quickly became “accustomed to work”.
Aged seven, he began doing odd cleaning jobs, and a daily paper-round delivering the local Schwäbisches Tagblatt, which began at 4.30am and finished just before the start of the school day. “I worked more than I work today,” Mr De Meo recalls, adding that the role also provided him with an early business lesson.
Spying “synergy potential”, Mr De Meo’s father urged the young Francesco to deliver several titles at once, and ask customers if they would like the Bild am Sonntag newspaper — at that time sold primarily at newsstands — delivered on the weekend, on credit.
Their scheme was a commercial success, but Mr De Meo's initial ambitions were in law. “I liked the negotiation part, but I didn’t like litigation very much,” he recalls of his early career. When a colleague showed him a job advert for a pensions consultant, he applied and was soon hired.
His unenviable role was to convince large, sclerotic German companies — including Deutsche Telekom, Siemens and Deutsche Bahn — to change their pension schemes from defined to contribution-based plans and to persuade powerful works councils to embrace the shift. Being perceived as an outsider helped Mr De Meo broker several such agreements and he eventually decided to open his own consultancy firm. But before he could do so, he was headhunted in 2000 by Lutz Helmig, the founder of Helios.
A former surgeon and privatisation pioneer, Mr Helmig, who had started Helios with four clinics, was having trouble negotiating with unions — an area in which Mr De Meo had amassed expertise.
Mr Helmig also charged his “consigliere” with aggressively pursuing acquisitions, but the company found it hard to expand as capital markets were reluctant to sink money into restructuring underperforming hospitals.
Nonetheless, Helios’ sales reached €1.2bn by 2005, when it was sold to healthcare group Fresenius. In his first management meeting at the Dax-listed business, Mr De Meo — who stayed on because he saw further opportunities to grow Helios — wore a baseball cap.
The triathlete and Iron Man challenger’s unorthodox approach proved fruitful. A takeover of German rival Rhön-Klinikum succeeded on the second attempt, alongside a string of smaller purchases. In 2016, Helios acquired Spain’s largest private hospital operator, Quirónsalud, for almost €6bn from private equity group CVC Capital Partners and founder Víctor Madera, whom Mr De Meo says he won over with his “personal history”.
Good relations with Spanish colleagues — Mr De Meo learnt the language — came in handy at the end of February, when upon returning from a trip to Madrid, he heard about Spain’s first wave of Covid-19 admissions.
“There were some days we had to look for ventilators, for beds . . . there were so many patients coming in,” he says.
The company’s response to the pandemic was run from Mr De Meo’s kitchen table in Frankfurt, surrounded by five children under 13, all being homeschooled because of the lockdown.
The group, which had a pre-existing pandemic plan, eventually sent ventilators from Germany to Spain but “it was late”, he admits. “We were not prepared” for such an influx in Spain, which has roughly a third of the intensive care beds that Germany has, Mr De Meo says. A shortage of ambulances became apparent and Helios even began to sterilise masks, as personal protective equipment stocks became rapidly depleted.
Via Zoom, Mr De Meo reassured staff and liaised with local managers until Helios was “able to cover what we needed” to provide for Covid-19 patients.
Provisions have since been boosted. In Germany, Helios prepared plans to add another 1,000 intensive care beds, on top of the 1,300 it already has. But as infection numbers in the country reached record highs, some hospitals suffered capacity constraints.
In areas with excess capacity, elective procedures are now allowed, but Mr De Meo is deeply critical of the decision to discourage such care in the first wave of the pandemic — which Helios said cut some cancer treatments by a fifth.
Three questions for Francesco De Meo
Who is your leadership hero?
I do not believe in a heroism concept of management. It is more a leadership setting on personality, team spirit, emotional expertise and professional communication. Thus, there is no hero in my mind. If there was one, the most nearest to my idea of leadership would have been Steve Jobs.
If you were not a CEO/leader, what would you be?
I would be a writer.
Perhaps on short stories, maybe a crime writer, and for sure a blogger.
What was the first leadership lesson you learnt?
To be clear in my wording, in order to limit any misunderstanding
A longstanding advocate of commercialised healthcare who believes Germany — which has approximately 1,800 hospitals to Britain’s 1,200 — has too many hospitals, Mr De Meo claims that in its first phase, the coronavirus pandemic would have been better tackled with fewer, more efficient sites and “without spending so much money”.
Beyond the current crisis, Mr De Meo — who wants to stay on at Helios once his term expires this year — plans to expand the company into other parts of Europe and Latin America.
But privatising hospitals in the wake of a pandemic, he admits, will be a tougher proposition.
“A lot of politicians are completely afraid about that kind of discussion,” he says. “No politician wants to live in a region where they had to close a hospital or even a birth department . . . it doesn’t help you if you want to be elected.”
In the interim, Helios will focus on expanding its digital services, including the app-based Curalie service.
“We believe that cost reduction, efficiency and quality go together,” says Mr De Meo, who brands himself a “handshake guy” and finds social distancing a challenge.
Some doctors and nurses, he admits, “will not like [efficiency measures] because it changes their world, but it helps the patient”.
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