Post on 21-Mar-2016
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© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 24, 2023 1
Market AssessmentOverview of the Greek Hospital Market
Market Assessment
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 24, 2023 2
Acute Hospitals Market, Greece
• The client was one of the leading private equity investment firms considering investing in hospitals in Greece
Client
• The client wanted to evaluate an investment opportunity in the acute hospitals market in Greece and engaged SGS to assess the market potential of the same
Client Ask
• Undertook exhaustive desk research and collected credible information from authoritative sources for market size, competitive landscape and market trends
• SGS analyzed the Greek hospital industry thoroughly using primary and secondary research techniques • Key indicators such as healthcare spending, bed to population ratio , occupancy levels were derived and taken into account to arrive
at the market size• Key insights on the pillars of healthcare system in the country, namely, government body, social insurance funds, healthcare service
providers, and individuals and employers were studied and their implications on healthcare spending were analyzed• The hospital bed supply shortfall was estimated for the future period• Regular updates were provided to apprise the client of the results
Sutherland’s Solution
• Based on the findings of our research, the client got an overview of the operational and profitability metrics of Greek hospitals in order to make a well-informed investment decision
• The report helped the client gauge the existing capacity of the acute hospitals in Greece and the time frame in which a paucity of hospitals beds would occur
•Benefits to the Client
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 24, 2023 3
% CAGR (2000-’07)
5%
4%
€ 7.8 bn €7.0 bn €7.4 bn €8.8 bn €8.9 bn €7.1 bn €9.2 bn €9.9 bn
Greece has very high levels of private healthcare spending owing to poor public healthcare infrastructure
• Private contribution to healthcare expenditure in Greece remains inordinately high
• Public healthcare spending as a percentage of total healthcare has declined from 75% in the early 90’s to 50% in 2007
• Poor quality of public healthcare services and elongated lead-times associated with public healthcare services has given a boost to the private sector
Greece Healthcare Spending
Source: National statistics, SGS research Note: Data has been randomized
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 24, 2023 4
42 46 48 47 47 48 49 50
214 215 216 217 220 221 222 223
1999 2000 2001 2002 2003 2004 2005 2006
Private Hospitals Public Hospitals
Though number of hospitals have declined over the review period, beds per hospital have increased
• Number of small private clinics have decreased significantly post 1990s owing to:
• Low utilization and high operating costs
• Inability to cope with competition from larger hospitals with better technology
• More than 40% of the planned medical positions have remained unfilled in public sector owing to low salaries, fewer opportunities for private practice and
abandoned living standards in rural areas where majority of hospitals located
Number of Hospitals – Private vs. Public Beds per Hospital – Private vs. Public
Source: SGS estimates, OECD Note: Data has been randomized
Key Observations
133 132 135 137 132 136 136 138
112 115 114 116 117 117 115 115
1999 2000 2001 2002 2003 2004 2005 2006
Private Public
% CAGR (1999-’06)
0.01%
-0.2%
% CAGR (1999-’06)
0.1%
1.2%
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 24, 2023 5
102 103 104 105 106 107 108 109
121 120 123 126 127 128 129 130
220 222 225 226 227 240 245 250
115 116 117 118 119 119 120 12147 48 49 50 51 52 53 5432 33 34 35 36 37 38 39
1999 2000 2001 2002 2003 2004 2005 2006Greater Athens Macedonia PeloponnisosThessalia Kriti Rest of Greece
3.1 3 3.2 3.3 3.4 3.3 3.2 3.12.1 2.2 2.3 2.3 2.4 2.5 2.6 2.74.3 4.4 4.5 4.4 4.6 4.7 4.8 4.82.3 2.4 2.5 2.6 2.7 2.5 2.4 2.31.1 1.2 1.3 1.4 1.5 1.5 1.6 1.60.1 0.2 0.2 0.3 0.3 0.4 0.5 0.6
1999 2000 2001 2002 2003 2004 2005 2006
Greater Athens Macedonia PeloponnisosThessalia Kriti Rest of Greece
Per capita availability of beds is higher in urban regions; developing regions are witnessing above-average growth
• Capacity has been concentrated in urban cities but recent expansions have taken place in other regions (Rest Of Greece). Rest of Greece witnessed highest
compounded growth rate of 4.66% for beds per thousands population between 1999-2006
• Thessalia has witnessed very high growth in inpatient numbers but only a modest growth in supply and could be a region with bright prospects
Beds per Thousand People Inpatients per Thousand People
Source: SGS estimates, OECD Note: Data has been randomized
Key Observations
CAGR (‘99-’06) Greater Athens Macedonia Peloponnisos Thessalia Kriti Rest of Greece
Beds/1,000 population -0.28% 0.99% 0.47% -0.72% -0.72% 4.66%
Inpatients / 1,000 population 3.54% 3.14% 2.88% 5.73% 3.05% 2.98%
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 24, 2023 6
Primary pillars of the Greece healthcare system
Four Pillars of Greece Health-care
Three main body: Ministry of Health and Welfare, Ministry of Labour and Social Affair and Ministry of Finance
Controls following healthcare aspects:
Hospital Infrastructure: hospital budget, number of personnel with specialty, salary levels, number of beds and purchase of technology
Social insurance funds: financing funds, defining industry specific funds, range of benefits offered by each funds, contribution rate, types of providers and allocation of doctors for funds
National Health Service (NHS): Governed by Ministry of Health and Welfare
Employs physicians and operates hospitals primarily in semi-urban and rural areas
IKA primary care: Significant presence in urban area
Private players: Private hospitals and private doctors either work independently or contracted by social insurance funds
Governed by Ministry of Labour and Social Affair
Institution of Social Insurance (IKA): Urban population (50% of total population covered)
Organization of Agricultural Insurance (OGA): Rural population (25% of population covered)
OPAD: Civil servants (7% of population covered)
TEVE-TAE: Fund for merchants and small businessmen (13% of population covered)
Individuals contribute to social insurance funds through payroll tax and general tax
They also pay out-of their pockets as a part of co-payments (like 25% of prescription drugs)
Employers contribute to the pool of employee – employer contribution and pay to social insurance funds
It also provides group private medical insurance to avail services at private hospitals
2. Healthcare service providers1. Government Body
3. Social insurance funds 4. Individuals and Employers
Source: SGS research
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Drivers influencing healthcare industry
Drivers Impact Explanation IndicationIncreasing per capita disposable income
Increasing per capita disposable income will boost private healthcare spending
Number of people who can afford private healthcare services, increase
Per capita disposable income has increased at CAGR (’03-’07) of 10.4%
Ageing population with higher life expectancy
Ageing population will require higher healthcare services
Need for elderly homes and rehabilitation centers will be more, where private players like IASO, AMC, Hygeia and Euromedica are not operating
Percentage share of age group 65 and above will increase from 20% in 2010 to 33% in 2050
Public private partnership in healthcare
Government’s move to introduce public private partnerships into healthcare industry will increase investments, reduce bureaucracy and expand beds / hospitals capacity
Announcements of one Oncological and one General hospital
PPP in healthcare budgeted at Euro 1.5 bn
Lifestyle: prone to increase diseases
Higher proportion of people having daily smoking habits and eating habits to consume heavy fat food will increase chance of chronic diseases
Highest daily smokers amongst OECD and 21.9% adults are classified clinically obese
New avenues like spa and medical tourism are on rise
Improved healthcare capabilities along with attractive tourism locations put Greece in a better position for medical tourism
It has been successful to attract patients from developed European countries like UK and Germany
Euromedica acquired facilities in Rhodes and Kriti for medical tourism
Note: Data has been randomizedSource: SGS research, OECD
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By 2011, hospitals in Greece are estimated to witness a shortfall of ~8%
Note: Data has been randomizedSource: SGS research, OECD
Beds – Available vs. Required
Year 2008 2009 2010 2011
Sustainable utilization 55% 51.30% 50.50% 50.07%
Estimate Utilization 60.60% 60.50% 60.30% 60.20%
Available Hospitalization days (At sustainable capacity)
13,134,362 12,324,259 12,222,569 12,569
Required Hospitalisation days 15,142,333 15,222,356 15,326,666 15,365,996
Hospitalisation days needed 20,203,336 20,333,256 21,597,444 21,899,789
Available Bed 43,821 45,621 46,952 48,936
Required Bed 48,859 49,550 51,523 53,012
Additonal Capacity Required 5,038 3,929 4,571 4,076
489 496 515 530
438456 469
48920%
24% 24% 26%
0
100200
300
400
500
600
2008E 2009E 2010E 2011EBed
s (in
Hun
dred
s)
Required beds Available beds Gap as a % of Available