Although unwilling to provide figures and a specific number of projects, companies in the medical service business are still among the most active in the entire economy and every single one of them expects growth. This has also been the case over the last few years, during which the industry, still young and estimated at EUR500 million, witnessed both new openings and acquisitions.
“Other than the MedLife Floreasca hospital (an over EUR10 million investment i.e.), there probably won’t be any more major investments next year,” says Mihai Marcu, chairman of MedLife, the largest company on its market by revenue. “We do not rule out investments, acquisitions or development, if interesting projects come up. We know the market well and we’re waiting to see how the new hospitals go; if they do well, we will probably step up acquisitions or investments.”
The company expects EUR49 million revenue for this year, and will use several budget versions for 2012, starting from a gross domestic product stagnation, a growth below 1.5% and a 4.4 lei to euro exchange rate.
This year’s investments include an EUR13.5 million pediatric hospital in Bucharest, cosmetic dermatology clinic in the same city, an over EUR10 million investment in Brasov (central Romania) where a 60-bed private hospital was opened and the acquisition of Eva clinic, which the company says is the largest maternity clinic in the region. MedLife also bought 55% in Genesys Medical Clinic in Arad (Western Romania) and its officials anticipate “relaxation” in this department in 2012.
Medicover, too, is getting ready to open hospitals after investing EUR20 million in a hospital in northern Bucharest.
“We expect turmoil in the economy, which may impact purchasing power. We have plans to expand by new lines of business both in Bucharest and in the region,” said Catalina Balan, general manager of Medicover Romania.
The company is almost done building its 2012 budget. According to the latest available data, it had budgeted EUR30 to EUR35 million revenue this year (together with the Synevo lab division it operates).
Regina Maria, a company that went through a number of changes this year, both in terms of name (it had previously been known as Centrul Medical Unirea – Unirea Medical Center) and staff (its deputy general manager Sergiu Negut left) now has two 2012 budget versions. The most pessimistic scenario is built around a 10%-15% growth.
It is getting ready to open an ob-gyn hospital in 2012, develop infertility treatment services, as well as hospital services outside the capital city. It also had a very active 2012 in terms of openings.
“We are working on [an assumption of] only 2% growth for Romania and also have a pessimistic scenario for when decline resumes,” said Fady Chreih, chief executive of Regina Maria network. The company expects growth of either 20% or 10% to 15% depending on which scenario plays out.
Regina Maria is controlled by investment fund Advent International, while the founder, Wargha Enayati retained 20%.
The company expects 2012 to be difficult macroeconomics-wise, for which reason it does not see growth of private healthcare market, Fady Chreih said, adding Regina Maria was not considering acquisitions but organic growth.
One of the few businesses in this sector still entirely held by Romanian entrepreneurs, Gral Medical, controlled by Robert and Georgeta Serban is considering aggressive growth in 2012, but will not provide any details about it.
Expansion is also what Anima is considering, while another, smaller company, Medsana, says it is “cautious” with making forecasts.
“We are taking into account similar growth to 2011, about 10%,” said Vassilis Chaniotis, general manager of Centrul Medical Medsana.
The companies ZF has talked to say they have their reservations about the new healthcare law, that it has not been completed yet but that they are ready for it.
A bill intended to reform the healthcare system is on the finishing strait and its main novelty will be the creation of private health insurance houses. The current system has the contributions paid from people’s wages managed by the state-run National Health Insurance House, while the new bill redirects the funds to the private health insurance houses, which will sign contracts with hospitals and physicians.
Also about to be implemented is the co-pay, which entails out-of-pocket payment for certain healthcare services.
“(The new law) will come with very high electoral costs and I don’t know whether they’ll see it through. Secondly, I think it is not yet clear who does what: the CAS (health insurance houses i.e.) and the CSA (Insurance Supervisory Commission). There’s still a lot of work to do,” said MedLife’s Mihai Marcu.