Vithas: the second private hospital operator in Spain, with the vocation of being the first

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On December 15, 2022, within the series “Breakfasts with health sector leaders“, organized by Roland Berger, a breakfast with Pedro Rico, General Director of Vithas, took place.

A summary of the breakfast content is as follows:

The origins

The Vithas group was officially presented on November 21, 2012, now celebrating the 10th anniversary of its origin. At that time, the group had 1,000 beds in 10 hospitals located in Madrid, Vigo, Alicante, Almería, Granada, Málaga, Lleida, Vigo, Vitoria, Las Palmas and Tenerife. Regarding its billing figures, the group reached 196 million euros.

At the beginning, the property was owned by the Goodgrower Group, linked to the Gallardo family, which held 80% of the shares and Criteria, with 20%. Subsequently, Goodgrower acquired the participation of Criteria, going on to hold 100% of the shares. From the beginning, the Presidency of Vithas has been in the hands of Jorge Gallardo Piqué.

A growth story

In 2014, Vithas incorporated the Xanit Internacional hospital (Benalmádena).

This same year, the Vithas Salud centers were created, designed as local specialty centers without hospitalization, and the Vithas Salud Fisium centers were incorporated in the province of Pontevedra.

In 2015 the group signed a strategic agreement with the Juaneda Assistance Network (Baleares). That year the new Vithas hospital was inaugurated in Granada and the five centers of the Rincón Clinics in the province of Malaga were acquired. The Lema and Bandín laboratories joined the Vithas group, renamed Vithas Lab.

In 2017 the expansion of the group gained new impetus with the acquisition of the 7 hospitals that made up the NISA group. This operation, together with the hospitals of Almería and Málaga and the shareholding agreement with the Juaneda Assistance Network, positioned Vithas as a leader in private healthcare throughout the Mediterranean arc

Growth continues in 2018 when the group takes another step towards the incorporation of highly specialized centers such as the Eurocanarias Ophthalmological Institute.

In January 2020, the group acquired the emblematic La Milagrosa hospital, located in the center of Madrid, consolidating the group’s presence in this city, where it already had two other hospitals, 1 specialty center and Vithas Internacional.

Vithas during the pandemic

During the pandemic, the group is 100% involved in patient care and actively collaborates with the authorities to deal with the health crisis, of course applying the corresponding internal protocols to ensure the safety of professionals.

It is worth highlighting two relevant initiatives in this field: the so-called Aerobox, a portable device for individual isolation of patients that prevents the transmission of the virus; and the solidarity project with other companies and institutions to develop OxyVita, an efficient and low-cost emergency ICU ventilator, which has been made available to all hospitals and health systems in the world in open source and free of rights.

Digital transformation as an integration tool

Since January 2020, the group has been promoting its digital transformation through the implementation of a new IT tool.

The idea is to overcome the old pre-existing hospital culture and move towards what is called Vithas one, in such a way that it has:

  • unique data
  • Single electronic medical record
  • single database
  • A centralized contact center

The will to create a centralized access for patients, gave rise to the launch in 2020 of a centralized contact center, as a high-performance center, where more than 120 operators work, understood as a strategic pillar of quality improvement. , recruitment, loyalty and customer satisfaction.

Impulse to Vithas diagnosis

In 2020, Vithas Diagnosis was launched, with an offer in clinical laboratory, imaging and pathological anatomy, with the idea of centralizing all of the company’s diagnostic activity and, at the same time, providing services to third parties.

My Vithas

This project tries to build the foundations of the digital experience for Vithas patients, incorporating the web and an app.

The result by 2022 is that there are already 669,034 digital users and 631,749 online appointments have been managed. At this moment, 14.6% of the group’s transactions are online.

New projects

Vithas’ desire for growth continues in 2022 with the construction of a new hospital in the province of Barcelona (where until now it had no presence), and another hospital in the south of Valencia, the third in this city. Both will mean a joint investment of more than 90 million euros.

During 2022, the Vithas Salud Gibraltar and Vithas Salud Alzira centers were inaugurated, as well as the expansion of the Vithas Madrid Arturo Soria surgical unit and the completion of the expansion of Vithas Xanit Internacional, which doubles its care capacity on the Costa del Sol.

Mainstreaming of specialties

This work was preceded by a definition of the Clinical Care and Governance Model of the strategic specialties.

After the launch of the Vithas Cardiovascular Institute, the Vithas Neurosurgery Unit and the Vithas Oncology Institute were created, adding to all the existing benefits a transversal and comprehensive assistance service specialized in each of these three major therapeutic areas.

The idea for the future is to boost the growth and activity of the institutes in operation and to promote research, as well as to continue with the territorial expansion of the Institutes model.

A great concern for quality

Quality is the central axis of the entire Vithas strategy. Apart from accreditation by the Joint Commission International, the patient experience is a core element of the “Vithas culture“. There is a Director of Patient Experience.

Vithas people

Based on the confirmation that professionals are the most important asset of Vithas, the aim is to promote a patient-focused organization that cares for its professionals.

For this, the approach is to offer future projects, internal promotion, training and recognition policies, with specific training plans (eg, IESE executive leadership, Master of Nursing).

Vithas’ university vocation

As a sign of its commitment to the training and development of healthcare talent, in November 2022, the three centers in Madrid (Vithas Madrid Arturo Soria, Vithas Madrid Aravaca and Vithas Madrid La Milagrosa) are accredited as university hospitals.

Vithas and research

As a sign of concern for research, the Vithas Foundation is promoting scientific publications, with an impact factor that grows every year, as well as conducting commercial clinical trials, the number of which also increases every year.

The “new” Vithas

During this time the appearance of Vithas has completely changed, the number of beds, ICU positions, internal consultations and surgical interventions have doubled; the volume of business, professionals and operating rooms has tripled; and the number of centers and patients attended has quadrupled.

But, apart from these quantitative data, there are other qualitative ones, no less important:

  • Concern for quality and patient experience
  • The promotion of the university character and teaching and research
  • digital transformation
  • The integration process of differentiated cultures
  • The “mainstreaming” of specialties, through the Institutes
  • The offer of a growth project to its professionals

That is why it is not hyperbole to speak of a new Vithas.

HM Hospitales: how to go from one hospital to 20, while maintaining the character of a family business

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On October 3, 2022, a breakfast with Juan Abarca Cidón, President of HM Hospitales, took place as part of the series “Breakfasts with health sector leaders“, organized by Roland Berger.

A summary of the breakfast content is as follows:

The origins

It all started thanks to the drive of Dr. Juan Abarca Campal, a visionary surgeon with a great passion for caring for the sick; who, in collaboration with his wife, Dr. Carmen Cidón Tamargo, more focused on management, promoted the creation of the San Pedro hospital, later renamed HM Madrid, in the Plaza Conde del Valle Suchil.

This hospital made it possible to establish the seeds of the vision of what would later be the HM Hospitales network. It meant a revolution in terms of the ways of doing private medicine in Madrid at that time, based on the freedom of prescription of the doctor of studies and treatments and the co-responsibility of clinicians with the hospital. Let us remember that in the private hospitals of the time the doctors would operate in the afternoon and there were no emergencies.

A large part of the processes were subsequently designed over the course of 18 months by Juan Abarca Cidón himself at the Hospital de Montepríncipe, the second hospital launched, where he began his management journey in the Group.

Key elements of the vision

  • Hierarchical hospitals, with a department head in charge of the medical specialties, in contrast to the “open” model, in force until then in private hospitals
  • Emphasis on quality (Montepríncipe was the first Spanish hospital with ISO accreditation for the entire hospital)
  • Hospital organization based on medical directors, with territorial directors
  • Highest level of synergies, both healthcare and corporate
  • All the hospitals work in a network, both locally (in each of the four networks that the Group currently has) and nationally
  • Facultative Board, in all hospitals
  • Computer integration, with a single medical record
  • Teaching and research vocation, in order to attract talent
  • HM Institute, to promote training for medium and higher grade sanitary technicians
  • HM Hospitales research foundation, although HM tried to present itself to be a Research Institute recognized by the Carlos III Health Institute, they were not authorized because it is a private group

A growth in network

A very original element of HM Hospitales is that they do not have hospitals scattered throughout the territory, but rather a network growth. At this moment they have four networks: in Madrid, Galicia, León, Barcelona and Málaga, as seen in the following diagram:

 

Comprehensive centers

Another originality, from the private sphere, is the promotion of comprehensive centers, which group the entire set of resources around diseases or highly prevalent care needs.

Currently there are four comprehensive centers:

  • Comprehensive Center for Cardiovascular Diseases (in Madrid and Barcelona)
  • Clara Campal Comprehensive Oncology Center (Madrid and Barcelona)
  • Integral Center of Neurosciences AC (Madrid and Barcelona)
  • HM Fertility Center (Madrid)

A new commitment to eye health has recently been made, launching the HM Eye Center.

The residences

The Group has 5 residences. The objective is to facilitate continuity of care.

Transparency as a value

A very striking characteristic of HM hospitals, and exceptional among private Spanish hospitals and even among public ones, is the publication of their results on the web, both in terms of activity and incorporating some quality indicators.

Their records have allowed them to have a centralized database of COVID patients, which they have made available to society.

Some facts of interest

The Group’s second hospital was the Montepríncipe hospital, a complete success, reaching 5,500 deliveries. Subsequently, together with the Torrelodones hospital (the 3rd in the Group, opened in 2003) they reached 7,000 deliveries per year.

The San Francisco Hospital, in León, is the only private hospital in Spain with its own bone and tissue bank.

The Group has more than 600,000 emergencies.

A very notable investment (9 million) was made to provide an animal facility for Dr. Obeso’s research team, at the Integral Center for Neurosciences.

The clients

HM has 92% of its patients coming from insurers, fleeing from the public tender.

The new projects

After 16 years of collaboration with the CEU, they have recently changed their university partner, starting a new project with the Camilo José Cela University, with the aim of having their own university in health sciences. They already have MIR in 9 specialties. The Group also has an agreement with Chile and Colombia to train nurses, doing the last year of their studies in  hospitals of the Group. Teaching and research are part of the DNA of HM Hospitales.

In Rivas (Madrid) HM Hospitales will soon open a hospital with an attached residence.

The internationalization of patients

HM through HM International, another Group company, attracts patients from other parts of the world, particularly from Eastern European and Arab countries.

Some elements on the philosophy of the Group

The philosophy of HM Hospitales is:

  • 1st. First things first, the patients. Offering them the best care is the main objective of the Group
  • 2nd. Have fun and add value to society, trying to improve it
  • 3rd. Earn money, for the freedom it offers

Within this last point, in 2020 they billed 600 million euros, of which 60% was in Madrid, where 85% of EBIDTA is obtained.

7 days in healthcare (July 18th-24th, 2022)

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Summary

From the point of view of Biomedicine, it is worth highlighting the finding published by “Science” that in covid the continuous appearance of variants is the new normality, but the appearance of a totally new variant cannot be ruled out. We must also highlight the very promising advances published in the treatment of the most aggressive form of breast cancer (the triple negative form) by a group of Spanish scientists, led by Javier Cortés.

As far as Global Health is concerned, it is worth noting the efforts of the WHO to establish 2030 as the year of elimination of viral hepatitis, which produces more cases and deaths per year than HIV. The covid pandemic has produced a global decrease in vaccination in children.

Regarding international health policy, the WHO declares monkeypox an international public health emergency. New waves of extreme heat are expected.

If we talk about national health policy (Spain), with 3,125 cases, Spain leads the cases of monkeypox in the world. As for covid, there is a peak in admissions to the ICU and deaths already exceed those of June. It is estimated that 510 deaths from the heat wave in the last week. Published in the BOE the new Royal Decree on Specialties in Health Sciences. Publication of the Health Barometer (2nd wave, 2022), which shows that the average time to see a primary care physician is 8.88 days.

In the field of companies, it should be noted that Amazon buys One Medical, entering more and more into the core of the health activity. Important Farmaindustria manifestos, to favor the rapid incorporation of innovations; and AESEG, to promote greater use of generics.

Biomedicine

Global health

International health policy

  • Monkeypox
    • The WHO declares monkeypox an international public health emergency, putting this disease at the level of covid-19, Ebola and polio. Overall, the global risk from monkeypox is low, except in Europe. More than 16,000 cases have been registered so far, mostly in men who have sex with men (https://www.ft.com/content/562fc24e-1b34-4ac6-a32a-42172a5f82b6)

National health policy

Companies

 

 

 

 

 

7 days in healthcare (July 11th-17th, 2022)

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Summary

From the point of view of biomedicine, the finding that there are plans to produce vaccines in cases of pandemic in 100 days should be highlighted. If it is confirmed, it will be a positive consequence of the terrible covid pandemic, in the same way that wars sometimes produce technological advances.

With regard to Global Health, the efforts of the WHO to create a hub for the production of vaccines with mRNA technology in poor countries should be noted, given the failure of other initiatives, based more on goodwill than on realistic approaches.

As for International Health Policy, there is already evidence of the vaccines that have saved the most lives in the world. The first was that of AstraZeneca-Oxford, followed by that of Pfizer-BioNTech.

If we talk about National Health Policy (Spain), the wave of covid continues to grow, with an increased impact on hospitals, although it seems that we are already close to the “peak” of this wave. Plans for a new dose of the vaccine for those over 60 years of age. Important changes are announced in Madrid’s healthcare, given the seriousness of the problems in waiting lists, primary care and emergencies. Let’s hope that the plan is effective and does not remain in one more advertisement, to which we are so accustomed. It seems that the State Public Health Center will be created immediately, which is great news, if it is done well. The fact that it will not be an independent Agency (AIREF model) may lead to skepticism.

In the field of companies, it seems that a new pill is in sight, announced as almost miraculous, against obesity.

Biomedicine

Global health

  • Nature: A vaccine hub for low-income countries. WHO initiative to produce mRNA vaccines in low-income countries, given the failure of “charity”. Issues over the global vaccine market, global trade rules, and intellectual property (https://www.nature.com/articles/d41586-022-01895-6)
  • The war in Ukraine. the devastation of health and human rights. Between February-24 and June-24, the WHO reported 323 attacks on health facilities, with 76 deaths and 59 injuries (https://www.nejm.org/doi/full/10.1056/NEJMp2207415)

International health policy

National health policy

Companies

 

 

Magnum: a very active agent in the consolidation, internationalization and professionalization of the health sector

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On June 21, 2022, as part of the “Breakfasts with leaders in the health sector” series, organized by Roland Berger, a breakfast was held with Alberto Bermejo Madera, Partner of Magnum Industrial Partners.

The presentation used by Alberto during breakfast is shown below:

Desayuno RB PE en salud_v2

A summary of the breakfast content is as follows:

Private Equity (PE) and breakfast goals

The EP is a very important actor in health

  • PE companies are very active in the M&A market (the PE can buy “almost” anything)
  • Very relevant operator in healthcare (almost 1/3 of the volume of M&A in healthcare is carried out by PE companies)

Despite their importance, their role, what they do and their business model are poorly understood

Breakfast goals

  • Explain how these companies work
  • Demolish certain myths associated with PE
  • Understand the present and future impact on the health sector

PE activity evolution

The PE has experienced an explosion of its activity in the last 10 years, both in terms of purchase values, as well as sales values, as well as capital raised. The year 2021 has been especially good for the PE companies.

It can be said that PE companies can buy almost any company, whether public (listed) or private.

What do PE companies do?

These companies basically do two things:

  • Convince investors (every 5-6 years you have to do fundraising) to give them their money to buy, fix and sell businesses
  • Years later, after the sale of the acquired company, return their money with capital gains (the average presence of a PE company is 6 years, between 3 and 8)

Types of PE funds

The funds usually specialize in certain types of companies, depending on their development:

  • Venture capital (initial states of companies)
  • Growth (growing companies)
  • LBOs (stable companies, with recurring income, whose acquisition is made by minimizing equity and maximizing debt)
  • Other categories: companies in distress, funds specialized in certain industries (infrastructure, energy, etc.)

Consistent return generation

PE companies have consistently shown higher return generation than non-PE companies.

The business model is based on:

  • Appropriate use of financial debt
  • Buying good companies
  • At the right price
  • Incentivize good management teams to generate value

It is the last three points that are key in the PE business model.

To be successful in this model you need:

  • Deep analysis of target companies
  • Detailed post-acquisition action plans
  • Appropriate selection and incentives for management teams

Comparison with other types of owners

Ownership of funds perfectly resists comparison in terms of advantages and disadvantages with other types of owners (family business, listed companies, industrial holding company, cooperatives and group domestic subsidiary).

Myths to dismantle about the activity of PE companies

  • Funds lurk to buy: Funds logically buy what others sell
  • The funds are dedicated to indebting companies to make money: leverage is not the main source of generating returns
  • The funds are dedicated to cutting costs: growth and development measures are the most frequent implemented by the funds, the average growth and job creation in the companies participated by PE exceeds that of non-PE
  • Funds buy to sell: TRUE, as any responsible investor should. But to achieve the profitability objectives, growth and future prospects are necessary that justify a certain valuation by the buyer. The sale of the fund must not imply an alteration for the companies or their management teams

The PE has been very active in health

The PE has been a very active investor in the health sector

  • Health concentrates about 10% of PE investment
  • PE represents more than 30% of investments in health

Reasons for this appetite of PE companies for the health sector

  • Stability (inelastic demand)
  • Growth prospects (population aging, technological advances, public deficit restrictions)
  • Development plans
    • Professionalization
    • Diversification
    • Sector consolidation

In Spain, the PE companies have largely shaped the development of the private health sector

In Spain, the EP has been very active in health, both in the field of general hospitals and specialized clinics (ophthalmology, dental care, mental health, plastic surgery, etc.), as well as residences for the elderly, distribution, pharma/bio, etc.

The Magnum experience

In the case of Magnum, of 23 companies invested, 9 were from the health sector.

Magnum has contributed to:

  • Consolidate and create new sectors: Geriatrics, ITA, Miranza, …
  • Internationalize: Orliman, Indiba
  • Professionalize: Teknon Medical Center, cmv Caridad Cartagena Hospital, Apices

The health sector will continue to be a focus of PE investment

For a more complex investment environment and the consequent flight to refuge sectors.

Due to the numerous pending opportunities in the sector:

  • Hospital chains still in the hands of family groups
  • Healthcare retail
    • Esthetic
    • Dental
    • Ophthalmology
    • Dermatology
    • Assisted reproduction
  • Pharma/Bio

Korian: a leading multinational for a sector such as nursing homes and mental health care that in our country requires innovation and business muscle

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On May 22, 2022, a breakfast was held at the headquarters of Roland Berger in which Mr. Jaume Raventós, CEO of Korian Spain, acted as a guest. What follows is a summary of his intervention.

The presentation used by Mr. Raventós can be seen below:

Presentacion-Korian-Spain-RB-v3

The Korian group

A large international presence

  • An international group that in 2021 had a turnover of 3.9 billion euros, of which 68% came from residential care; 20% health care; and 12% community care
  • Listed group, operating on the Paris Stock Exchange
  • In residential care it has 721 residences
  • In healthcare 170 facilities
  • In community care, a network of home care, with 194 centers
  • It is a leader in residential care in France, Germany, Belgium and Italy

Main lever of growth

  • The main lever for growth is to offer a continuum of care for an aging and fragile population

Heavy weight on quality control

  • More than 200 people dedicated to quality control
  • Growing weight in its establishments of external accreditations

Type of Korian services

  • Long-term care (nursing homes)
  • Health services
    • Primary Care
    • Specialties and post-acute
  • Community care
    • Home care
    • Residential solutions

Korian has the ambition to create a great mental health group

  • It is already the third group in Spain, with ITA, after the Institut Pere Mata and Domus
  • It is already the third group in France, with the acquisition in 2020 of INCEA
  • The revenue target for 2022 is 250 million euros

Korian is considered a player well positioned for growth

  • Increased demand, with the growth of people over 80 years of age
  • Increased dependency on Europe
  • Very fragmented market
  • Leadership position, with high entry barriers and few actors with scale

Korian values

  • As a service provider for frail people, having strong values ​​is essential
  • Korian’s vision is to provide innovative solutions for a more inclusive society
  • Some recent incidents of other actors in the sector demonstrate the importance of this commitment to values

Korian in Spain

Two great lines of activity

In Spain, Korian has two main lines of activity: nursing homes and mental health services.

Care for the elderly: residences, Seniors

  • 18 accredited residential centers
  • The expected turnover in 2022 is 46 million euros
  • It has more than 2,116 beds and is present in Andalusia, Mallorca, Valencia and Castilla-La Mancha.
  • Has specialized units
    • Behavior Disorder Unit
    • Rehabilitation Unit
    • Alzheimer and Dementia Unit
    • Neurorehabilitation Unit
    • Day Center Unit

Mental Health: ITA

  • Since its foundation in 2016, ITA has been growing rapidly, both organically and inorganically
  • It is organized by specialties
    • Eating disorders, 33% of activity
    • Behavior disorders, 27% of activity
    • Personality disorders, 9% activity
    • General psychiatry, 20% activity
    • Neurodevelopment and rehabilitation: 11% activity
  • It is the largest mental health group in Spain, with more than 5,000 patients a year; more than 38 specialized centers and more than 1,000 professionals
  • Growth is constant, even during the pandemic, with an expected turnover of 58.8 million euros in 2022
  • Incorporates great digital innovation, both in terms of satisfaction surveys, such as patient management and agendas, and in digital therapies
  • ITA has a network of healthcare partners (Quirón, DKV, Vithas, Keralty, etc.) and academic partners (several Universities)

A great growth potential for Korian Spain

  • Without prejudice to the great possibilities for growth in the areas in which Korian is already in Spain (nursing homes and mental health), in relation to Korian’s care offer at a global level, Korian Spain is neither in primary care nor in home care, looming there a great potential for growth

The challenges of the future of care services for vulnerable people

Both the residential and mental care sectors have significant challenges:

General challenges of the sector of vulnerable people

1. Sector concentration vs. fragmentation. Entry of large international groups. Overcoming small-scale farming and professionalization and renewal of the sector.

Senior sector

2. Residential sector, change of model, from large residences of around 200 beds to smaller and more specialized units.

Mental health

3. Financing mental health benefits

    • In the public sector: insufficient means and financing
    • or private sector:
      • Role of health insurers. Insufficient and unspecific coverage (in general, only 20 visits and 30 days of hospitalization). Covering mental health care well is a major challenge for health insurers.
      • School insurance. INSS (1.2 euros/family/year)
      • Possibilities of public/private collaboration. The insufficient means in the public sector and the growing needs offer great possibilities for public collaboration.

 

4. Prevention of mental health problems. Involve the educational system and families

5. Very complicated future due to the lack of professionals. New professional roles. It seems evident that only the development of new professional roles and the promotion of digital therapies will make it possible to advance in this field, where the lack of professionals is frightening and difficult to solve in the short and medium term.

6. Post-COVID stage, until when?

7. The role of digital technology and new surgical and pharmacological therapies

Roche: how to run a big pharma like a startup (Breakfast-debate with Mr. Federico Plaza, Director of Corporate Affairs of Roche Farma Spain)

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Roche: how to run a big pharma like a startup

Breakfast-debate with Mr. Federico Plaza, Director of Corporate Affairs of Roche Farma Spain

 

 

On April 27, 2022, a breakfast-debate was held at the Roland Berger headquarters in Madrid with Mr. Federico Plaza, Director of Corporate Affairs of Roche Farma Spain and Vice President of Farmaindustria. What follows is no more than a brief summary of the content of that breakfast.

A little history

Roche was founded in Switzerland by Fritz Hoffmann-La Roche in 1896, more than 125 years ago. It was born as a laboratory of individualized master formulas, but very soon it became a pioneer company in the development and industrial manufacture of chemically synthesized medicines to promote accessibility for all patients to medical advances.

The company is today at the forefront of personalized medicine thanks to its commitment to advanced therapies, precision diagnosis and data analysis sciences. This focus on personalized precision medicine has somehow brought Roche back to its roots, focusing on personalized treatment.

Another of the keys to Roche’s history is that, at the beginning of this century, it was able to combine the two company concepts that existed until then: that of the so-called big pharmas (based above all on the development of chemically synthesized drugs each directed of them to millions of patients, the well-known blockbusters) and biotechnological companies (which research and develop biological therapies, whose active ingredient is derived from organic substances).

Roche helped blur that difference with the 2009 acquisition of Genentech, a major US biotech company, in what was at the time the largest takeover by a Swiss company. Now all the big pharmaceutical companies are biopharmas.

Roche has continued to work in this line in recent years, having fully entered the 21st century in the development of new therapies based on molecular biology and the use of data analysis sciences through new big data tools and artificial intelligence.

The numbers of a giant

The numbers for Roche, the world’s largest biotech company, are staggering. Both divisions (Pharmaceutical and Diagnostics) showed the following figures in 2020:

  • 800 million Swiss francs in sales.
  • 900 million Swiss francs of net profit.
  • 700 million francs invested in R&D, the highest figure in the entire industry, which represents 22% of turnover.
  • 80 molecules in clinical development that cover a wide range of pathologies (oncology, hematology, neuroscience, ophthalmology, rare diseases, etc.), of which 70 are present in Spain.

A new company model

The digitization process, the progress in the personalization of treatments and the Covid pandemic have accelerated the transformation process in which the company was already immersed to anticipate the future and work to achieve solutions for the health problems of patients in the future. One of the keys to this transformation is the change in the business model, transcending the traditional role of companies as mere providers of medicines to a new role as an ally of the system when it comes to achieving comprehensive solutions to the demands of health systems and patients, in measurable terms in health outcomes.

Within this process Roche considers some significant strategic changes.

Main strategic changes

There are eight fundamental strategic changes that Roche is implementing globally and, specifically, in Spain, one of the countries where this transformation is most advanced:

1. Not having medical visit networks

Roche no longer has networks of medical representatives in Spain, with a single commercial vocation. It has replaced them with scientific networks, whose interaction with the health system is totally different, activating co-creation projects with clinicians and managers, in order to give more value to the treatment of patients and respond collaboratively to the challenges of health systems.

Consequently, Roche professionals no longer have sales incentives, but their variable depends on more qualitative indicators and always based on their ability to favor collaborative projects and solutions always based on science.

2. A much more horizontal structure

The traditional way of operating big pharma is through a heavy bureaucracy, with a very slow and hierarchical decision-making process. In this way, any decision had to go through different people and levels of the company before becoming a reality.

The new Roche is based on a much more horizontal structure, where all professionals are empowered to make decisions in their field, and where leaders are fewer and have a more inspiring and strategic role, going beyond the role of traditional leadership.

3. No local budget

Of course, the company works with a budget at the global and European level, but not at the country level. The situation based on local budgets and the need to make quarterly reports, as befits a listed company, meant that many resources were devoted to explaining what is done to the parent company. For this reason, around 30% of the effort was spent not so much on promoting new projects, but on preparing the entire quarterly reporting exercise.

This has changed and, since last year, the Spanish subsidiary no longer has a budget in the traditional format.

4. Agile methodology

Compared to the traditional model where a boss is in charge of assigning tasks to collaborators, telling them how to do them and waiting for a desired result, Roche has established the agile methodology, which gives employees autonomy when making decisions, encourages their initiative and stimulates their ability to propose new projects. The role of the hierarchical superior changes and goes from being a boss to a VACC leader: Visionary, Architect, Coach and Catalyst. It is a model that also truly puts the customer at the center through multifunctional and self-organized teams that work collaboratively.

5. Bet on R&D

In the last financial year, Roche spent 13.7 billion Swiss francs on R&D, 22% of turnover. All of Roche’s plans include reinforcing R&D-oriented resources, until this figure doubled, reaching 20,000 million Swiss francs in 2030. In Spain, Roche is a leader in biomedical R&D: it carries out more than 300 clinical trials every year in 180 hospitals in which more than 1,100 researchers and almost 15,000 patients participate.

6. OneRoche

Roche has two major business units: the Pharmaceutical Division (Roche Pharma) and the Diagnostics Division (Roche Diagnostics). Even within the Diagnostic Division, the Diabetes area (Roche Diabetes Care) was segregated. Although they will continue to be two separate business units, the advancement of personalized precision medicine brings diagnosis much closer to treatment and vice versa, which is why the company is working so that both divisions work closely in coordination to offer comprehensive solutions that bring together precision diagnosis, advanced therapies and data analysis.

7. From 3 to 5, 50% reduction in costs for the system

The company works with a strategic objective for this decade: to be able to provide three to five times more medical advances at a 50% lower cost for society. One of the keys to achieving this is to improve the efficiency of R&D thanks to the use of new digital and data management tools, which are already allowing a shortening of clinical research deadlines and the development of tools such as approvals conditions, which speed up the arrival of innovations on the market, which also allows a reduction in costs.

8. The data heals

Precisely for this is Data Analytics, which is not a Roche business area, but tries to strengthen collaboration with the system.

The new paradigm of personalized medicine will only be possible if it is based on the development of new tools for managing enormous amounts of clinical data (big data) and the real life of individuals (real word data) through artificial intelligence applications and machine learning. That is why the development of health data management tools (data analytics), both individually and in aggregate, will be one of the keys to the immediate future for Roche.

In short: invest better to be more productive

This is what Roche intends: to invest better in an increasingly efficient biomedical R&D process, which entails lower costs for the system and provides more value, measurable in health outcomes, both to patients and health systems.

SegurCaixa Adeslas: how to be a leader in health insurance for more than 20 years

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See PDF of the presentation used during the breakfast:

Presentacion SegurCaixa Adeslas JM 20220322 v7

Breakfast-debate with Mr. Javier Murillo Ferrer, General Manager of SegurCaixa Adeslas

A little history

Adelas has been a leader in health insurance for more than 20 years. In 2009 this company was acquired by La Caixa, to give rise to SegurCaixa Adeslas (SCA), shortly after (2011), Mutua Madrileña acquired 50% of the shares of this company.

During this 2010-2020 period, SCA has established itself as a solvent project with sustainable and profitable growth, going from a turnover of 1,854 million euros in 2010 to almost 4,000 in 2020, and multiplying its profitability by four during this time.

SCA is the second non-life entity, with a growth rate above the market.

What are the levers that explain this success

There are two levers that explain this behavior, which we could call successful:

  • Its leadership in health, since of the 4,000 million turnover, almost 3,000 correspond to health. Health insurance has not stopped growing in this period.
  • Its strength in distribution, fundamentally through the banking channel, which is extraordinarily successful, coexists with other more classic channels that have also worked. Currently, around 70-75% of sales are produced through the banking channel.

Very good behavior of health insurance

Health insurance has had a great performance in this period, with great growth, which in the period 2012-2015 (in the midst of the crisis) had a CAGR of 2.8% and in 2016-2021, the CAGR was 5% .

This growth was due both to the increase in the number of premiums and to the increase in price, but above all to the first cause, which explains 70% of the growth, with the increase in prices being responsible for only 30% of this growth.

This good behavior of health insurance explains that, within SCA, health insurance has been gaining more weight, going from being 21.8% of premiums in 2012 to being 25.7% in 2021.

A volume business

The technical margin of health insurance is moderate, around 6% of premiums, with 78-79% corresponding to claims (medical expenses) and between 14-14.5% to administrative expenses and other technical expenses.

This margin leads us to say that the health insurance business is a volume business and one in which you have to continually be well above efficiency.

Good behavior during the pandemic

A pandemic is not technically insurable. On the other hand, a reading of the contract conditions could have led insurance companies to exclude care for the COVID-19 pandemic from health insurance care.

However, health insurance as a sector quickly turned to care for its policyholders in COVID, which contributed to an increase in the prestige of health insurance. It is clear that this decision was a success, from an industry perspective.

On the other hand, the pandemic has had a positive effect on costs, due to the withdrawal and the difficulty of carrying out ordinary health activity in the hardest moments of confinement. This caused the cost rate to drop in 2020, thus increasing the profitability of the business in that year. In 2021, with the recovery of activity, profitability has returned to figures that are more consistent with historical figures.

The evolution of health insurance is linked to the maturity of the private health system

Private healthcare spending in Spain represents almost 30% of total healthcare spending, one of the OECD countries with the highest percentage of private healthcare spending. 9 million people have voluntary health insurance, to which must be added the almost 2 million citizens covered by insurers under the administrative mutualism system.

This means that between 23-24% of the population is covered by health insurance, this percentage being higher in some communities, such as Madrid (36.7%), Catalonia (31.8%) and the Balearic Islands (29.5%). ). This fact is especially noteworthy if we take into account that in 2011 only 18.9% of the population was covered by health insurance, having risen to 23.4% in 2020, an increase of 4.5 percentage points.

In addition, it is an insurance that is used. Despite the double coverage in a high percentage of cases, health insurance is widespread seen among its clients as the first option to solve their health problems.

It is a very concentrated insurance, since the three main entities manage almost 60% of the premiums, and more than 70% if we take into account the first five companies.

As is known, the main modality is health care (the one in which the insurer has to offer a network of providers), while the reimbursement of expenses (the insurer fully or partially covers the costs of care, in accordance with the contract) is very minority.

Regarding the segments, individual insurance predominates (purchased directly by the individual or his family), which represent 51.4% of the premiums; followed by groups (28.6% of premiums), a segment that has had great growth in recent times; the civil servants of the administrative mutualism are 16.7% of the premiums and, finally, dental insurance, although very profitable and growing, only represents 3.3% of the premiums.

Health insurance: a solid business for its growth, but full of challenges

Health insurance enjoys high levels of acceptance among the population. On the other hand, at the company level, it is possibly the most valued social benefit.

However, health insurance faces three major challenges:

  • Patient/client experience

Promoting quality assistance: effective, safe and very agile.

Boosting digitization to improve the customer experience

  • Assess health outcomes

Providing the health care that is needed and, at the same time, working on health promotion, prevention and self-care

  • Value-based healthcare

Prioritize value for patients over quantity, forcing changes to the way certain aspects of health insurance work.

Health insurance is a great manager of health activity in terms of cost/effectiveness, from this perspective it is a great partner for Administrations and companies.

Three critical issues

There are three critical issues that health insurance, as a sector, has to deal with:

  • Dynamics of growth in healthcare costs, for many reasons (new diagnostic and therapeutic technologies, chronicity, aging, new demands, etc.), which contrasts with relatively cheap premiums in relation to surrounding countries.

This is, of course, a critical element for providers and professionals, who sometimes cannot be paid as desired.

This is an issue that will have to be addressed, although it will have to be done gradually enough to avoid a massive loss of policyholders.

  • Sustainability of the mutual society model for public employees. The mutual insurance model is very important, since it demonstrates the capacity of health insurance to provide comprehensive health care to a group of insured persons (outside the dual coverage system) and represents future potential to be preserved. If the model ended, the impact on both insurance and private provision would be very relevant.
  • Digitization aimed at adding value. Many times a digitization is seen with a more commercial orientation, without going into the hard core of the service. There is a need to offer integrated solutions that judiciously combine face-to-face with remote activity. On the other hand, new technologies and their data analysis possibilities are going to radically change the way care is offered.

5 topics for discussion

During the debate, five topics were raised, which are only mentioned, without trying to exhaust the richness of the discussion.

  1. Are we going to continue with the status quo or can steps be taken towards a model where health insurance is no longer a duplicate model?

Health systems are largely conditioned by the history, economy, culture and values ​​of a country and what we have seen is that changes in healthcare are very difficult in all countries. Radical changes, such as those that occurred a few years ago in the Dutch model, are not in sight in our country.

In this context, the public system has to fulfill its mission, which is not easy at all; and as for private insurance, it must continue to improve, since it is a great asset for the country, precisely because of its managerial capacity in cost/effectiveness terms. A treasure that other countries around us do not have (without going any further, France).

Of course, it is necessary to continue in the activities of public/private collaboration, the most important of which is administrative mutualism, while others possibly have less future.

Surely the current situation (health insurance as predominantly duplicated) is not the best for the country in terms of efficiency, but an orderly change to overcome this situation is hard to see.

  1. A certain urgency to modify the rates upwards, in order to preserve the operating accounts of the suppliers

Graduation in the modification of premiums, but also taking into account the urgencies of providers and professionals.

  1. Bad mental health solution

Within health insurance, mental health is especially poorly resolved. This is an issue that will need to be addressed, as the incidence of mental illness, especially among young people and in the aftermath of the pandemic, is a pressing issue.

  1. Possible improvements in efficiency

Efficiency improvements are not only necessary in the public system, there is also room for efficiency improvement in the private system. This is also closely related to the way in which the professional and the center are remunerated. We have to place more emphasis on value-based compensation and not so much on simple quantity.

  1. Quality variability

It is evident that the improvement in private assistance took place fundamentally in the large urban centres. Digitization and telecare can greatly contribute to improving this situation of inequality. On the other hand, using the freedom of choice, something consubstantial with health insurance, people move in search of the best care.

Atrys: a multinational created in five years (breakfast with its Founder: Santiago de Torres)

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On January 25, 2022, a breakfast was held at the Roland Berger headquarters in Madrid with Santiago de Torres, Founder and President of Atrys.

What follows is a brief summary of the story of the creation, development and future prospects of this company. It is nothing more than a summary of the rich exposition of its Founder.

What does the company do

Advanced medical diagnosis in the broadest sense: radiology, teleradiology, genetics, molecular diagnosis, Pathology, etc. All this oriented both to prevention and precision medicine, using the most varied tools: Big data, artificial intelligence, …

Ultimately, it is a matter of putting as many surnames as possible to the medical process, be it cancer or another disease, in order to select the most appropriate treatment for the characteristics of the pathology and the patient.

Big emphasis on data

Atrys performs 6 million medical acts per year. From the information generated by these data, Atrys has developed its own data company (Smart Data), with the idea that all this information can be used by pharmaceutical companies and other health companies.

Customers

They are both private and public. In general, 75% of income comes from private clients (hospital groups, etc.) and 25% from public clients.

How it has grown

Atrys has been developed based on organic and inorganic growth

To show the speed of its growth, when Atrys went on the MAB (now BME Growth) it had a turnover of 4.5 million euros and an EBIDTA of 1 million euros. At the present time (about to go on the continuous market) its capitalization is 600 million and its EBIDTA is 40 million.

In this period they have gone from 45 employees in 2016 to 2,300 today.

Joint initiatives with renowned partners

Atrys has a nuclear medicine center with Sanitas in Barcelona (another one will be opened soon in Madrid); the creation of a pediatric oncology center is underway in Sant Joan de Déu in Barcelona, ​​in which Atrys will perform nuclear medicine; as well as with the Champalimaud Foundation, in Portugal; and with BUPA in Chile, among others.

Presence in 7 countries

Atrys has a presence in 7 countries: Spain, Chile, Colombia, Brazil, Peru, Portugal and Switzerland. The presence in Switzerland responds to give confidence to investors in terms of operating in a solid triple A country.

Company integration process

Regarding inorganic growth, Atrys has integrated 14 companies. Atrys approach is always to acquire 100%.

Very balanced shareholding

Shareholder management has been an important part of Atrys’ success.

At this time it has two mutuals (Mutua Madrileña and CASER), which together have around 10%; 2 funds; 2 family offices (with 5% each); and management has 12%. 30% in floating shares.

Continuous market release

Soon (February 9, 22), Atrys will go on the continuous market, after more than arduous negotiations and compliance with the requirements of the CNMV.

Governance has been adapted and is highly thought of in the continuous market, for example Josep Piqué is an independent director and is the Chairman of the Audit Committee.

This whole process of relations with the CNMV slowed down inorganic growth a bit, in order not to alter the picture during the process, but it already has more than 10 companies in the pipeline and its approach is to go from being in 7 countries in a short time to be in 10, being the last three to be incorporated from the environment of the European Union.

Keys to success

According to its Founder, there have been basically three keys to success:

  • Do what they do well (be it radiology, genetics, molecular diagnostics, pathology, data analysis, etc.)
  • Take care of relations with investors and the type of investors in the company
  • Manage the equity/debt ratio very well

End goal

For Atrys, in the words of its Founder, what they want is to set up a large diagnostic company, with a presence in many countries.

Trends in healthcare 2022

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See PDF Deloitte document:

2022 Global Health Outlook, Deloitte

See PDF Forbes predictions (Anita Gupta)

The Future Of Health Three Healthcare Trends For 2022

See PDF Capgemini document:

Top-Trends-in-Healthcare-2022

La clave para el desafío de 2022 que la COVID potencia – Project Syndicate:

La clave para los desafíos de 2022 que la COVID potencia by Ngaire Woods – Project Syndicate

 

As every year, at the beginning of it, an extensive literature is generated with forecasts on healthcare for that year.

Let’s quickly go through just a few of these documents:

  • 2022 Global Health Outlook, from Deloitte
  • Three Healthcare Trends for 2022, by Anita Gupta, published in Forbes magazine
  • Top Trends in Healthcare 2022, Capgemini
  • Key to 2022 Challenges Powered by COVID, published in Project Syndicate magazine

2022 Global Health Outlook, from Deloitte

This report presents a number of forces that are decisively affecting the future of health and health systems:

  • A global pandemic of historic proportions
  • Exponential Advances in Medical Sciences
  • Explosion of digital technologies
  • Data access and data analytics
  • Informed and active patients
  • A movement from disease care to health and wellness

From this point of view, the Deloitte report presents six major themes that will be very present in 2022:

  • Health equity
  • Corporate Social Responsibility
  • Mental health and wellness
  • Digital transformation and impact on delivery models
  • The future of medical science
  • Public health, reimagined

Health equity

The fundamental problem is that extreme poverty grew globally in 2020 for the first time in almost 20 years.

This poses new challenges for healthcare systems.

Corporate Social Responsibility (ESG)

The main challenges are to move towards a health system with zero CO2 emissions; climate change and its impact on the infrastructure of health systems; and, climate change and its impact on health.

Mental Health and Wellbeing

The pandemic, climate change and political crises have exacerbated mental problems.

Digital transformation and impact on delivery models

This will force investment in 5G infrastructures; move contact centers to the cloud; create a delivery system without barriers; reinforce interoperability and connectivity: and broaden the concept of partnership.

The future of medical science

Transformational innovations are:

  • Digital medicine
  • Nanomedicine
  • Genomics
  • Artificial intelligence and big data
  • Microbiometric / metabolomics

Public health, reimagined

A public health that impacts the social determinants of health

Three Healthcare Trends for 2022, by Anita Gupta, published in Forbes magazine

The three trends identified by Anita Gupta for healthcare in 2022 are:

  • CSR focused on innovation
  • Data Analytics to Accelerate Biotechnology Innovation
  • Consumer-Oriented Telemedicine Solutions

Top Trends in Healthcare 2022, Capgemini

 

The ten themes and the priority matrix are represented in the following table:

 

 

Key to 2022 Challenges Powered by COVID, N. Woods, Project Syndicate

With a different perspective, Project Syndicate magazine looks at the challenges of COVID-19 for 2022.

  • People’s relationship with work has changed

In the United States in 2021, more than 4 million workers quit their jobs per month. Something similar happens in China.

  • Cut the growing global trend towards authoritarianism

According to Freedom House, the pandemic has weakened the checks and balances of power in at least 80 countries.

  • Third challenge: let there be another pandemic

There are other threats from infectious diseases.

  • COVID 19 is changing the rules by which the economy will be governed in 2022

There is a rise in economic nationalism.