Adrian Peake, Medicover:The economic growth offers confidence to invest in development and people
As Medicover Romania seems to have an accelerated growth by opening new clinics and acquiring other players, Alexandra Cioboata talks to Adrian Peake, general manager of the private healthcare operator, to see what kind of strategies he holds up his sleeve
Medicover Romania, one of the largest private healthcare services providers on the local market with a share of 20 per cent, invested almost two million Euro this year in expanding and modernizing its national clinic network. Thus, in the first nine months of the year, it relocated and expanded both its Ploiesti and Brasov clinics, opened a brand new clinic in Galati and cut the ribbon of its second clinic in Cluj-Napoca. In addition, in early October, it completed the acquisition of Doctor Luca clinic in Pitesti, reaching a network of 19 units.
The main growth driver of the healthcare operator, which plans to keep up the pace next year as well, consists in the confidence offered by Romania's 2016 positive outlook, according to Adrian Peake, general manager of Medicover Romania, where the local economy is set to grow by five per cent this year - the highest in the European Union - and by almost four per cent in 2017, according to IMF forecast. This shiny perspective induces investors to keep developing their businesses and to inject money in expansion and people, he says.
"From an employer's perspective, the most important thing [coming from the economic growth] is confidence," Peake tells The Diplomat - Bucharest. "It gives employers confidence to invest in development and people. This year, we have had more activity than we have probably ever done in a single year, opening four new clinics: Brasov, Ploiesti, Cluj-Napoca and Galati. Cluj is particularly important, because it is the first city outside Bucharest where we have two clinics, while Galati is our first new clinic in a new city since 2009. We have been incredibly active in the first few months of the year due to the confidence I was talking about. Confidence is the key to success."
Peake goes on to add that the private healthcare market in Romania will continue to grow and it will register one of the fastest increases in Europe in the next five years. Moreover, according to him, another consequence of the positive economic scenario is the increase of the level of quality of the local healthcare system, as individuals - with a higher purchasing power - will become more choosy about the services they request. Thus, the sector will continue to consolidate itself.
"We see a lot of consolidation in the private healthcare market and it will continue for two reasons," he says. "First, there is regulation. Regulation is a good thing, because it brings everyone up to a minimum level of quality. The second thing is that we, as patients, are becoming much more discerning about what we receive and we will demand more from our healthcare providers. However, some of the providers in the market will not be able to meet those standards and thus, the consolidation will carry on."
Medicover plans to see 100 million Euro turnover in 2020
Medicover Romania′s growth plan is based on three areas, namely on organic growth, by expanding the network and, also, through acquisitions. Last year, Medicover Group's total business in Romania, which includes the clinics, the Medicover hospital and the Synevo laboratories, increased by over 13 per cent in 2015, to 252 million RON (around 56.7 million Euro), while this year it plans to see a 20 per cent rise, to reach around 302 million RON (around 68 million Euro). However, the plan is to see 100 million Euro in revenues in the next four years, according to Peake.
"We are very much on track to deliver the growth we said we would deliver this year, namely 20 per cent," says the general manager. "In 2020, we want to reach 100 million Euro turnover. However, we are not necessarily on an accelerated huge growth plan. Medicover exists to provide high quality healthcare services to people in the countries where we operate. My focus and the focus of our team in Romania is to provide the best healthcare we can to everybody. The way we do that is through new facilities, which happens to lead to growth."
The general manager discloses that the expansion in the region will continue and that Bucharest is also on the radar. "We will also look at expanding our footprint in Bucharest," he says. "A few weeks ago [this interview was conducted in mid-October], we extended the Pipera clinic and we will continue next year with others, as part of the expansion. The work we have done in Pipera is just the start."
Medicover is the only private healthcare operator in Romania that runs a closed system, being both an insurance and a healthcare provider. At the international level, Medicover Group has more than ten years of experience on the health insurance market, in countries such as Sweden, Poland, and Hungary, and the company also plans to increase its footprint in this segment in Romania. This May, the company launched a new service dedicated to corporate clients: health insurance for employees. The new packages allow companies to choose exactly the services and interventions which they consider necessary for their employees: from tests and investigations, to pregnancy protocols and complex surgeries.
"The insurance market is growing and we have launched certain insurance services this year," says the general manager. "The medical subscriptions are still a large part of our business - 70 per cent - but insurance is complementary. In the past, the market has not been that ready to embrace insurance, but this perspective is changing a lot nowadays. Insurance will continue to play a more important role in our business going forward."
Medicover Group is one of the largest private healthcare services providers in Central and Eastern Europe and offers integrated medical services to patients from 15 countries, with over 100 Medicover clinics, 80 laboratories, 400 collection points, over 6.5 million patients annually and over 13,000 employees.
In Romania, Medicover has been present on the private medical services market for over 20 years, counting around 1,400 employees (800 FTEs and around 600 collaborating doctors) and registering 150,000 subscribers. It also owns the Synevo laboratories network and it has 19 of its own clinics in Bucharest and around the country (Timisoara, Cluj-Napoca, Constanta, Iasi, Ploiesti, Brasov, Galati and Pitesti), and a general hospital in Bucharest - the Medicover Hospital - which counts for around 30 per cent of the business. Other cities that could be of interest for further expansion includes Oradea and Craiova.