Healthcare equipment market

A short review

10 years later

• 2005, I came back 10 years after I left Turkey

• 1995– Large public market – small private

– Focus on: Military, Universities and large MOH

– Government guarantees

– High inflation and currency dynamics

– Most if not all business in NLG or USD, LC based

10 years later

• 2005– Less focus on a relatively smaller public market

– Fast growing private market: universities, hospital chains, clinics

– Intro of “Income Sharing“ models at public hospitals

– Limited or no government guarantees

– Reduced inflation and rather stable currency

– More and more business in TL

Recently

• 2009/2010– Strong focus on public healthcare for all (SSK incorporated in MOH)– Reimbursement reductions, changes in the labor law, hospital and

equipment permits and licenses, regulatory actions– First signs of PPP (public private partnerships)– New regulations – future private market uncertain - strong reduction of

the public market – many institutions in trouble– Foreign investments in some of the bigger hospital chains– Increased cross border business– Income Sharing reaching saturation– Reduced inflation and rather stable currency– Majority of the business in TL

At present

• 2011– Growing public market via central bulk purchasing, new framework tenders,

local tenders and PPP (…. elections in June)– Largest PPP funnel world-wide (28 projects)– Improved private market – foreign investors and financing are successful –

investments and projects started again– A further reduction in the reimbursement rates, permits and licenses continue

– Income Sharing projects in trouble)– Increased cross border business – ME, Russia, CEE and Africa – largely via

construction companies– Stable single digit inflation and stable currency (although lost 6% in the first 5

month)– Majority of the business in TL

Highly diverse market place

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A granular approach

Brand image

Hi-end / SophisticatedSpecifications

Low-end & economical solutionsPrice focused

Local insightSegmentation

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Specific market requirements

Local insight

Product specifications Price setting

LogisticsVisibility

Brand image

Healthcare equipment market

Public Market segment:

• 1000 MOH hospitals• 60 Medical Universities• 50 MOD hospitals• Numerous clinics (low perception)

• Healthcare for all policy• Some health Tourism • Limited private insurance

• Largest PPP funnel in the world

Private market:

• 400 + hospitals (no new licenses)• 20 Medical Universities• PFI’s (income sharing) • Numerous clinics (struggling)

• Minimum reimbursement rates • Limited private customers• Dominating hospital chains• Cross border activities

• Foreign investments

GDP Healthcare expenditure 15% compared to European countries (OECD)

Great growth potential

High volumes

Very competitive

Solid base for the region

Questions to answer:

How would you:

• Define your market

• Find your potential growth segments

• Define your enablers for each segment

• Involve local insight

• Balance short term versus long term objectives