Brazilian Managed Care Industry
The Brazilian private healthcare coverage providers’ aggregate revenue was R$ 95.0 billion in 2012, and demonstrated a compounded annual growth rate of 14.0% between 2001 and 2012. In the same period, the number of private healthcare coverage providers’ plan members grew at an annual rate of 6.2%.
The table below shows the growth in the number of plan members and revenues from healthcare plan premiums in Brazil between 2001 and 2012:
| Year | Plan Members (in millions) | Net Healthcare Plan Premiums (in R$ billion) |
| 2001 | 34.5 | 22.4 |
| 2002 | 35.2 | 26.1 |
| 2003 | 36.4 | 28.7 |
| 2004 | 39.2 | 32.6 |
| 2005 | 41.6 | 37.3 |
| 2006 | 44.6 | 42.6 |
| 2007 | 48.5 | 52.2 |
| 2008 | 52.0 | 60.7 |
| 2009 | 55.3 | 65.8 |
| 2010 | 59.8 |
74.6 |
| 2011 | 63.9 |
84.6 |
| 2012 | 66.5 | 95.0 |
Source: ANS - December 2012
As of December 2012, only 24.7% of the Brazilian population was enrolled in private healthcare plans or had private health insurance. The remainder of the population relied on public healthcare services. The Brazilian public healthcare system is overburdened, and Amilpar believes that public healthcare services in Brazil are generally perceived to be of a lower quality than private healthcare services. This perception derives from, among other things, the difficulties Brazilians face in scheduling medical examinations, tests and procedures, and consequently, a substantial portion of the Brazilian population would prefer to obtain private healthcare coverage.
The table below, based on a two-week survey conducted by the IBGE, sets forth the main reasons why people seeking to schedule appointments for public healthcare services in Brazil were unable to do so:
| Main reasons for the failure to obtain public healthcare services(1) | Number of respondents (thousands) | % |
| No available time slots | 409 | 40 |
| No doctors / dentists available | 389 | 38 |
| No doctor available in a required specialization | 65 | 6 |
| Services unavailable or equipment not functioning | 36 | 3 |
| Long waiting time resulting in cancellations | 51 | 5 |
| Others | 84 | 8 |
| Total | 1,034 | 100 |
(1) Number of people seeking public healthcare services in Brazil within a period of two weeks.
Source: IBGE/PNAD 2008
Between 2001 and 2012, the number of private healthcare plan members in Brazil increased by 93.0%, while the Brazilian population grew by 14.5% during the same period. Amilpar believes that, if Brazil were to experience a macroeconomic expansion resulting in an increase of disposable income and working population, the managed care industry could absorb a significant portion of the population that currently resorts only to the public healthcare system.
The index of private healthcare coverage indicates the significant variation of private healthcare coverage in different regions within Brazil. For example, 43.6% of the total population of the State of São Paulo has private healthcare coverage, compared to only 6.6% of the population of the State of Maranhão. 63.7% of the total members of private healthcare plans in Brazil are located in the southeastern region of Brazil, compared to 13.5% in the southern region and 13.6% in the northeastern region. The States of São Paulo and Rio de Janeiro have some of the highest private healthcare coverage indexes in Brazil.
The high concentration of healthcare plan members in the southeastern and southern regions of Brazil correlates to the size of the working population and the higher income levels in these regions, as set forth in the table below.
| Population (1) (in millions) |
Healthcare Plan Members (2) (in millions) |
% of Coverage | GDP per Capita(3) (R$ thousand) |
|
| São Paulo | 41.9 | 18.3 | 43.6% |
30.2 |
| Rio de Janeiro | 16.2 | 5.9 | 36.6% |
25.5 |
| Distrito Federal (Brasília) | 2.6 | 0.8 | 29.3% |
58.5 |
| Espírito Santo | 3.6 | 1.2 | 32.6% |
23.4 |
| Minas Gerais | 19.9 | 5.2 | 25.9% |
17.9 |
| Santa Catarina | 6.4 | 1.4 | 21.6% |
24.4 |
| Paraná | 10.6 | 2.6 | 24.4% | 20.8 |
| Rio Grande do Sul | 10.8 | 2.5 | 23.5% |
23.6 |
| Bahia | 14.2 | 1.5 | 10.8% |
11.0 |
Source:(1) IBGE - 2012
(2) ANS - December 2012
(3) IBGE - PIB Grandes Regiões do Brasil / Contas Regionais do Brasil 2010
GDP per capita in Brazil per region
Source: PIB Grandes Regiões do Brasil - IBGE/Contas Regionais do Brasil 2010
Managed Care Industry
In Brazil, private healthcare plans and health insurance were created approximately 45 years ago in order to provide better quality healthcare coverage to the employees of large companies and their family members. Private healthcare plans and health insurance are today the basis of the private healthcare system in Brazil and the principal sources of revenue for hospitals, clinical laboratory networks and healthcare professionals.
The regulation of the industry began in 1998 with the enactment of the Private Healthcare Plans Law (Lei dos Planos Privados de Assistência à Saúde). The ANS (Agência Nacional de Saúde), the regulatory agency for the sector, was created by Law No. 9,961, of January 28, 2000.
The ANS established the following eight types of private healthcare coverage providers (including dental plan providers): managed care organizations (MCOs), medical cooperatives, dental cooperatives, philanthropic institutions, self-managed providers (including self-sponsored corporate healthcare plans), or self-insurers, health insurance providers and dental MCOs.
Concentration
The Brazilian healthcare industry is highly fragmented, consisting of 1,538 private healthcare coverage providers and thousands of healthcare providers among hospitals, diagnostic laboratories, doctors and other medical professionals, according to ANS information as of December 2012. According to the ANS, the 8 largest private healthcare coverage providers in Brazil had only 30.2% of the total market share of healthcare plan members.
Source: ANS - December 2012
Competition
The main factors affecting a company’s ability to compete in our industry include: (i) the quality and trustworthiness of the services provided; (ii) the qualification, geographic distribution and accessibility to third-party networks; (iii) cost-effective operations; (iv) a sophisticated technological support structure; and (v) customer service and support structures for plan members.
The table below sets forth the revenues from healthcare plan premiums per type of private healthcare coverage provider in Brazil in 2012, according to ANS information:
| Type | Revenues from Healthcare Plan Premiums | |
| (R$ billion) | % | |
| Self-managed providers (self-insurers) | 10.5 |
11.1% |
| Medical cooperatives | 33.9 |
35.7% |
| Dental cooperatives | 0.5 |
0.5% |
| Philanthropic institutions | 2.1 |
2.2% |
| MCOs | 27.6 |
29.0% |
| Dental MCOs | 1.7 | 1.8% |
| Health insurance providers | 18.7 |
19.7% |
| Total | 95.0 |
100.0% |
In the following table are listed the largest companies in the Brazilian healthcare industry. The small market share of the biggest operators demonstrates the consolidation potential of this industry.
| Private Healthcare Coverage Providers | Number of Plan Members (in millions) |
Net Healthcare Plan Premiums (R$ million) |
| Amilpar | 6.3 | 10,047.3 |
| Bradesco | 4.0 |
9,814.0 |
| Intermédica |
3.7 | 2,429.0 |
| Sul América | 2.5 | 7,360.2 |
| Golden Cross | 1.0 | 1,876.9 |
Source: ANS, IBGE and companies’ reports as of December 2012.
