Here is the thing about investing in DACH
publication date: Oct 30, 2009
A private equity investor explained just why investing in healthcare services in German-speaking Europe was such a joy.
“Almost no German medic works Wednesday afternoon. It is customary to take Friday afternoon off as well. And lunch breaks are long. So the rates of pay for any particular piece of activity are set high enough, normally by the regional doctors unions, to ensure that doctors can enjoy a good lifestyle and still work these relaxed hours.”
He added: “To make money all you really have to do is to work a five day week in an efficient and effective way.” There is slightly more to it than that - you have to get the work and customer acquisition is a major headache in Germany. But it is true that you know, as long as you are working for an insurer, what you will be paid per item. Take labs. Here there is a price sensitive market - where tests are outsourced by hospitals to private labs. But that is probably under 20% of the market.
This approach is different, of course, in countries dominated by national health services where private players will often find themselves bidding against each other for a contract, as in the UK and Scandinavia, or often refused admittance as suppliers at all (much of the UK and Scandinavia and most of the Accession countries).
France and Italy are also less cosy. In France, the prices paid to the private sector are systematically lower than the public sector, and Italy is moving in that direction. For example, in Italy, lab tests carried out by the private sector, whilst officially on the same tariff, command a 20% discount.
My godfather used to advise me to move to Switzerland and become a postman. But it is even better being a doctor.
Several of you expressed surprise at our claims that Swiss lab test prices were still much higher than in Germany. This has now been confirmed by a spokesman at Sante Suisse, the association representing Swiss mutuals. He told Healthcare Europa: “Even after the reforms this summer which saw prices fall 17%, test prices here are 3-4 times higher than Germany.” He said that they account for 5% of all claims submitted to his members, compared to a norm for Europe of 1-2%.
