Medhold, the largest private lab group in Belgium with sales of around €70m has been put up for sale by its owner, private equity house Waterland. This comes ahead of a probable 5% cut in test prices in 2010.

Waterland invested some three years ago and is now actively pursuing a sale of Medhold, which covers Flanders and also has a foothold in Brussels, say Belgian sources. The company would make a good fit for Labco, the 3i-backed diagnostic laboratory group which already has a presence in French-speaking Wallonia with Roman Pais.

But is Medhold very interesting? Nicholas De Quinnemaar at rival Medina says that the Belgian government has announced that it will cut the lab budget of just over €1bn by €50m in 2010. This implies a cut of 5%, but there is a possibility that it could be higher if the authorities decide to apply the cut principally to the outpatient sector which is dominated by private players. Three lab operators we talked to warned of cuts in the New Year of between 2-10%.  However, sources at Waterland contested this and argued that the restrictions would come in over several years.

In Germany, Poland and the Czech Republic, public sector hospital outsourcing of labs has taken off, making radical growth a real possibility. In Germany, we estimate that hospitals outsource and contract out no less than €700m of business a year. But this has not happened in Belgium, and lab sources think it is unlikely to do so. De Quinnemaar said: “Senior lab doctors in the public and not for profit sectors receive commissions based on the number of tests they carry out and so have a financial interest.” Other sources say that, culturally, hospitals regard their labs as essential and, because of the way they are paid, often see them as profit centres.

Our report Diagnostics in Europe - Markets and Opportunities covering both radiology and labs across 15 countries will be available early in the New Year. Contact Max@healthcareeuropa.com for more details.