Case Study and Sample Slides for Healthcare Sector
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Sample Projects in Healthcare (1/2) Sr. no
Project
Client & Situation
Type of Study
Client Location
Project Region
Sub- Segment
Extent of Primary Research
1.
• Due-diligence of the financial model of a proposed specialty hospital
• A ‘Big 4’ consulting firm advising a • M&A hospital chain
• UK
• Hospital
• UK
• 70%
2
• Intelligence on the Drug Performance
• A leading asset management and • Expert hedge fund planning to invest in a Interviews pharma company
• US
• Clinical • US Research/ Pharmaceuticals
• 95%
3.
• Assessment of Aesthetic Laser Devices
• EUR 7 billion management consulting firm focused on • Market • Germany transaction advisory business, Assessment advising medical devices business
• Healthcare Devices
• US
• 40%
4.
• Evaluation of an • A PE with $30 billion in AUM, investment opportunity considering investing in hospitals in the acute hospitals in Greece market
• Hospital
• Greece
• 20%
5.
• Market of CRO in Kochi, India
6.
• Acquisition Target • A leading distributor of packaging Identification in medical • M&A and facility supplies supplies industry
• Market • UK Assessment
• Location feasibility for a CRO firm • Market • US in India wanting to expand base to Assessment diversify operations
• Canada
• Clinical Research • India
• 60%
• Medical Supplies • Canada
• 50%
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Secondary research www.sutherlandglobal.com January 11, 2013
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Target due-diligence Target duediligence
Hospital Feasibility
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Target due-diligence: Hospital Feasibility in the UK market Client • The client, a ‘Big 4’ consulting firm, was advising the end-user, an investor interested in funding a new private hospital in London
Client Ask • SGS was engaged to conduct a feasibility study and due diligence covering the following aspects: • Determine the potential for demand in the three identified acute service categories, namely, Cancer, Cardiology and Neurology, and benchmark proposed tariffs with prevailing rates for major service categories such as CABG, Angiography, etc. • Assess the current occupancy levels in London for in-patients and gauge the possible demand for out-patient consultations to determine possible revenues for the proposed hospital • Trends and outlook related segments such as international patient segment, namely, medical tourism and UK private medical insurance
Sutherland’s Solution • SGS conducted an extensive secondary research and reviewed the financial assumptions of the model provided, to design a discussion guide for validation of model inputs. SGS held in-depth, consultative and probing interviews with 9 Cardiac Surgeons, 12 General Practitioners, 5 Neurosurgeons, 4 Neurologists, 3 Equipment Vendors and 5 insurance companies to assess the demand environment for a private hospital in West London • Using a bottom-up approach based on demographic data of the region, SGS made a preliminary estimate of the market-size which was validated from competitive intelligence data gathered on-ground. Market segmentation was performed and key drivers of demand were analyzed in great depth
•Benefits to the Client • Provided an independent third-party assessment of the expected demand for services in the region of the hospital • Helped validate assumptions w.r.t pricing of surgeries and diagnostic services and provided necessary justification to tone down the volume expectations in key categories, namely, cardiology CABG, oncology therapies and acute neuro-surgeries • Helped assess support the project would receive from primary sponsors (i.e. surgeons) and made a recommendation accordingly © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
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Addressable market for private hospital segment is quite small, estimated at around 10,000 patients Addressable Market from HNWI ~2,500
# of HNWI X 750,000
Addressable Market from Domestic PMI ~3,400
Avg. household size5
Addressable Market from International Patients ~1,200
# of private medical insurers3
X
Source: SGS estimates, XXX reports
XX%
% of patients opting for private hospital2
X XX%
Ratio of patient to relatives
# of medical tourists
xx%
Prevalence rate of CHD4
X
# of patients in waiting list in England
X XX%
X
% of patients opting for private hospital2
XX%
X
% of patients opting for private hospital2
10.3%
England’s population as % of UK population
123,000 Note: Data has been randomized
X
Incidence rate of Angina1
98,000
Addressable Market from General ~2,500
X
2.5
1,787,000
Addressable Market ~9,600
Incidence rate of Angina1
1 UK’s incidence rate of Angina has been considered 2 Only a particular share of the total patients has been assumed to opt for private hospital treatment 3 Excludes HNWI having private medical insurance
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
XX%
XX%
X
% of patients opting for private hospital2 X%
5 An Assumption 4 Global prevalence rate of CHD is considered
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Volumes are dominated by PCI surgeries; valve operations and arrhythmia interventions have registered the fastest growth Cardiac Surgery
2006
2007
2008
2009
CAGR
PCI – Angioplasty
73,698
77,373
80,331
83,130
4.1%
CABG
24,566
24,959
25,913
25,657
1.5%
Valve Surgery
13,080
14,754
16,489
17,840
10.9%
156
129
122
98
-14.4%
31,440
33,834
38,253
40,091
8.4%
Heart Transplant Arrhythmia Interventions (Includes Pacemaker, ICT & CRT Implants)
Key Observations • Advancement in technology (such as cardiac CT Scanners) is leading to an early detection of ischemic heart diseases and resolution through simpler procedures
such as angioplasty • Valve surgeries and ablation surgeries have registered an above-average growth over the years
Source: SGS research, National statistics
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
Note: Data has been randomized
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Major drivers and inhibitors of demand for cardiac treatment in the private sector Explanation
Reduction in Waiting Time for CABG
Quick Response to Heart Attack Symptoms
Lack of advanced equipment at NHS facilities
• Owing to the Coronary Heart Disease National Service Framework (CHD NSF) launched in 2000, today no patient is required to wait more than three months for heart bypass surgery • This is a significant improvement from 2000, when more than 1,000 patients waited over a year for surgery, and from 1996 when some patients waited over two years
• Today, over 70% of people with heart attack symptoms are treated with thrombolytics (‘clot-busting’ drugs) within 60 minutes of calling for help, compared with approximately 24% before the launch of CHD NSF • Better primary emergency response systems can reduce the risk of heart damage and complications and can thus reduce the need for complex surgeries
• Considerable investment made by private clinics in latest technology CT scanners and other equipment have increased their clientele from the NHS network • Lack of advanced cardiac scanning equipment at NHS facilities leads to cardiac patients being referred to private hospitals for scanning and other diagnostic services • The European Scanning Centre, which invested £1.5m for a 3-D CT scanner, has been receiving considerably high number of patients from Harley Street for the 3-D CT scans since it purchased the scanner
Source: SGS primary research, company filings
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
Note: Data has been randomized
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Supply of cardiothoracic surgeons remains a concern as a majority are busy with on–call and elective commitments Cardiothoracic Surgeons Number of Cardiothoracic Surgeons
350
42.8%
Cardiac
275 220
Cardiothoracic Surgeons by Specialty (2010)
Cardiothoracic
250
24.1%
Thoracic
150
21.0%
160
2000-01 150
2004-05
Estimated Requirement*
2009-10
2014-15
Paediatrics
12.1%
Actual Availability
*Note: NHS Executive projected requirements for additional cardiothoracic consultants in England, November 2001
Note: Figures show areas of special interest as specified by respondents. Surgeons may have more than one area of special interest, therefore the above figures may total more than the number of surgeons
• Although UK currently has adequate number of cardiothoracic surgeons, majority of them remain busy with on–call and elective duties. According to a survey conducted by Royal College of Surgeons of England (April 2010), only 6% of total cardiothoracic surgeons generally get free from elective duties while covering on–call responsibilities • While 36% of surgeons surveyed expressed the desire to work part-time in the future only 38% of surgeons dismissed the need to work part-time and the remaining 26% were not sure • Surgeons prefer NHS over private hospitals as (i) they are hired on a salary basis, (ii) incentives for putting extra hours & (iii) they can make big name only through NHS hospitals Source: SGS primary research, Industry statistics
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
Note: Data has been randomized
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Many facilities undertook development of dedicated floors to cardiothoracic activity and critical care Hospital
Facility
Plymouth Hospitals
Nottingham University Hospitals
Oxford Radcliffe Hospitals
South Manchester University Hospitals Basildon & Thurrock University Hospitals
Capex (£ Mn)
Major Improvement Details
58.9
Two new theatres, a state of the art critical care and coronary care unit Four co-located 26-bedded wards An administration suite where all clinical specialists and support staff are located A shell for a new general critical care unit and a new expanded library
45.2
Includes specialist medical, surgical, nursing and critical care all under one roof New facilities with two cardiology catheter laboratories An overnight-stay ward and technical cardiology on the ground floor Inpatient Morris Ward containing 36 beds on the first floor Two cardiac surgery theatres and a 16-bed critical care unit on the second floor
32.6
Four catheter laboratories with an additional shell for a fifth catheter laboratory A new cardiology floor adjacent to the catheter laboratories A floor dedicated to cardiothoracic activity Separate ambulance and patient entrances from the hospital road
27.8
20 consulting examination rooms, stress test area including a five-room echo suite, tilt test, exercise and ECG rooms plus support rooms 26 critical care bed spaces (including 6 isolation standard spaces) and support rooms A 250m2 area earmarked for the provision of a cardiac MRI suite
75.2
3 cardiac catheter laboratories for tertiary activity and a shell for a fourth laboratory Cardiology inpatient and day stay beds 3 operating theatres and a shell for a fourth A 22-bed critical care facility; cardiothoracic surgery beds
Source: SGS primary research, company filings
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
Note: Data has been randomized
www.sutherlandglobal.com January 11, 2013
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The UK private cardiology market is fragmented with leading London providers controlling over a third of the market Share of the leading London providers in the overall UK private cardiology market
100%
12.0%
10%
8%
5% 65.0%
Total
The Wellington London Bridge Hospital Hospital
Royal Brompton*
The Harley Street Clinic
Others
Note: Private patients unit is considered The market share is based on cardiac surgeries conducted by the hospitals and is for 2008-09 Source: SGS primary research
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www.sutherlandglobal.com January 11, 2013
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Expert Interviews Intelligence on the Drug Performance Expert Interviews
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Pharmaceutical Expert Interviews Client • The client was a leading asset management company and hedge fund in the US. The fund was looking to invest in a pharma company that was in the midst of conducting clinical trials
Client Ask • The client’s major focus was on understanding future performance of a drug called XXX made by a leading pharmaceutical company in the US and which has passed Phase II & Phase III clinical trials. This drug is used for irritable bowel syndrome and chronic constipation and is prescribed by gastroenterologists • To understand the long-term efficacy of the drug, the client wanted to gain first-hand reviews from doctors involved in its trials . The client, therefore, wanted SGS to identify and interview the doctors and researchers involved in the trial of the drug • Major focus of the study was on understanding perceptions of leading doctors on the drug and its performance in the market. The client also wished to understand various technicalities such as comparison of the drug with already-launched competing products to determine its market-competitiveness
Sutherland’s Solution • SGS identified key doctors and researchers involved in the clinical trials of the drug through a multi-pronged approach of combing social-media, identifying patient groups involved in the trials and individually reaching out to them and searching the regulatory websites of agencies involved in the trial for mention of doctors and radiologists involved in the trial • In-depth discussions were held with the doctors and researchers to generate unpublished intelligence and make a more accurate assessment of the drug’s efficacy based on trial-results. SGS conducted 8 detailed interviews with leading gastroenterologists in the study
•Benefits to the Client • SGS research helped the client take a more informed call on the likely success of this drug and its ability to displace competition • Armed with this intelligence, the client was able to assess the likely impact on the company’s financials and if there was an investment case arising from the launch of this new drug © 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 11, 2013
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Sample of the Work
Š 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 11, 2013
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