How billionaire Vladimir Yevtushenkov created the largest medical business in Russia

The owner of AFK System has built the country's largest private network of clinics Medsi. Will he succeed in taking away the patients from the public health facilities?
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In March 2012, in the children's clinic of the Moscow Mayor's Office spread rumors about its imminent sale. The building is near Patriarch's Ponds frequent incomprehensible Commission: sizing evaluated. And in August, the staff was asked to write two statements: the dismissal of the State Unitary Enterprise "Medical Center Administrative Department of the mayor and the government of Moscow" and a job in the company "Medsi" belonging to AFK "Sistema" Vladimir Yevtushenkov (№23 in the ranking of richest Russians according to Forbes; the state - $ 6.7 billion).

"Transferred clinic to work seven days a week, almost halved the reception of patients by doctors, the second shift was extended for an hour, until nine at night, did retseptsionistkam 13-hour working day, - says the former clinic employee. - Patients such a schedule is more convenient, but the doctors started to quit. And at meetings one conversation clinic should become profitable "!

The struggle for profitability explained simply. Just swallowed "Medical Center Administrative Department of the mayor," the country's largest private network of clinics to the end of 2012, has lost 85% of the profits. <br />
"Profit and she had to drop, - explains in the interview of Forbes Yevtushenkov - because we have poor, difficult child."
But he failed a second time in life to privatize a large share of the capital property. For the first time such an operation he carried out in 1993: working as chairman of the Moscow City Committee on Science and Technology, Yevtushenkov has created AFC "System", which included the establishment of its enterprise committee. And this time, giving 25% in the capital of the network "Medsi" he received several clinics, three major hospitals, three sanatoriums and affluent clientele - Thousands of Moscow officials. Did Yevtushenkov create a successful medical business through a partnership with the state?
Suitcase without a handle

AFK "Sistema" is associated with the telecommunications, real estate, trade and the oil industry (now she belongs to "Bashneft"), but not with medicine. Although the first medical institution appeared in Evtushenkova Corporation in the early 1990s. Then, the AFC held the shares in the "Intourist", with whom he had served by foreigners clinic №6 gorzdravotdela in Tuzinskom lane. "I wondered make her clinic to treat their staff - the billionaire says - no one then thought about the medical business." Health Center was named "Medsi".

insurance companies have banned to enter into agreements with LCA return unspent contributions to the insurer. With this trick companies paid salaries gray. After the break-in period, insurers have lost this, they began to develop the business without the quotation marks: in 1997, according to the Moscow Health Committee, paid medical services benefited about 4 million Muscovites. However, "Medsi" remained a medical institution "for the" before 2002, when the Moscow government issued the "System" alarm building clinic at the Grand Pirogov, from which even had evacuated staff. In a specially created company "Medsi II» Yevtushenkov received 75% and the duty to recover the wreck, equip it and hold. When the reconstruction is over, "Medsi" lured some doctors from the Medical Complex Office of Presidential Affairs that Mitchmaternal Avenue. "Our services are faster and better, and the doctors brought their patients", - says Yevtushenkov.

Go shopping

In the mid-2000s the market of paid medical services grew rapidly. According to the "system", but its volume has increased by 18% in 2006, to $ 5.3 billion, but revenues medical direction most "systems" grew faster -. 69%, to $ 16.9 million in the same year. It was at this time, the process of expansion of the areas of adult clinic and reconstruction of the nursery. Business proved to be promising, was the meaning of it to expand.

In 2007, the "System" for $ 750 million sold to a German insurance company Allianz 49,2% of shares of the insurance company ROSNO and almost simultaneously bought the assets of the former medical ROSNO: Moscow clinic VIP-American Medical Center and a network of 15 family clinics "Medexpress". The amount of the transaction "system" is still hiding. All this took place in a single package deal, said the former president "Medsi" Vladimir Gurdus. By combining medical assets in a single company, "Sistema" has raised $ 62.2 million loan fromRussian subsidiary of the South African Standard Bank and began to build a network of federal clinics. Then, in 2008, "Medsi" negotiated even with "Pharmacy Chain 36.6" purchase belonged to her European Medical Center, however, in the tender went to EMC for $ 110 million to Igor Shilov.

At the same time, "Medsi" beginning to computerize the clinic, to implement CRM-system and create an Internet portal for patients, giving them access to personal medical records, doctors' prescriptions, etc. In 2008, revenues "Medsi" has almost doubled -.. To $ 124.8 million, and its share of the Moscow market of paid medical services has increased from 0.85% to 1.2%.

In 2009, at the height of the crisis, the owner of the "System" found that "all businesses fell, and increased health."

Revenue "Medsi" rose again - by almost 30%, while, for example, MTS decreased by 17.5%. Yevtushenkov, according to him, I realized that medicine can bring much more with the right strategy. "By investing in small clinics initial reception, which do not add value, we made a lot of mistakes - he argues. - Then he realized thatOur client - a "Business +" and he wants the whole range of services. " Everything - from the initial reception in the clinic and diagnostics to outpatient and hospital.

rejected strategy

In 2009, to implement a new strategy for the team came a new president "Medsi" Igor Salita - up clinics network he led the network gambling halls "Jackpot". Salita, he said in an interview of Forbes, set a goal to achieve in the clinics network "wow effect", and to start off with a dozen doctors and managers in America to gain experience.

In America, a lot of them were surprised. For example, hospitals in which, in order not to spread the infection, independent ventilation has been installed in each room. Information system, which tells the doctor whether the patient allergies, is included in the insurance plan and how to choose an individual dosage of medication. But most of all, according to Salita, they hit the system of certification of hospitals and clinics Joint Commission International (JCI). In this system, the greatest sin - this is when a medical error concealed, not dismantled, and did not rule out the opportunities ofbe its recurrence. "In the States, if the hospital is not of JCI, the insurance company will not work with it," - explains Salita. US quality management standards "Medsi" even laid a new, adopted in 2010, the strategy.

She had to turn to the usual state of medicine and former development of the company "pyramid" investment. Previously, it was the basis of mass polyclinic reception. In him and were major cash infusion. The new business model focused on high technology for the diagnosis (with OIBDA, Operating income before deduction of depreciation at 30%), surgery and inpatient care (45%), and grassroots clinics (20%) were to be the primary "filter" for outpatient treatment and to identify patients in need of high-tech treatment. In the center of the network was supposed to create powerful metropolitan hospital with all kinds of medical high-tech. Doctors and managers planned to be sent to training in the famous American Medical Center Johns Hopkins and other foreign hospitals. It was assumed that approximately $ 300 millionInvestment in the project will be obtained from most "systems" through a bank loan and from the IPO, scheduled for 2012.

Sabi Dorotovich, executive director of Johns Hopkins, said that specialists of his clinic several times visited "Medsi" and helped to prepare for accreditation of JCI "American Medical Center", in which "many procedures, especially the management, were absent, and it was necessary to create from scratch". However, in mid-2012, he was informed that the work will not continue. What happened?

In June 2011, the Moscow government is committed to the sale of non-core assets included in the plan of privatization of the State Unitary Enterprise "Medical Mayor administrative office center", and Vladimir Yevtushenkov went to City Hall with a proposal to merge with State Unitary Enterprise "Medsi". "For them it was a subsidized car, and I said that in a few years we can do an IPO, and they will be able to sell its stake and help out at all other money," - says the owner of the "system."

Without investor

The merger of the State Unitary Enterprise "Medical Center" and "Medsi" went all the 2012 andpart of 2013. The company has received five Evtushenkova clinics in Moscow, three hospital and three health center in Moscow and the Crimea. As a result, a network of "Medsi", not counting hospitals and health centers, has grown to 22 clinics in Moscow and 11 regions and more than 80 health centers throughout the country.

The owner of AFK "System" has built the country's largest private network of clinics "Medsi". whether it will be possible to take patients in public health facilities?

The deal with the city government issued a repurchase of additional shares "Medsi" by closed subscription. After due diligence SUE handed "Medsi 'assets by 6 billion rubles and received 25.02% of the company.

Originally it was planned that the transaction will be more complicated. In May 2012, Yevtushenkov told Forbes, that it will treasure participating US company APAX Partners, which invests in large medical assets around the world. For APAX released an additional issue for 25% of the shares, for which the Americans had to pay $ 200 million. However, the deal with PMU was closed, and the investor did not come.

Yevtushenkov says that he slowed down the process. The deal with PMU brought, etc.about him, "the old assets", but now "Medsi" started construction of several new facilities. An additional issue of "System" covered his own $ 200 million. And with APAX relationship is not interrupted, says the head of the AFC, the Americans, he said, "are on stand-by». Dmitry Rodionov, Head of Russia and CIS in the APAX, the questions are not answered Forbes.

growing Pains

SUE "Medical Center" was preferred to the Moscow government medical institution. Up to 75% of the revenue it provided the Moscow government order, which officials were attached to hospitals and clinics. Often, the PMU is the only participant of the competition, and battered him considerable sums. So, in 2011 he won the 162 competitions (in the amount of 3.4 billion rubles) of 188, which was allowed. All proceeds Gupalo, including contracts, paid by cash, amounted, according to the "SPARK-Interfax", 4.5 billion rubles. However, only the order of the Office of the Mayor of the capital's businesses and the government has brought 2.8 billion rubles. In hospitals and clinics Gupalo treated not only the heads and employees of the city government, and chibureaucrats councils and employees of municipalities.

In 2012, when the merger took place, the PMU has received government orders almost 3 billion rubles (with total revenue of 4.7 billion). According to the president "Systems" Michael Shamolina, price fixing one official is approximately equal to the average market value of the corporate insurance LCA.

It seemed to "Medsi", which at the time the merger GUP hired to carry out their orders, it had to be easy money. But no.

Even the transfer of customers filing Gupalo was difficult: in its institutions was not a common IT-system service portfolio does not coincide with the proposals "Medsi", 7% fall in the average ticket price. The costs of the merger organization collapses indicator OIBDA «Medsi" by 17.9% in the first half of 2012. At the same time the company received a loss of $ 3.4 million (a profit of $ 4.5 million in 2011).

"Medsi" economy. Closes inefficient clinics, centralized orders, reduced costs - mainly due to marketing budget. And in 2012 it managed to finish with minimal profit -. $ 0.9 million As a result of the company's revenue rose by 12.5% ​​to $ 223.9 million, tot he visits increased by 20.9%, to 5 million. The growth of these indicators provided in the main merge with the city GUPom believes Shamolin.

In 2013, "Medsi" participated in the Moscow competitions already own - as earlier fought for orders in other regions. Today, the share of government contracts in its revenue is slightly less than a third, the payment in cash through cash - about 20%, the rest - LCA and direct contracts with legal entities. For comparison: in the EMC on the cash accounts for 70% of revenue.

At the end of 2013 OIBDA and revenues grow, forecasts Shamolin. During the first 9 months of 2013 OIBDA has already exceeded $ 31 million and revenue of $ 216 million. The effect of the merger with GUPom will be visible only after a year, he calculates. By that time in clinics and hospitals Gupalo put new equipment, teach staff to use this technique, instead impose a fixed salary division into constant and variable parts, as in the rest of the company. In the meantime, competitors Evtushenkova by non-state medical glancing down on him. The main owner of EMC Igor Shilov believes that "Medsi" is not a direct competitor or his computerNII, nor of "Medicine" Gregory Roitberg or perinatal clinics, "Mother and Child" Mark Kurtser (№112 ranking in Forbes, the state - $ 950 million). There are two reasons, says Shilov. The "system" is the hydrocarbon business, which will always come first. In addition, the management of "Medsi" more involved managers, not owners. "I, and Kurtser Roitberg 24 hours a day spent on medicine, we are constantly in the clinics," - he explains.

Two poles

The clinic at the Georgian Lane chief doctor "Medsi" Professor Gennady Konovalov shows the center of innovative medical technologies, where the wards transparent tube fed patients blood to the imported apparatus, which is separated from her muddy, congested "bad" cholesterol plasma chased her through a column packed with sorbent - large light powder, and then re-purified plasma is combined with leukocytes, erythrocytes and platelets and red stream is sent back to the vein. The main thing here is not machines, and a sorbent composition of which is designed with the participation of a group of scientists Konovalova.

"You see this beautiful woman?" - Konovalov gets reproduction "Mona Lisa" and indicates the formation of yellow on her age and swelling on the hand.

"These are signs of hereditary atherosclerosis, and be in it, our sorbent, would she lived much longer," - he jokes. Sorbent draws the process of occurrence of cholesterol plaques reverse, saving patients from even coronary bypass operations.

Such procedures - one pole work "Medsi" it affects the upper and middle price segments. On this pole do, for example, check-up, a complete diagnosis of the organism in a single day, as a result of which the patient receives a ledger with a comprehensive description of the health status of all organs and the risk to the body. It is necessary to survey 15 000-100 000.

The other pole - obtained from Gupalo Hospital №3, in which "Medsi" experiment launched service CHI patients.
Leonid printers, Moscow Vice-Mayor for Social Policy, argues that private companies are eager to OMS system, but only wish to provide services with the highest rates & mdash; total joint replacement, bypass surgery of the arteries - although it may well do, and public hospitals. The difference is that the public hospitals are obliged to take, and for those patients, which suffer losses. "Brought to the Kursk station the homeless with pneumonia - they must be treated, - he says. - If commercial companies come to the MLA, they must not only rely on the cream. "

However, private traders who came to the MLA and "milk" goes to "low fat". Fares CHI city budget pays considerable amount (41 billion rubles in 2013 and 37 billion in 2014, the amount is reduced due to the growth of tariffs OMC), which do not go to the Fund of obligatory medical insurance (HIF), and directly in public health facilities. They are used to increase staff salaries, otherwise it would be left up to 95% of the tariff. "Private traders" do not receive this additional payment. They do not earn on margin, explains printers, and technological and bed turnover. He means that in addition to the tariffs for particular service have tariffs for the so-called finished case of treatment. Moscow deliberately untied theArif from the deadline laid on standard treatment, and if the doctors say that the patient recovered, he discharged earlier than the "standard" life, but the hospital receives the full fare.

In "Medsi" and come, says the president of "System" Shamolin. "This is not charity, but a solid calculation, - he explains. - While the hospital is not profitable, but due to the volume already close to breakeven. " In "Medsi" hope that OMS tariffs will rise, and the government will allow the co-financing: a person insured under the MLA, will have the right to receive quality service, pay the difference between the tariff and its market price.

CHI rate, for example, in nephrostomy (kidney drainage) is 2225 rubles, and the price is in the hospital №3 «Medsi" when paying in cash - 5,500 rubles. In Forbes government official speaking on condition of anonymity, lamented that MHI tariffs - it is so little money that people do not want to deal with public medicine, because a serious illness to cure them. "We are counting how many really need thats system work, "- said Forbes said.

And Evtushenkova new ambitious plans to build on the basis of "Medsi" "medical Skolkovo" - Moscow International Medical Center.

Now, together with the Moscow government "Medsi" drafting a federal law on MMMTS, invites other private medical companies and not spend money. Investments can be up to $ 1 billion, "I have absolute faith that the money we do not lose, -. Says Yevtushenkov. - Because the man always will be spent on three things: on food, children and health. "