Regina Maria hopes to checkmate competition after rebranding

Last month, Centrul Medical Unirea (CMU) and Euroclinic were rebranded as Regina Maria (Queen Mary), The Private Healthcare Network. The change was a natural step and has a strong strategic component, the company says. In 2011 Regina Maria plans to focus on further expanding as well as consolidating its position on the market. Fady Chreih, executive director of Regina Maria, told Business Review that the firm is considering buying two more local players this year, with funds from an overall EUR 30 million investment budget for 2011.

Simona Bazavan

Why “Regina Maria” and why several months after the takeover of Euroclinic?

2010 brought a few very important milestones for our company. At the beginning of the year there was the acquisition by Advent of 80 percent of CMU. In December there was the Competition Council’s approval of the takeover of Euroclinic. Realizing that we were talking about an organization with over 1,000 full- and part-time doctors which is, overall, the largest private healthcare network in terms of the number of polyclinics, hospitals and services provided, we realized that we needed a new name. CMU was a brand with 15 years’ experience behind it and Euroclinic was a brand directly linked to private hospitals, so we couldn’t pick one of the two names, but needed a new one.

Why Regina Maria?

Because we received the approval of the royal house for this name which stands for the personality of Her Majesty Queen Mary and all she has done for the Romanian people. And it represents us as an organization, mixing medical performance with a strong humanitarian dimension.

What were the costs of the rebranding process?

We are talking about several hundred thousand Euros. This includes the rebranding, changing the logo and the promotional campaign. The whole process was very thorough. We found ourselves in the textbook situation when the organization had grown to the point where it needed a new identity. For the rebranding we worked with Marks and for PR with the Rogalski Grigoriu agency.

How has the private healthcare market evolved since the beginning of the crisis and what do you think will be the outcome of 2011?

I see the market going up by approximately 15 percent in 2011. In 2009 and 2010 all players made major investments and this was reflected in the market. The situation of the public healthcare system also started worsening in 2009, automatically driving more and more patients to private providers. Both in 2009 and 2010 the market grew by more than 25 percent. The impact of the crisis was less felt in 2009. In 2011 I see a more moderate growth mainly due to the cash flow from the National Health Insurance House.

What can you tell us about the results posted by CMU in 2010?

2010 was a very good year for us from all perspectives – from the Competition Council’s approval of the fusion with Euroclinic, to consolidating the investments we have nationally, in Constanta, Cluj and Bacau, starting the project in Brasov last year and finishing it this January as well as our projects in Bucharest. Both medically and financially we surpassed our targets. In 2011 we will carry on with our new brand and several new investments. We will consolidate our position on the polyclinic segment in Bucharest by opening two new locations, in Militari and Berceni, thereby covering the capital almost entirely. Other investments in Bucharest and around the country will surely follow. We plan to further focus on the hospital segment although we already have five units in our network and we will open a sixth.

What is Regina Maria’s investment budget for 2011?

We have invested EUR 4 million so far in the medical campus in Brasov and another EUR 12 million is for the other projects I mentioned. All in all we have roughly EUR 30 million this year for organic growth and perhaps some more acquisitions.

Are you specifically targeting acquisitions or rather organic growth?

A combination of the two. We have a reached a certain level, and our present network allows us to offer our patients all the necessary healthcare services. So a potential acquisition in the country would have to be a very interesting one for us to pursue it. We have received several propositions and we are analyzing the details. What I can tell you is that there are currently two local players we are considering, one in western Romania and one in the central-north part of the country. These are providers who have reached a certain development level and realize that in order to continue growing they need the support of a national network. At the same time we are in no hurry and we want to be sure of the quality of the medical services we provide.

What was the company’s turnover last year and what are your expectations for 2011?

Both CMU and Euroclinic saw a turnover increase of over 20 percent last year and we continue to be on a very good trend. As I said, this year I see the private medical services market going up by approximately 15 percent. Of course there will be those of us who manage to post growth above this average and those who fall behind, but overall the market will continue its consolidation process. For Regina Maria we estimate another double digit turnover increase. There will also be medium-sized and smaller players on the market for which 2011 will be a challenging year.

Where do you see these challenges coming from?

There are three main issues. First of all, only a few of us have the necessary resources to continue investing in doctors, technologies and networks. The rest will simply not have the means to keep up with this. Secondly, as in 2010, this year we will also see cash flow problems for the private healthcare providers who depend too much on money from the National Health Insurance House. And thirdly, there is the issue of the Romanian patient who now expects certain standards. It is high time for this industry to

show maturity. I expect that low quality services will disappear as their time is gone.

How has the behavior of the private medical services consumer changed over the past couple of years? What makes Romanians chose one provider over another?

When it comes to private healthcare services, the Romanian patient has changed quite a lot. We are talking about people who are much more informed about their medical needs and more demanding than a few years ago, now that they have experienced the difference between the public system and private healthcare providers. Among our subscribers we have also noticed higher interest in prevention after we ran a series of programs in this area. There are still patients who go to medical centers abroad but we expect this to change in our favor.

Do you intend to develop and add new medical specializations to Regina Maria’s current portfolio?

This year we have consolidated our position both in Bucharest and around the country. We are looking at two or three new regions but other than this we are planning strong development in the hospital specialization area. We will continue to grow our existing specializations and we have some clear targets as far as the quality of medical services is concerned, but we also have a large number of projects in hospital specializations and we will continue to be innovative. We hope to announce the first complex medical interventions in the private system very soon.

simona.bazavan@business-review.ro

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