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Prepaid versus Government: who are the owners of the Argentine private medicine business

2024-04-17T15:12:35.361Z

Highlights: The Ministry of Economy is working on a complaint against prepaid companies. It will present this Wednesday before the National Commission for the Defense of Competition (CNDC). Almost 70% of the market is concentrated in six entities, according to the cartelization complaint presented by the Civic Coalition. Who are the businessmen behind the companies and associations that dominate this industry and what audience each one targets? The Government wants to roll back the increases in plans that reach 154% so far in 2024: 40% in January, 27% in February, 20% in March and up to 19% in April. The "cartelization" to which the Government refers has to do with the alleged agreement between the private medicine companies with the Health Union for "attacking free competition." The complaint is similar to those managed by the UAS, which is the main player in the market. Swiss Medical is the second private prepaid medicine provider in terms of number of members. The Government estimated that Swiss Medical received US$13 million in subsidies collected in the pandemic through the ATP and REPRO mechanisms. The third player in the industry is Galeno Life, with 8.3%. In fourth place is Sancor Salud, with 7.8%. The group also includes Galeno ART, its occupational risk insurer, and Galeno Life. It was born as a mutual in 1973 under the umbrella of the cooperative Sunchales, Santa Fe, which is now in crisis. It is now run by Jorge Aufiero, who is the son of the former president of Argentina, Jorge A. Aufero. In 2018, it acquired Compaa Financiera Argentina (CFA), which belonged to Banco Galicia. It currently provides coverage to more than 750,000 members of its insurance arm, Galeno. It also owns La Trinidad Sanatoriums.


Almost 70% of the market is concentrated in six entities, according to the cartelization complaint presented by the Civic Coalition. Who are the businessmen behind the companies and associations that dominate this industry and what audience each one targets.


The Ministry of Economy is working on

a complaint against prepaid companies

that it will present this Wednesday before the National Commission for the Defense of Competition (CNDC) for alleged cartelization and seeks

to roll back the increases

, a request that hundreds of affiliates made individually from the beginning. of the year with precautionary measures, after increases in plans that reach 154% so far in 2024:

40% in January, 27% in February, 20% in March and up to 19% in April.

The "cartelization" to which the Government refers has to do with

an alleged agreement of the private medicine companies

that make up the

Argentine Health Union

(UAS) for

"attacking free competition",

which the Civic Coalition had already denounced in January. This was stated by the leaders Hernán Reyes, Maximiliano Ferraro, Ruben Manzi and Facundo Del Gaiso.

According to the legislators, "

prices were raised in a coordinated manner

." Along these lines, they pointed out that, with DNU 70/2023, the President left

"regulation at zero"

and now it is necessary to debate "what type of regulatory framework is needed for competition to be real."

The competition referred to by the Civic Coalition and the Government is limited to a few players.

Six entities concentrate 69.8% of the market,

according to data derived from the text of the complaint and similar to those managed by the UAS.

Who owns OSDE?

OSDE

is the main player, with

a 31.1%

participation. Unlike the rest of the actors that follow it in the ranking, it is a

non-profit civil association.

"It is made up of a board of directors that elects the authorities and manages the funds of its members," sources in the sector said, adding that

the other participants are public limited companies.

OSDE's number one is

Luis Fontana

, a surgeon who trained in hospital surgical wards and has worked in the organization for 30 years. Since 2018, he has been CEO. Previously, he served as medical director.

The main difference with the other two prepaid companies that follow in the top 3 is that OSDE

is a pure financier, not a lender.

That is,

it does not have its own health centers

. Of its 2.2 million members, around

25% are direct members

- who pay the entire fee out of pocket, most of them monotributists and seniors - and

75% are corporate members.

Belocopitt, behind Swiss Medical

In second place is

Swiss Medical

, with a

14.8%

market share. At the head is the number one in the sector,

Claudio Belocopitt

, who until this Tuesday was the head of the UAS. The businessman linked to massista management is

a partner of José Luis Manzano, Daniel Vila and Gabriel Hochbaum

in the América media group.

He entered the sector with the purchase of

Clínica Suizo

at the end of the 90s. In 2021, he expanded the businesses of Swiss Medical Group - a holding company that also includes

an insurance firm

- and bought 50% of the share package of the Instituto Cardiovascular de Buenos Aires

(ICBA)

, while in 2022 it entered

Medicus

with the purchase of 30% of the shares that were in the hands of its founder,

Jorge Aufiero.

Swiss Medical is the second private prepaid medicine provider in terms of number of members, with

more than 1 million members

. Meanwhile,

Medicus was eighth in the ranking,

with 240,000 inhabitants and a share of less than 4%, at the time of the acquisition.

The Government estimated that Swiss Medical

received US$13 million

in subsidies collected in the pandemic through the ATP and REPRO mechanisms, which served to pay salaries of the employees of its firms (including some that, according to the Government, did not carry out activities considered " essential" during quarantine).

Galen

The third player in the industry is

Galeno

, with

8.3%.

Founded in 1985, its owner, the Quilmeño surgeon

Julio Fraomeni

, bought the

La Trinidad

sanatoriums in Palermo and San Isidro as part of the acquisition of the bank debt and suppliers of

TIM

and

Galeno Life

, companies that at that time were in the hands of the Exxel investment group. In 2018, it acquired Compañía Financiera Argentina (

Efectivo Sí

), which belonged to Banco Galicia.

With more than 30 years of experience, Galeno currently provides coverage to more than

750,000 members

in the country. The group also includes

Galeno ART

- its occupational risk insurer - and

Galeno Life,

which sells life insurance.

SanCor Health

In fourth place is

Sancor Salud

, with

7.8%

of the market. Although it was born as a mutual in 1973 under the umbrella of the

Sancor

dairy - a cooperative from Sunchales, Santa Fe, today in crisis -, it operates independently under the command of

Claudio Nari

, who took over as president of the entity in November. In 2001, it began its expansion nationwide and has more than 300 service points throughout the country that offer services to more than

700,000 people

and more than 3,500 client companies.

Medife

For its part,

Medifé

occupies

fifth place

and has a representation of

4.7%

. Founded in 2010, it belongs to the civil association

Acción Social de Empresarios (ASE).

Its president and owner is

Jorge Piva

, also director of the

Finochietto sanatorium

. It has 60 offices that serve more than 300,000 associates.

Mutual Hierárquicos

is the sixth entity that completes the list, with a weight of

3.1%

and

250,000 members.

In August, it turns 30 and was created by a group of senior employees of Banco Nación (BNA). Over time, the entity grew until, in 2007, it obtained the category of social work and three clinics.

Its founder and president is

Juan José Sagardía

, former treasurer of Banco Nación de Santa Fe, who became relevant when the subtreasurer, Mario César Fendrich, left him the note: "Gallego, I took $3 million pesos from the treasury and US$187,000 from box".

With a view to continuing to grow, the entity is moving forward to have its own university and with other projects: its own bank and education and tourism services.

NE

Source: clarin

All business articles on 2024-04-17

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