Market concentration of the Brazilian hospital medical supplementary health system

Abstract

Background The Brazilian supplementary health market has undergone transformations in recent years due to constant mergers and acquisitions of by large corporations, contributing to the increase in market concentration, especially in the poorest and least developed regions of the country. Thus, given the care it provides and its economic relevance, understanding the fundamentals of these movements, the likely consequences and trends for the health market are relevant, important, and strategic. Objective To understand the general and specific context of Brazilian supplementary health, its scenarios, and trends, with emphasis on the analysis of market concentration and recent mergers and acquisitions. Methodology The research is applied, descriptive and exploratory and uses secondary data from various sources, submitted to quantitative data analysis methods. The data are organized into three groups: historical and regulatory documents; industry data; and market. Results The results show the growing concentration of the market promoted by large publicly traded corporations, the growing relevance of tech startups on the healthcare landscape, the predominant use of the relative valuation model, with implicit multiples for asset pricing and the prevalence of corporate health plans. Conclusion The growing concentration of the system projects a market with fewer options and less competitiveness, since the growth of large operators is evident, in addition to the relevant increase in the number of complaints from users of the system, which signals the growing gap between the expectations of users and the levels of quality care offered. The study also highlights the predominance of corporate health plans, revealing the direct relationship between access to supplementary health services and employability rates. The analysis of M&A operations, in addition to the increase in market concentration, reveals the prevalence of the use of the relative valuation model and implicit multiples for the pricing of traded assets. This denotes the future expectation of wealth generation, at least equivalent to the historical series of the sector, on the part of investors, whose frustration may signal the decreasing attractiveness of resources and M&A operations in the sector in the coming years.