Centric Health, the largest provider of primary care by revenue to Ireland’s 2.3 million privately insured patients, is planning to expand both domestically and abroad. Despite making a loss two years in a row, CEO Maurice Cox tells HBI the company is in good financial shape, and has been spending to grow.

Intelligence users can click here to see our company entry on Centric Health.

Since 2015, the private-pay primary care market in Ireland has become dominated by Centric Health, which has been buying up many of the small and medium-sized players. It now has 120 GPs across 57 clinics and serves over 13% of Ireland’s privately covered patients, and over 6% of the total Irish population. There is no other for-profit company close to such a significant share of the primary care market in Ireland.

A look at the accounts paints an interesting picture. Centric’s annual revenue for the financial year ending June 30 2020 was €62.6m (up from €54m the previous year). Impressive gross profit of €301m (a 49% margin) did not account for fixed costs such as rent. Once fixed costs were accounted for, the company incurred a loss of €5.4m, even before interest and tax payments. After interest payments (which totalled €6.4m) and tax were taken into account, the company made a loss of €11.332m. 

This was not a Covid-induced blip: in 2019 it made a bigger loss of €12.5m. 

CEO Maurice Cox assures HBI that Centric is on track: “I can tell you we are in good health financially. We have grown the top and bottom line significantly over the last three years while making significant investments in our team, our practice infrastructure and a new digital platform for our patients. We are privileged to now look after over 300,000 patients in Ireland and we entered the Dutch market in early 2020 and now look after 50,000 patients there.”

The move into the Dutch market marks the first time Centric has expanded its primary care provision beyond Ireland. It now operates four GP clinics in the Netherlands.

Within Ireland, the company has also been active in the diagnostics space. Until last year, it owned Global Diagnostics Ireland, which provided eye screening, diagnostic managed services and teleradiology to patients across Ireland. It was sold to Medica (the UK’s largest teleradiology group) for €16m in Q4 of 2020. In the year to June 30, 2020 it had a revenue of €7.3m and EBITDA of €1.1m.

“Global was divested following a compelling bid from Medica PLC and the divestment allows us to focus on primary care both in Ireland and other European markets. The plan for the next couple of years is further GP practice acquisitions, investment in our digital platform and the launch of some innovative and exciting new primary care services (such as remote management of heart failure) that traditionally were delivered in a secondary care setting.”

Our analysis: It’s not at all unusual for companies to temporarily make losses whilst they are investing heavily and expanding rapidly. It is worth noting that traditional (as opposed to digital) primary care isn’t the most profitable area of healthcare; profit margins are typically low as there are limits to how much patients are willing to pay for GP consultations and in order to attract doctors into primary care, GPs have to be offered similar salaries that doctors in more specialist (and often more profitable) areas can make. In addition to this, since primary care is traditionally carried out at the individual practice level, there aren’t always huge economies of scale that practices can benefit from by being part of a larger group of primary care clinics.

With over 5,000 patients per clinic and 2,500 patients per GP on average, it does not appear Centric’s existing capacity is currently being drastically under-utilised. Its future success may depend on its ability to harness the power of new digital tools and integrate other aspects of care (outside of primary care’s traditional remit) into its business model.