Fresenius Helios launches a revolutionary primary care offer
Fresenius Helios plans to become the first and only global health care service player by rolling out its Curalie telehealth plus a prefab diagnostic unit (the Cube) offering in Vietnam in October. Deals are being struck with governments in Ghana and Kenya for the group to offer primary care for just €10 per capita to tens of millions. How does it work and who will be the customers? We talk to Fresenius Helios CEO Franceso de Meo following the Cube’s launch in Leipzig.
Click here to read more about Fresenius Helios and here to read our cross-national report on the primary care sector in HBI Intelligence.
De Meo exudes the infectious enthusiasm of a crazed, somewhat cuddly, start-up entrepreneur, Which is odd. He is the long-term, fifty-something CEO of Europe’s largest hospital group, Fresenius Helios, a group with a reputation for Teutonic efficiency. Just ask the union leaders he has tangled with. Or the medtech salespeople who have been excluded from Helios hospitals as he drastically reduces procurement costs. Yet the company, a byword for managerial efficiency, is run by someone with a convincing elevator pitch, charm and a lot of unruly hair.
The Cube is a €100,000-300,000 prefab unit which contains up to four consulting rooms and a bunch of basic imaging and diagnostic kit. The idea is that it provides the diagnostic capability to complement Helios’s Curalie telehealth app which contains diagnostic algorithms created by its doctors. The plan is to offer much lower cost healthcare treatment to the world and to enable Fresenius Helios, Europe’s largest hospital chain to expand globally without having to buy hospitals.
De Meo says that the offer will provide a mix that is 80% online and 20% offline. Initial consultations with doctors over Curalie would be followed up with diagnostic tests if necessary in the Cube. Patients can then be referred into local hospitals or to specialist doctors within Fresenius Helios.
He says the model provides extremely cost effective care. “We calculate that we can provide primary care for 500,000 people with a Cube and four doctors.” This is an extraordinary claim. It appears to reflect first that many individuals will not be ill in any given year. Secondly it includes an assumption that average sessions will be ten minutes. This reflects the fact that Curalie has diagnostic algorithms which the doctors can refer to. He points out that this means that just 150 Cubes could look after 70m people’s primary care needs.
De Meo says he started with the assumption that the model would only work in countries which lack healthcare services. “Every German is covered and they can always go to an emergency room so where would the demand be? So we thought it would be 2-5 years before we could launch the Cube in Europe.” But he says at Leipzig he was surprised at the interest. “Insurers and government sources pointed out that in rural Germany they struggle to provide primary care.”
So how will Helios roll the model out in Vietnam, Ghana and Kenya? And how did its earlier experiment with a low cost primary telehealth subscription offering, at €7 a month, work out in Spain last year?
In Vietnam, Cubes will be dropped in industrial estates where he says 3-5m people work. Manned by pharmacists, they will provide diagnostics to back up the Curalie service. “In Vietnam you need a pharmacist license to do this so that is the route we are going down.” He expects the payor to be the employer.
In Ghana and Kenya the model is different. There the targets will often be local doctors. “They lack the diagnostic back up, they tend to work in hospitals and they lack things like medical records. We can help them with all of this.”
In Ghana the aim is to provide care in rural areas in Kenya in Nairobi. Nurses he says can be trained up to provide much of the test capacity.
In Latam, where Helios is a major hospital player in Colombia, the aim will be to use the Cube and Curalie to build a low-cost outpatient network that can refer patients into local hospitals.
So what happened in Spain last year where De Meo launched a €7 a month telehealth B2C subscription offer? De Meo won’t talk about how many subscribers it has picked up beyond saying that Quiron Salud, its hospital group and the largest player in Spain carried out 1m telehealth sessions last year. That includes patients covered by healthcare insurers as well as individual subscription sign ups.
I suggest that getting individuals and their families to sign up for subscription services must be extremely expensive. How can he justify the upfront marketing cost given that the service only costs €7 a month? Interestingly, he disagrees. “We are not spending a lot on marketing, merely responding to people who have this need.” In other words Quiron is using the web to capture requests for services it can offer as a subscription. He adds: “Yes we are competing with pure play telehealth operators but we have the capacity and the range to respond immediately. You have to be able to offer people an immediate appointment within 24 hours, rather than in a few weeks time.”
De Meo is also talking to insurers about a white box offering to which they can affix their own brand. “Insurers place a high value on this sort of service offering.”
All of this plays into the bigger corporate picture for Fresenius Helios. Its parent Fresenius SE faces increasing demands from investors to break up. They argue that the giant conglomerate has far too complex a story and so is heavily undervalued. Fresenius SE has indicated that it is willing to accept external investors or even sell off some divisions. It sees Fresenius Kabi, its global perfusion and medicalised homecare arm as its star player and has made it clear that it won’t use share issues to raise new money for Helios.
It is clear that the Curalie/Cube primary care business if were an American start up could probably raise billions and would attract a massively high multiple if floated on NASDAQ. None of that has escaped De Meo’s beady eye. He argues that Helios has the capacity and scale to rapidly grow its telehealth/primary care offering in a way which other digital groups simply lack. He is probably right.
Not that he needs the money right now. “We’ve developed Curalie on pocketmoney – €6-7m PA for the last 3 years. We can develop and roll out the Cube in the same way.”
He adds, perhaps disingenously: “In the last few weeks we have had a lot of investor interest in what we are doing”. Well that is a surprise, isn’t it? Whether Curalie/Cube needs the money or not, it is unlikely that a spun-off Fresenius Helios would have any trouble at all persuading investors it is worth billions. Note that De Meo is intent on building a new global brand- Helios Global Health with Munich brand agency Thjnk. The word Fresenius is conspicuous in its absence.
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