HBI 2021

New Vistas, New Opportunities

September 20-22, Westminster Park Plaza, London

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  • Sector: Dialysis
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Dialysis Market Report

€ million 

EMEA Overview: Dialysis

For-profit dialysis growth

€ million 

For-profit dialysis by country

Values 

Top companies marketshare (2020)

€ million 

COVID-19 update (May 29, 2020)

Global dialysis operators’ volumes have been largely maintained during the COVID-19 pandemic because patients cannot live without dialysis and the service is covered in full by the state (in developed markets). This is likely to be very different in emerging markets like India where patients pay cash. 

Having said that, profits will probably fall as infection control measures reduce efficiency and expenditure on 
personal protective equipment (PPE) goes up. 

We are therefore not adjusting our 2020 market size forecasts, although the long-term impact of the crisis on the size of the dialysis population is not yet clear. 

Renal failure patients have much higher mortality rates to COVID-19 than average, but this seems to have been offset by those with no pre-existing kidney problems whose infection has reduced kidney function and put them on to dialysis. The long-term impact on volumes will depend on whether the latter become chronic kidney disease sufferers. 

It is also worth considering the impact of changing numbers of kidney transplants, which reduce the need for dialysis. These have dropped sharply due in most countries because of reduced ICU capacity and the increased risk of COVID-19 complications for the immunosuppressed. There are a few small exceptions like Northern Ireland which has cleared one-third of its kidney donation waiting list during coronavirus.

There is potential for one silver lining of coronavirus to be a glut of healthy kidneys for donation, in the same way that the US opioid crisis has done, but there is currently conflicting information about whether COVID-19 can be passed through organ donation and doctors are erring on the side of caution.

Diaverum boss Moulavasilis says that COVID-19 is an opportunity for the group to build stronger relationships with payors. We think that the economic recession from the pandemic could prompt more and larger lots of outsourcing in the same way the 2008-2010 crisis did. 

Wolfgang Hofmann of competitor Fresenius says that tariff increases to reflect the increased costs of dialysis due to infection control measures are unlikely and, if anything, there will be a push to home dialysis for which reimbursement is generally lower. 


Introduction 

Kidney failure or end-stage renal disease (ESRD) is a life-or-death situation which requires blood cleansing, dialysis, to stay alive until a donor kidney for transplantation can be found. The service has been successfully industrialised in most developed healthcare markets and exhibits one of the highest private sector penetration rates of all forms of healthcare.

The private for-profit dialysis service sector totalled €5.45bn in 2018 across the 19 countries covered in this report (17 in Europe, Saudi Arabia and the UAE), and we forecast that it will grow 2.3% to €5.58bn in 2019. An increase in ESRD patients is the main driver of growth, with tariffs and additional outsourcing to the private sector stagnant in most countries.

The dialysis service and the accompanying costs for drugs and management of co-morbidities ends up being one of the largest cost areas for developed healthcare systems, while a lack of provision in the developing world means a tragic loss of life: 180,000 in India and nearly 50,000 in Nigeria each year. Across the world, the figure is probably several million.

But broadly speaking, dialysis technology has not changed very much in the last few decades. One operator has called it a graveyard of technologies and the promise of an artificial kidney or miniature dialysis machines have yet to materialise.

This sector overview and its adjoining country entries was written with the help of Vikram Vuppala, CEO, NephroPlus; Bjorn Englund, former president, Davita Europe; Stefano Ciampolini, CEO, UK Renal Services; Andrea Stopper, former Executive VP of Dialysis Services EMEA and of Western Europe at Fresenius Medical Care; local sources named in country sections and other current or former industry executives who wished not to be quoted. Many stats are sourced from national renal registry databases.

Opportunities and changing nature of dialysis service delivery

Types of dialysis

In-centre haemodialysis (HD) where patients have their blood cleaned in three four-hour sessions each week by large machines remains the bulk of the global market, at 90% or more. Some patients opt for home haemodialysis but penetration of this is generally just a few percent with the exception of countries like Norway and Finland.

Peritoneal dialysis (PD), which is generally used by 0-10% of chronic dialysis patients - 10-20% in the more forward-thinking countries - is usually self-administered at home. Instead of filtering the blood through an external machine, the abdomen is filled with a cleansing fluid, which filters the blood as it passes through the organ. Continuous Ambulatory Peritoneal Dialysis (CAPD) is done 3-4 times a day while Automated Peritoneal Dialysis (APD) is usually done at night. Patients receive the bags of fluid every few weeks.

Best practice standards are generally consistent internationally in dialysis, hence why it is the most internationalised and industrialised sector. The session number is consistent throughout developed markets while emerging market patients may undergo fewer sessions because of budget constraints.

But PD is effectively a pharmaceutical sector since patients usually do it at home without assistance. Some is also done in public hospitals. We go through the limits to PD penetration in the ‘threats to the sector’ section, and explain the extent to which we include it in our market forecasts in ‘Private sector market share and major operators’, both further down.

Some new treatment modalities are emerging. Haemodiafiltration is increasingly used in Western Europe and its less pronounced effect on blood pressure, compared with haemodialysis, may benefit those with cardiovascular conditions. Reimbursement is also a notch higher than for haemodialysis.

Ageing population driving kidney failure

With 70-80% of kidney failure caused by diabetes or high blood pressure, demand is growing as populations age. And in developed markets the average age of dialysis patients is also increasing meaning more co-morbidities and higher acuity patients.

This means that providers need to be able to care for more complex, intense cases. They must think more holistically and increase the competencies of the nurses and nephrologists, as well as work more closely with other hospitals and healthcare providers. Centres providing dialysis increasingly require ‘beds’ instead of ‘seats’.

Despite all this, the big international groups claim to have increased life expectancy of dialysis patients. All of our market growth figures in terms of patients are net of transplants and mortality (of those on dialysis). Very few dialysis operators do transplant surgeries; something the private sector shies away from generally because of complexity. One exception is Diaverum in Argentina. If there is a significant private sector activity in organ transplants it will be part of our hospital market size figures.

Emerging markets playing catch-up

Emerging markets are only just getting to capacity, which means a massive opportunity for international operators who can come in and prove quality and cost-efficiency. In Saudi Arabia, Davita and Diaverum have achieved KT/V figures (a measure of the clearance of waste particles from the blood) at least 50% higher than Ministry of Health centres and mortality rates that are half.

China, Latin America and the GCC are attracting the most investment and M&A by the big international providers. Africa and Southeast Asia are also huge and growing opportunities but harder to penetrate, while India has proved difficult due to a highly competitive landscape and low price points. Davita sold its Indian business to local outfit NephroPlus in 2018 as the price point was too low and it could not compete with local players.

Life expectancy while on dialysis averages 5-10 years in developed markets and 1-5 years in undeveloped markets because patients pay cash and skimp out on the full number of sessions or medication. A comparison is therefore not of much use, while quality may also be much lower in emerging markets.

Mortality while on dialysis is not compared internationally but we can see figures of 15-20% in Czech Republic and Italy, for example, and 5-10% in the UK and Finland, specifically for patients on haemodialysis. Mortality rates on peritoneal are much lower at around 5% since it is used when patients are at their most fit and healthy. The haemodialysis figures will be much, much higher in emerging markets like India and Nigeria, because of inadequate treatment scheduling.

Consolidation opportunities

There are inorganic growth opportunities in dialysis but these are more limited than in other outpatient healthcare sectors as dialysis is already industrialised and consolidated by the big internationals. Exceptions are the German and Swiss markets, which are still dominated by small nephrologist-owned clinics because of high or favourable tariff structures, while Russia is also comparatively fragmented with some sizeable domestic players to acquire. Italy and France are a bit more consolidated than these but not fully.

If you are brave enough, Turkey is still dominated by smaller groups but Diaverum’s exit from the country in 2016 points to a very tough market, currency notwithstanding. Then there are countries that have not been entered by the internationals, like Greece and Bulgaria. A strengthening of the regulatory framework here in future might rekindle interest.

Moving into prevention

Stopper has co-authored academic papers on the potential of machine learning to better predict the onset of chronic kidney disease and develop more advanced preventive healthcare measures. This presents an opportunity for dialysis service providers to extend the patient pathway and buffer themselves against future tariff pressure in dialysis.

One CEO told us: "We can remotely monitor dialysis patients or even simple diabetics to assess their conditions using AI to predict when we need to intervene. We could then move to a per capita model in which we are paid depending upon their achieved weekly wellness levels. Nephrologists could use technology to monitor patients remotely. We could have a central station in Europe where many of them are based or they could work remotely. Either way, tech should enable far higher levels of efficiency with algorithms warning nephrologists when patients need to analysed. We are working on all of this today but it does depend upon payors willingness to move to new models."

Portugal’s capitated payment model involves some early-stage diagnostics for predicting complications and development of co-morbidities whilst on regular dialysis. Netherlands and Sweden are also paying some providers on capitated models that include wider health management and diagnostics, but these do not involve private sector providers.

More outsourcing

Another economic downturn could force cost-cutting by governments, like was seen in the post-2008 period, which could mean more outsourcing of services. The public sector still dominates dialysis in the Nordic countries, UK, France, Switzerland and the GCC. Saudi Arabia is moving fast here, while we are told there could be additional outsourcing in the UK in the next few years.

Our market growth forecasts explained

Our market growth forecasts are based on:
- growth in dialysis patient population, net-of-mortality and net-of-transplants
- tariff adjustments, which might mean that one year is an outlier (the case in Hungary, Portugal, Poland and Saudi Arabia)
- if additional outsourcing is expected

How private operators get paid

A public payor-private provider market

Dialysis is usually 100%-funded by the public payor or statutory insurer in developed markets, while in some emerging markets private insurance and cash figures more, like in Brazil (30% of the total) or India (65%), as publicly funded supply fails to meet demand leading to a tragic loss of life. It is one of the few things that the United States government covers in full. Medicare spending on dialysis is around $15bn annually: 7% of the national insurer’s budget goes to End Stage Renal Disease (ESRD) patients (one-third for the dialysis service with the rest going on drugs and management of co-morbidities) but they are only 1% of the covered population. The same disproportion is seen in other countries.

Generally speaking, there are a number of ways dialysis operators treat public patients.

Outsourced tender contracts

There are tender contracts to run public centres for a set number of years, which are public in the sense that the referring public authority or hospital mandates all the number of patients, sessions and clinical decisions. The building and assets will usually be owned or leased by the incoming operator. Outsourcing of management-only is rarer.

Standalone clinics

You can also have standalone private clinics that can provide publicly reimbursed dialysis services to the general public where there is an element of competition. This is more common in cities or countries with an emphasis on freedom of choice, such as France, Switzerland and Germany. You can position yourself near public hospitals and offer your services this way.

Dialysis cost structure and ‘global’ versus service-only reimbursement

Tariffs also vary in inclusivity, sometimes only covering the cost of the session, sometimes plus drugs, food and/or transport and, rarely, management of co-morbidities.

Our private market size figures in the rest of this report will sometimes differ on what is covered and might not always be a like-for-like comparison. Generally we aim to provide the services-only market size but we say where our figures are broader.

Some markets have only been entered by the supplier-service providers (Fresenius, B. Braun, Baxter) and not the service-only ones (Diaverum, Davita) indicating the standard model of reimbursement is one covering services and drugs, making that the right way to measure the market. While in others, like the UK, services and medication are procured separately making a service-only market size figure appropriate. We say when it is which. Even so, aside from a few countries there should not be a massive difference between a service-only figure and one that includes drugs. The cost structure of haemodialysis is typically 82-90% for the service with 10-18% for the drugs.

Supply price erodes while services stable or growing

The growth in size and duration for dialysis equipment tenders has led to fierce competition by bidders bringing down prices, while the service side has seen both its patient profile and regulatory framework grow in complexity, dragging up the comparative price of services.

Equipment now makes up 12-15% of the dialysis service cost where this has happened the most (Italy, Spain, Germany, UK) and 15-20% where it has happened less, with some exceptions like France, Switzerland and the USA still over-paying massively for equipment, especially France. Drugs are getting cheaper because of the increasing availability of generics as patents expire, although there are also new, more expensive originator drugs.

The highest-volume supply tenders have been seen in Italy and Spain, says Stopper, as these countries faced the most severe budget constraints post-2008 and sought to cut expenditure on renal failure treatment. In Italy, nationwide tenders that fast-tracked the contracting process with regional and local public healthcare providers led to fierce competition by suppliers like Fresenius, B Braun, Baxter, Nipro and Nikkiso.

In dialysis services, two executives we spoke to say that the trend on tenders is the inverse, with shorter, lower-volume tenders. There are certainly fewer economies of scale with services than in equipment and drugs but our sources indicate it is mainly a political decision, with commissioners and policymakers not wanting to tie themselves in to one service provider for too long. It may also be linked to a general trend towards the de-centralisation of healthcare service commissioning, at least in some countries.

As services are getting more complex, with higher acuity patients, more co-morbidities and more stringent regulations, smaller tenders might be easier to organise. These trends in services make it less likely that you’ll get the fierce bidding seen in the supply tenders. The price resilience of services compared with supplies also highlights the business rationale of the service-only players, Diaverum and Davita. Especially the former, which was hived off from its supply partner (Gambro) by private equity investor EQT a decade ago, with which was then sold to listed global supplier Baxter.

Being more than “blood-washers”

Dialysis service operators tell us they would generally prefer all inclusive service payments as it would allow them to offer a more holistic service, rather than patients needing to go elsewhere for their medication, vascular access management and management of co-morbidities and complications. Although in theory this should be a win for all, operators can probably make a good margin off this hence payors might be less forthcoming in outsourcing the whole lot. And any scandal or slip-up in quality by private sector operators kills their argument for years.

More inclusive tariffs are more common in southern Europe and some emerging markets such as the GCC while northern European countries are much more limited in what they include. These more wealthy countries have faced less pressure to cut costs than their southern neighbours, especially post-2008.

Portugal is a notable European country where operators are now paid a capitated weekly fee, which includes dialysis sessions and some limited aspect of health management including vascular access management, which would usually be done in the referring/nearby public hospital.

Bjorn Englund and other executives we spoke to are strong proponents of wider-ranging capitation-based models but he says progress here is poor and that if it happens, the first movers will be either smaller budget-constrained countries (Portugal etc) or those transforming their infrastructure from the ground up (like Saudi Arabia).

One bundled payment covering all the co-morbidities associated with renal failure - diabetes, high-blood pressure, heart disease, obesity etc - would ensure better care for the patients by aligning care and by incentivising operators to get patients off haemodialysis completely or less reliant on it, perhaps onto peritoneal instead (usually the less costly of the two).

Including hospital admissions and complications in the bundled payment would transfer the risk onto the operator, incentivising them to prevent these and increasing quality of life for the patient while on dialysis. You could even include a bonus for getting them a transplant, something the private dialysis sector is accused, sometimes, of de-prioritising and even purposely preventing. It would save money for the payor while patients would not be moved to and fro between facilities for the different parts of their renal care.

Stopper adds that without more successful kidney transplants, the pressure on dialysis reimbursement will continue to increase, so it is in the private sector’s interest to facilitate this.

For Englund, it’s all about proving quality and efficiency without jeopardizing the care of the patient - if that happens the “private sector is dead.” This is difficult if the data is not available but also because public hospitals are often left with the highest-severity patients. That can drag average mortality and complication rates upwards, rendering public-private comparisons pointless.

Some American insurers have experimented with capitation systems for renal failure patients but this is difficult in dialysis. Davita had a population health and primary care business, which aimed to combine with dialysis for a more holistic, population-health approach to renal failure, but this was arguably unsuccessful and it sold the division to UnitedHealth for $4.9bn in 2018.

Payment systems are set up for fee-for-service and introducing quality benchmarking into payment structures is very complex, we are told.

Tariff variation

Tariffs vary wildly from country to country and are mostly cost-based as the sector is a high-volume, public payor market, but some macro trends have led to tariff pressure (Hungary, Russia, Romania, UK) or more innovative capitation models (Portugal).

A static budget in Hungary has driven down haemodialysis tariffs to just €75-80 per session excluding most medications, meaning it is now lower than poorer neighbour Romania, at €105/500 leu, and on par with the €73 per session (144 Leva) in Romania’s poorer neighbour Bulgaria. But Russia beats all with a €60 (5000 Rubles) tariff because of massive currency depreciation. Diaverum’s euro-revenue from there was stagnant from 2014-2017 despite double-digit Ruble growth (according to figures on Russian financial data site synapsenet.ru).

Meanwhile, countries that still use local tenders for equipment procurement (explained earlier) still pay out higher tariffs for dialysis, as they haven’t driven down costs in the way the southern Europeans have. Switzerland spends 500 Swiss Francs (€450) per haemo session while France is over €200.

Contrast that to Spain, whose market size implies tariffs of €100-130 per session, or Portugal which now pays €437 for three sessions plus drugs and vascular access management. These countries have used high-volume tenders for equipment procurement and heavy private sector participation to bring down costs.

Private sector market share and major operators

Private for-profit penetration varies by country. Currently it sits at a third in France and the UK, 25% in Italy and Switzerland, 11-12% in Germany and the Nordic countries and 40% in Saudi Arabia while the private sector treats all but the most complex patients (so 90-95%) in Romania, Hungary, Spain and Portugal.

The big international groups are Davita, which is in 12 countries including the USA; Fresenius Medical Care, also a major supplier, is in around 40 spanning all continents; supplier B. Braun provides services in 30; while Diaverum is smaller than all three but the most internationally diversified with none of its 20 countries counting for more than 20% of the business, we think. Baxter supplies its products in over 100 countries, and with Renal Care the group’s single biggest business segment totalling one-third of 2018 sales, it is likely to sell peritoneal liquids and devices in all of these.

All groups except Diaverum have large exposure to the US market.

Generally speaking, the dialysis service sector in developed markets covered in this report is dominated by 2-4 of the above groups. In peritoneal dialysis, the private sector is usually a two-horse race between Fresenius Medical Care and Baxter, although a large portion is also done in public hospitals. There is an argument that peritoneal dialysis is not really a service but rather a pharmaceutical sector. The liquid used is classed as a drug and many patients do it at home without assistance (the young and otherwise healthy). And generally, the private sector plays a smaller role in what service provision there is. As such we only really break it out from our figures if it is a substantial portion of the market. Typically, 90% or more of chronic dialysis patients are on in-centre haemodialysis.

EBITDA margins

Unconfirmed reports suggest that Diaverum, the largest services-only group in EMEA, had an EBITDA margin of 18.5% on its 2017 revenue of €727m. Davita, the largest services-only group in the world, which has a large US exposure, is around the same at 18.1% in Q1 2019. Fresenius Medical Care, 30% owned by German group Fresenius, has seen a gradually falling margin from 20.4% in 2012 to 17.9% in 2018.

An operator with deep experience of the EMEA dialysis sector says they expect margins for these groups will remain stable for the foreseeable future unless extraordinary cost pressures force down tariffs, as was seen for products post-2008.

Smaller operators, who will have lower margins because of their lack of scale, are likely to be more affected by mounting costs: staffing as the lack of specialised nurses really begins to bite; the investments needed in IT if providers hope to extend the patient pathway; and the technology to offer new treatment modalities as they grow.

Operators in Hungary, Russia, Turkey and Romania are likely to have seen falling or negative margins, mainly due to currency devaluation and macro-economic factors.

Threats to the sector

More peritoneal dialysis

Near-term, more peritoneal dialysis or home haemodialysis could mean less revenue for operators as it has a lower reimbursement per session. But attempts to increase the amount of these treatment modalities have not gone very far outside of small markets like Hong Kong, New Zealand, Finland and cities like Seattle, US. PD penetration generally is a maximum of 15-20% as older, frailer or higher acuity patients find it difficult to follow all the steps to perform PD, which is done several times a week for a shorter period of time. PD patients inevitably go onto HD if they don’t get a transplant as they get older, frailer and develop co-morbidities.

New, smaller sleeker devices like Singapore-based AWAK’s PD device hope to increase peritoneal penetration but operators are sceptical of how far you can go considering that mean age and co-morbidities of patients are both on the up. And in some emerging markets like India, PD is actually more expensive than HD because of the lower economies of scale accrued and the fluid needed is more expensive than for HD. Salaries, the single biggest cost portion of haemodialysis services, are also very low in India and many public patients are often prescribed fewer than three sessions per week.

eritoneal dialysis might not be appropriate for the obese, whose larger abdomen makes inserting the catheter more difficult, those with recent abdominal surgeries, or patients with co-morbidities for whom an infection in a non-medicalised setting might be disastrous.

The liquid for PD is classed as a pharmaceutical device making it harder to scale internationally than for equipment, without the right structures in place, as regulations on drugs are often more onerous than on the latter. Hence why the private supply of peritoneal dialysis supplies and service provision is often a two-horse race between Baxter and Fresenius Medical Care.

More kidney transplants

Long-term, an uptake in kidney transplants could reduce the demand for dialysis services, as a new kidney will last an average of 15-20 years. The introduction of opt-out organ donation – the state presuming that people are happy to donate their organs upon death unless they say otherwise – leads to a higher transplant rate and Spain famously has one of the highest rates of kidney transplants per ESRD sufferer in the world. Back of the envelope calculations suggest that if the UK achieved the same donation levels as Spain’s opt-out system, there would be a 3-4% drop in dialysis from current demand levels. But the drop would be much higher in countries such as Romania, which have really low donation rates from the deceased (the UK is in the top half of countries by this measure).

But kidney transplants are complex and suffer from many logistical barriers as well as immune systems not recognising the new organ. And availability is scarce. In most countries accident & emergency (A&E) departments have gotten much better at saving lives, and families are also usually reluctant, for emotional reasons, to allow doctors to harvest the organs of deceased relatives if they haven’t opted in.

Freak occurrences can cause a short-term spike in transplants. For example, the current opioid crisis in the US is increasing the supply of healthy kidneys as the would-be young and healthy die and pass on their organs. Financial incentives might increase organ donation rates but many say this will lead to perverse incentives (i.e. the poor selling their organs to the rich). Iran is one of the only countries to do this.

Stopper sees kidney transplants as one of the most imminent threats to the dialysis service sector. This is not because of more transplants – though this could happen with political action – but genetic sequencing, which has the potential to drastically increase the lifespan of transplants by tailoring immunotherapy medication to individuals’ genetic make-up. This has not yet been felt by the sector but he expects it to have an impact in the next few years – certainly sooner than the holy grail of renal failure cures which we go through next.

An artificial kidney/tech disruptors

The invention and widespread distribution of an artificial kidney would destroy the dialysis industry. But industry executives we speak to are confident that the technology is still a decade away, and the route to market will take another several years once it has been invented.

Stopper points out that the kidney is an incredibly complex and underrated organ making an artificial substitute a massive technical challenge. It not only filters waste products from the blood but also is a very important manufacturer of hormones that regulate blood pressure, electrolyte balance and red blood cell production. He reckons an artificial liver is much more feasible, and it is only seen as more important and therefore more complex than the kidney because its failure causes death much more quickly than kidney failure. Heart failure also kills quickly but an artificial replacement was invented decades ago.

But if this changes, we expect the groups to be first to pounce. A current executive at one of the big five says they closely monitor developments in tech that pertain to renal care and would “actively get involved if one came to market”. As they stand to be completely wiped out if something like an artificial kidney came up, expect them to move quickest in acquiring that capability although they are not active in funding internal R&D. “It would be great if our business was wiped out,” says one operator, deadly serious.

Ciampolini summarises his thoughts by calling dialysis a “graveyard of technologies.”

Exposure to public payor and currency risk

The heavy reliance on the public payor also means a certain degree of political risk. Some find it hard to stomach for-profits in charge of life-or-death healthcare and harsh decisions can be levied against companies as a result of political pressures. This can be large insourcing as in the Nordics or tariff cuts of 15-20% in Saudi Arabia and smaller ones in Portugal and Poland (some may argue the Saudi Ministry of Health was paying too much at first).

But compared to other healthcare services dialysis is straightforward and a process-driven kind of healthcare and as such, the private sector generally plays a much larger role in provision than in hospitals or other forms of acute care. It is also the healthcare service which is most vertically integrated, with Fresenius, B Braun and Baxter all providing both equipment and services.

A lot of these groups are in markets with a certain element of currency risk. Romanian dialysis providers get paid around 10% less than a decade ago because of the leu’s devaluation and far bigger trends are observable in Russia, Turkey and Argentina, which are large, fast-growing and have even been core markets for the some of the big five in the past but whose currencies have tanked in the past decade. But then again, being in many countries diversifies your exposure and fast-growing markets with stable currencies will make up for the problem ones.

Providers digging their own grave

Dialysis is a massive and highly competitive sector, especially in the USA. There have been allegations of questionable and even illegal practice levied at private sector operators. There have been allegations of bribes to public sector doctor to incentivise referrals in some countries while in the US, where private insurers pay ten times what the government pays for dialysis through Medicare, operators are accused of seizing on patients with poor English or little understanding of insurance and making them switch to their private insurer. Add to that the suggestion that dialysis operators aim to keep patients on dialysis rather than get them a new kidney and it’s not surprising that the sector has a less-than-stellar reputation.

Ratio Report: Dialysis

The following table has been compiled based on publicly available tariffs, EBITDA margins obtained from operators’ financial statements in each country, and past conversations with operators.

Dialysis: Albania

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 14.815.917.519.320.722.825.127.6
For-profit sector (€m) 11.114.415.817.318.520.422.424.7
For-profit growth % 10%30%10%10%10%10%10%10%
Public/non-profit sector (€m) 3.71.51.722.22.42.72.9
Albania: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Diaverum €7m €825m 37%
See all operators
€ million 
Albania's for-profit dialysis market is worth around €17m (2019), is growing 10% and is dominated by two operators.  

The number of chronic haemodialysis patients is growing at or just under 10% a year, reaching 1,300 in 2019, and services are covered in full by the compulsory health insurance fund (FSDKSH).

It jumped 30% in 2017 because of a large transfer of patients from public hospitals to for-profit clinics as part of a new contract. Over 2016 and 2017, the majority of haemodialysis services have been outsourced to two private operators, the American Hospital of Albania (Spitali Amerikan) and DiaVita, which was acquired by global player Diaverum in September 2019. American Hospital of Albania was a 15% shareholder in DiaVita prior to the transaction. 

In 2017, Diavita was treating 328 patients, American Hospital 600-650, and the small remainder by one other private hospital. but Diavita's contract entailed a rapid ramp-up and American Hospital of Albania's CEO told HBI in October 2019 that his company now had 40% of the market, indicating that DiaVita had become about as big. 

Diavita's 10-year concession, which has been shrouded in controversy, is worth 8.6bn LEK (€71m) over its lifetime or 860m annually, having won with its bid of 11,203 lek (€90) per session, according to local reports. If true, that amount would fund treatment for 492 patients annually on average over the concession's lifetime. We take its winning tariff per session as a rough guide to the total market. 

Going forward we estimate the private sector won't gain a market share higher than 90%, typically the case in developed markets which have near-fully outsourced, as the complex patients with co-morbidities will remain in the public sector hospitals. 

Dialysis: Bulgaria

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 3838.84040.842434445
For-profit sector (€m) 9.59.71010.210.510.71111.4
For-profit growth % 2-2.5%2-2.5%2-2.5%2-2.5%2-2.5%2-2.5%2-2.5%2-2.5%
Public/non-profit sector (€m) 28.529.13030.631.532.33333.6

Total dialysis patients are growing 2-2.5% a year, standing at 3,673 in 2017, according to an interview with the head of a dialysis clinic at a public hospital in Sofia. This roughly matches up with the total dialysis sessions carried out that year of 564,654 as per the country’s renal registry (the registry’s figure divided by the number of patients is 153, just under the 156 sessions a year a typical dialysis patient will receive).

The country has 80 dialysis centres of which 20 are private treating 968 patients, i.e. 25%. The bulk is haemodialysis for which the tariff is 144 Leva according to the nephrologist meaning a private sector of €10m out of the €36-40m total market (2017).  

The Bulgarian market seems off-limits to the big internationals, none of whom are in services, although the suppliers are probably active in distribution.

 

Dialysis: Croatia

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 4040404040404040
For-profit sector (€m) 88888888
For-profit growth % 0%0%0%0%0%0%0%0%
Public/non-profit sector (€m) 3232323232323232
Croatia: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €4.5m €2.7bn 56%
2 B. Braun Avitum €2m €1bn 25%
See all operators
€ million 
Fresenius Medical Care and B. Braun dominate the privately-provided segment which is around 20% of dialysis provision in Croatia. 

The 20% figure is one of the lowest private sector penetration figures of dialysis of any country covered in our dialysis report outside of the Nordics. The market has been tough with tariff cuts and quotas by successive governments hurting margins, meaning that in some cases, private operators have handed clinics back to the state, according to Ivan Svajger. He is the former head of Croatia for Euromedic and set up both its dialysis and imaging divisions in the country from 2006 to 2011 (Euromedic's imaging business was acquired and re-branded Affidea while its dialysis segment was acquired by Fresenius Medical Care). 

He adds that only the supplier-service providers can survive in the market thanks to their scale and the internal price of their disposables. The total market is around €40m (2,500 patients at last count, multiplied by rates just under €100 euros per session, as per Ivan) making the private sector c.€8m (20% of the total). 

Growth is largely stagnant as Croatia has a strong transplantation sector which was boosted by its accession to Eurotransplant in 2011, an international non-profit which coordinates transplants between European countries. This means kidney transplants largely cancel out new renal failure cases to leave a largely unchanging dialysis population.

Dialysis: Czech Republic

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 142151160170180191202215
For-profit sector (€m) 8894100106112119126134
For-profit growth % 5-7%5-7%5-7%5-7%5-7%5-7%5-7%5-7%
Public/non-profit sector (€m) 5457606468727681
Czech Republic: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €40.4m €2.7bn 36%
2 B. Braun Avitum €32.4m €1bn 28%
See all operators
€ million 

The Czech Society of Nephrology says that, as of 2018, there are 112 dialysis centres treating 6990 patients. Just 5.1% of these patients (359) are on peritoneal dialysis and the rest are on haemo.

The country’s largest health insurer, the VZP, cover 95% of these patients with the rest covered by other insurers. Its average cost per diaysis patient per year was 691,000 CZK (€22,800) in 2017 and with costs rising should reach around 615,000 in 2018, meaning a total market of €170m (using the stable CZK-EUR 0.039 exchange rate seen in the two years to May 2018). This probably includes drugs, but since the only international consolidators in Czechia are the supplier-service providers, the tariffs may be ‘global’ (service and supply) as standard.

The country has a low PD penetration, which is falling further. The number of peritoneal dialysis patients has been falling consistently at 8-10% since 2015 while haemodialysis is growing a 2-3%, as is the total dialysis population. But tariffs and overall costs are also growing, probably due to a regulatory framework and quality requirements catching up with Western Europe, at 3-4% a year according to the VZP’s own numbers, so the market by revenue is growing at more like 5-7%.  

The private sector has been gradually increasing its share of the market from 50% in 2010 to 62% in 2018 (69 out of the 112 clinics). The number of public sector clinics, 43, has not increased since 2014. Assuming clinics do not vary in size massively the private for-profit sector should be around €100m in 2018.

The two big players in the Czech market are B Braun, which has 19 dialysis clinics meaning around €28m of revenue (assuming clinics are similar sizes), and Fresenius Medical Care with 25, €37m revenue. This gives them two-thirds of the for-profit market. Note that they may both have additional sales in the country through supply to other private and public dialysis providers, including public hospitals doing acute dialysis. 

Dialysis: Denmark

Dialysis in Denmark is provided entirely in public centres. Denmark ended 2017 with around 2,600 dialysis patients, a number which has remained largely unchanged since 2010. Of these, 27% were at home: 6% home haemodialysis and 21% peritoneal dialysis with the rest in-centre haemodialysis. The only of these to have grown consistently in the last four years is home haemodialysis, from 150 in 2014 to 167 in 2017. The centre HD and PD figures are lower than 2014, but not by much.

Dialysis: Finland

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 98.5101.5105108.5112116120124
For-profit sector (€m) 88.28.58.89.19.49.710.1
For-profit growth % 3-3.5%3-3.5%3-3.5%3-3.5%3-3.5%3-3.5%3-3.5%3-3.5%
Public/non-profit sector (€m) 90.593.396.599.7102.9106.6110.3113.9
Finland: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €3m €2.7bn 32%
See all operators
€ million 

Finland is a world leader in moving to peritoneal and home hemodialysis. While the public sector has a monopoly on provision, Fresenius won a tender for dialysis services in 2018 from Helsinki University Hospital, a senior manager at the hospital tells HBI. It set up two clinics in the capital in 2019 which it called a "big step for our small Finnish branch," adding that private dialysis provision was rare in Finland. 

As of 2018, Finland has around 2000 patients on dialysis, a figure which is growing 3-4% annually net of mortality (100-150 a year) and transplants (around 250 a year). Peritoneal dialysis (PD) and home haemodialysis, currently one-third of all treatment modalities, are growing faster, at 5-8% while haemodialysis (HD) and haemodiafilitration are increasing at 2-3% a year. The PD and home HD penetration is one of the highest in the world.

With average treatment costs at €55,000 per year for haemodialysis and €45,000 for peritoneal and home haemodialysis, the total market in 2018 is around €105m (€82m for haemo and €23m for the other two combined). Combined overall growth is 3-3.5%. Of this, we estimate the private sector is around €8.5m in 2018, based on Fresenius' tender and other small cases of outsourcing. 

Dialysis: France

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 1,2001,2501,3001,3501,4001,4501,5001,550
For-profit sector (€m) 455480500523545570595620
For-profit growth % 4-5%4-5%4-5%4-5%4-5%4-5%4-5%4-5%
Public/non-profit sector (€m) 745770800827855880905930
France: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €92.7m €2.7bn 17%
2 Diaverum €70m €825m 12%
3 B. Braun Avitum €40.4m €1bn 7.4%
4 Elsan €11m €2.1bn 2%
See all operators
€ million 

Like all healthcare services in France, dialysis facilities are commissioned according to the assessed local need. Private dialysis units can be set up and serve the surrounding area or compete in the cities for patients. Some so-called “limited care units” that work with a specific hospital to take care of its dialysis services can also be found in Paris.

The private for-profit sector has a one-third share of France’s roughly 40,000 dialysis patients, but varies depending on the several different modalities by which modalities are classified. In 2012, it has 43% of standard haemodialysis centres, 26% of UDM centres (highly medicalised for more complex patients), 22.9% of ‘auto’ centres where patients are largely in control of the session, and much lower for home HD (3.9%) and peritoneal dialysis (7.6%). We dont' believe these figures will have changed significantly since then.

The average cost of a haemodialysis patient annually is €65,000 according to the SFNDT, the country’s renal registry association, but an operator says the effective rate for haemodialysis services is just over €200 per session, so just over €31,000 annually per patient based on the 156 sessions needed. The gulf between the two figures is because France has not moved as quickly as other countries in bringing down the cost of products (equipment and drugs) by using high-volume tenders to spark fiercely competitive bids by suppliers. Product tenders are still done by individual hospitals so these make up a disproportionate part of the cost base of haemodialysis compared to other countries. Some of the extra cost will also come from treatment for co-morbidities too which the private sector will do very little of but is generally included in the ‘cost’ of dialysis.

Using these figures, you get an overall renal care market (services, drugs and management of co-morbidities) of around €3bn in 2018, growing at 4-5% according to the public data, with the private dialysis - services only - sector at €500m based on the effective session rate from our source and its share of dialysis patients, growing in line with the wider market (13,000 x €31,000 is €413m but the private sector has a higher proportion of haemodialysis, the most lucrative of all modalities, so we are rounding up to €500m).

Public data shows that Diaverum has 18 clinics treating 1,900 patients (as of 2017), implying sales of at least €60m, Fresenius Medical Care has 41 clinics treating 2,700 (€85m), while B. Braun has 16 clinics treating around 1,000 (€35m). The latter two have overall sales of €116m and €350m in 2017 but this includes the supply of drugs and equipment.

The low level of consolidation in the French for-profit dialysis market compared to other countries in this report is because a lot of dialysis is still done in for-profit hospitals and not outsourced. 

Dialysis: Germany

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 1,9601,9802,0002,0202,0402,0602,0802,100
For-profit sector (€m) 1,3701,3851,4001,4151,4301,4451,4601,473
For-profit growth % 1%1%1%1%1%1%1%1%
Public/non-profit sector (€m) 590595600605610615620627
Germany: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €105m €2.7bn 7.3%
2 DaVita Inc. €99.5m €483m 7%
3 Diaverum €45m €825m 3.1%
4 B. Braun Avitum €44.7m €1bn 3.1%
5 Operasan €7.2m €7.2m 0.5%
See all operators
€ million 

The German dialysis market is ”large, fragmented and profitable” according to one operator. The €2bn spent on dialysis services (public data) is currently dominated by small, independent clinics who have a 60% share while just under 30% of the market is provided by large non-profits like KfH and PHV, and the remaining 11/12% of the market is held by the for-profit consolidators, all of whom are active in Germany: Fresenius, Davita, Diaverum and B Braun (estimates by the German Society of Nephrology, DGfN).

Over 90% of dialysis in Germany is in-centre haemodialysis and based on earlier figures the €2bn is likely to be services only and not medication or management of co-morbidities. Germany is another country where high-volume tenders for medication and equipment have brought down the cost drastically.

One of the reasons the private market is so fragmented is that tariffs for dialysis are structured in a way that favours smaller, independent, rural clinics. Having lots of small clinics, each with a nephrologist on-site, is the opposite of the larger corporates’ business model where larger sites and nurse-led facilities allow for economies of scale. But the portion of the market held by for-profits is expected to increase as owners of the smaller clinics approach retirement and struggle to find successors.

And quality could be improved, one executive saying “it is not as good as some of the physicians think it is and some emerging markets or East European countries have outcomes on par.”

The Supply Enhancement Act, passed in June 2015, allowed outpatient medical centres (MVZs) to operate in just one speciality area instead of two. This simplified the setting up of dialysis centres, as they no longer needed to offer another speciality service, and combined with the early 2019 TSVG law, which did not significantly affect the ability to consolidate the outpatient sector (with the exception of dentistry) as was initially feared, the sector should see more for-profit consolidation.  

So the private sector (consolidators and independents) is around €1.4bn while the consolidators’ market is around €230m. Growth figures of around 2% are cited by newspapers publicly, although Kuratorium fur Dialyse, the large non-profit, has growth below 1%, so we estimate growth is around 1%. The growth opportunities in Germany are therefore mainly inorganic (as with all outpatient sectors).

Dialysis: Greece

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 264271280288297306315324
For-profit sector (€m) 170175180185190196202208
For-profit growth % 3%3%3%3%3%3%3%3%
Public/non-profit sector (€m) 9496100103107110113116
Greece: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Evangelismos €4.6m €17m 2.4%
See all operators
€ million 

According to an article in Iatronet, Greece’s WebMD, the dialysis sector in 2018 comprises 11,220 haemodialysis patients, 65% of whom are treated by private clinics, and 713 peritoneal dialysis patients who are treated in public hospitals.

Average costs of €40-60k per dialysis patient per year are cited but it is likely that this includes drugs and management of co-morbidities. Typically, the service cost is half of that so taking €20-30k as the new range, the private sector will be €145-€215m in 2018. Even that is generous as the tariff has probably been severely cut in the years since the 2008 crisis.

Previous figures indicate the haemodialysis patient population is growing around 3%, which we apply to the private sector.

An operator tells us that Greece has a complex payment system with distributors handling the money for reimbursement, and because of this and other issues they steered clear. As far as we can see, none of the international groups have gone into the country’s dialysis service sector, unsurprisingly.

Dialysis: Hungary

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 64.264.264.270.670.670.670.670.6
For-profit sector (€m) 58.658.658.664.564.564.564.564.5
For-profit growth % 0%0%0%10%0%0%0%0%
Public/non-profit sector (€m) 5.65.65.66.16.16.16.16.1
Hungary: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €29.5m €2.7bn 45%
2 B. Braun Avitum €25.4m €1bn 39%
3 Diaverum €12m €825m 18%
See all operators
€ million 

Hungary’s 6,700 chronic dialysis patients (as of the beginning of 2019) are treated from 57 dialysis centres around the country, which is 88% consolidated by the international groups and nearly 100% by the non-government sector.

The budget for dialysis services remained unchanged for a decade at 23bn HUF (€64m) until November 2018, when it was increased by 10%. Since virtually the whole sector is privatised this is our market figure for 2016-2018 with the 10% growth applied for 2019 and unchanged in 2020.

Adam Aurel, president of the country’s renal registry association, tells us it is not yet clear if the budget will increase each year or whether this was a one-off. Over the time that the budget was unchanged, the tariff for a session has fallen to just €75-80 per session (excluding most medications). There are 30-80 new dialysis patients each year, 0.5-1% growth, with transplants cancelling out most of the growth net-of-mortality. The static budget was only possible because of this stagnant growth.

Fresenius, B Braun and Diaverum have cornered the sector. Of the 57 centres across the country, Fresenius Medical Care has 22, B Braun 18 and Diaverum 10, while the remaining seven are independent. In the capital Budapest, the three consolidators have eight out of 13 centres (two university hospitals, two non-profit hospitals and a military hospital run the remaining five). 

Note that Fresenius and B Braun are likely to have additional revenue from the sale of drugs and equipment, both to the public payor as part of a global fee for dialysis, as well as to other providers and the public hospitals.

Aurel tells us that despite the falling fee for dialysis services, quality has been maintained although providers have been making losses.

Dialysis: Italy

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 1,9601,9802,0002,0202,0402,0602,0802,100
For-profit sector (€m) 490495500505510515520525
For-profit growth % 1%1%1%1%1%1%1%1%
Public/non-profit sector (€m) 1,4701,4851,5001,5151,5301,5451,5601,575
Italy: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €60m €2.7bn 11%
2 Diaverum €38m €825m 7.5%
3 B. Braun Avitum €4.3m €1bn 0.84%
4 Italian Hospital Group €3m €37.1m 0.59%
5 Multimedica S.p.a. €500k €206m 0.1%
See all operators
€ million 

The Giornale Italiano di Nefrologia estimated in October 2018 that the total cost of dialysis in Italy is around €2bn (€1.94bn to be exact) that year based on an average cost-per-patient of €50,000 for haemodialysis, €35,000 for peritoneal dialysis, and the roughly 40,000 patients nationwide.

There are no large tenders in dialysis services and operators acquire patients by working with local hospitals or healthcare authorities to get referrals to their private clinic or to open or manage units within the hospital premises, meaning connections are key.

There are high-volume 5-7-year tenders for the supply of equipment and drugs that have even been done at the national level, bringing down costs as suppliers compete fiercely for these potentially lucrative deals, but services are local markets.

And as with everything in Italy regionality is also key, with tariffs and regulations varying wildly making it hard to scale. Dialysis is funded centrally by general taxation but regions decide payment mechanisms and prices.

An operator estimates that the private sector has a 25% share of dialysis patients but emphasises that there is no reliable data on this. The country’s nephrology society SIN has a dialysis centre map that roughly corroborates our source’s estimate (the private sector has 233 out of 670 clinics).

Based on the Giornale’s estimates, the private sector is around €500m in 2018 which will include some non-profits. The figure probably includes drugs but our source adds that Italy has managed to reduce costs for drugs and equipment more than most others because it has embarked on effectively national tenders for procurement of these, meaning drugs will be another 12-15% on top of the service, at most. So we keep the €500m figure. The country’s data sources are horribly insubstantial and out-of-date: an operator source estimates the dialysis patient population is growing at or just below 1%.

Dialysis in Italy is the opposite to most other healthcare sectors in that the private sector is strongest in the south of the country (most large private hospitals and nursing homes are in the wealthier north). This is because these regions have historically been poorer and therefore had to outsource to cut costs, in Lazio, Puglia and other states in the 1990s and early 2000s.

The two biggest private sector players are Fresenius Medical Care, with 51 centres and we estimate, €50-60m of sales, while Diaverum has 31 and around €40m in sales in 2017 according to Italian financial registry sites. B. Braun has one clinic in Rome but is mainly active through supply.

Dialysis: Macedonia, Tfyr

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
For-profit sector (€m) 1819202122232425
For-profit growth % 5%5%5%5%5%5%5%5%
Macedonia, Tfyr: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Diaverum €10m €825m 45%
2 Sistina Nefroplus €5.5m €5.5m 25%
3 Diamed - Special Hospital for Nephrology and Dialysis €4m €4m 17%
See all operators
€ million 
The dialysis market is split between global player Diaverum, which acquired the largest player PZU Diamed in 2019, and Sistina Nephroplus who have half and a third of the market respectively. Private hospital players won the remainder of nine-year public tenders put out in 2014. Nephroplus has common ownership with large hospital player Acibadem Sistina in Orca Holding, which owns minority stakes in both.

Dialysis: Netherlands

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c
Total market size (€m) 570570570570570570570
For-profit sector (€m) 20202020202020
For-profit growth % 0%0%0%0%0%0%0%
Public/non-profit sector (€m) 550550550550550550550
Netherlands: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €5.1m €2.7bn 25%
2 B. Braun Avitum €5m €1bn 25%
See all operators
€ million 

Dialysis is one of the sectors in the Netherlands where it is possible to turn a profit, but we are told that for-profit penetration is negligible. Fresenius Medical Care and B Braun run a few centres each. 

The total cost of dialysis in the Netherlands reached €570m in 2019, according to a study published in BMC Nephrology citing the Dutch National Institute for Public Health and the Environment. There are around 6,200 chronic dialysis patients, 85% of which are on haemodialysis so we estimate that accounts for around €500m.

The dialysis population is stagnant as transplants and deaths offset new patients. We estimate the for-profit sector is negligible at around €20m. 

 

Dialysis: Norway

The country’s renal registry shows that the haemodialysis patient population is growing 3-4% a year, reaching 1,261 in 2017, while peritoneal dialysis is ballooning 15% annually to reach 303 that year. Annual costs for haemodialysis cited in Norwegian press range from 430k NOK (€43,000) to 650k NOK (€66,000), which we would assume is the difference between service-only and service, drugs and vascular management. This means a €53m HD market in 2017, which with PD and home HD will come to around €60-70m. None of the international groups are present in services in Norway and we are not aware of the size of the private sector.

Dialysis: Poland

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 220225230235240245250255
For-profit sector (€m) 200204207210213216219222
For-profit growth % -1%1.5-2%1.5-2%1.5-2%1.5-2%1.5-2%1.5-2%1.5-2%
Public/non-profit sector (€m) 2021232527293133
Poland: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €101m €2.7bn 47%
2 DaVita Inc. €81.4m €483m 38%
3 Diaverum €36m €825m 16%
See all operators
€ million 

This is a roughly one billion zloty market (€230m) based on tariff rates and the country’s 19-20,000 mostly haemodialysis patients, growing 1.5-2% annually with a 90% share by the private sector according to Bjorn Englund, formerly president of Davita Europe.

Private sector dialysis clinics can provide services to the public patients by being on the NFZ provider list and getting reimbursed by the fund or contracting with public or private hospitals to provide outsourced dialysis services.  

Moves by the statist government have affected private sector dialysis operators but not as drastically as was initially feared. Tariffs were cut by a few percentage points in 2016 to 414 PLN (€96, one of the lowest rates in Europe) and some clinics have been taken off the NFZ’s list. This pales in comparison to other tariff cuts (50% in cardiology) and dramatic reductions in the number of NFZ-listed private hospitals.

Higher rates of 440 PLN are available to centres with a nephrology department but this is only likely to benefit large, mostly public, hospitals. This is aimed at helping those facilities as nephrology centres are usually loss-making in Poland.

The biggest and most well-known case of an NFZ de-listing in the private sector is Davita’s large Krakow clinic. The American group entered the country through large acquisitions in 2014 and 2017. Davita Poland has subsequently been in talks with a nearby university hospital to provide subcontracted dialysis services, showing one way to get around being de-listed by the NFZ.

Englund says that dialysis in Poland is a good market to work in for private operators partly because of the Polish national character forged through a turbulent history, having been fought over by Prussian, Russian, Austrian and German in the 150 years prior to post-WWII communism. “Nephrologists in Poland don’t complain.” In a service where up to a fifth of patients die each year while the rest wait for a transplant, the benefit of resilience cannot be understated.

Fresenius and Davita have around 70 clinics each (after Davita acquired B Braun's Polish clinics in early 2020) while Diaverum has around 20. 

Dialysis: Portugal

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 310307310319324329333339
For-profit sector (€m) 285280285290295299304308
For-profit growth % 1-2%-1.5%1-2%1-2%1-2%1-2%1-2%1-2%
Public/non-profit sector (€m) 2527252929302931
Portugal: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €109m €2.7bn 36%
2 Diaverum €81m €825m 27%
3 DaVita Inc. €22.9m €483m 7.7%
4 B. Braun Avitum €11.4m €1bn 3.9%
See all operators
€ million 

Portugal has a high private sector penetration of dialysis, with 94 out of the country’s 126 dialysis centres and 91% of patients. It is also unique in that providers are paid on a capitated basis, with the fee currently sitting at around €437 per patient per week with a limited element of health management. This is after a 3% cut to the tariff in 2017 (reflected in market numbers).

An operator tells us: “After the debt crisis (2011-) the government was not in a position to pay for the entire bill so it revisited reimbursement, came up with a comprehensive price including dialysis, drugs and some other ancillary services like vascular access management. Private providers now also take care of some early-stage diagnostics to predict complications further down the line.”

The private sector treats all patients except the most complex and those with co-morbidities who require treatment within a general hospital. As of 2018, there are around 13,000 patients on dialysis, a figure growing 1-2% each year; 94% of this is haemodialysis. The low growth figure is explained by the fact that the transplant rate in Portugal is also very high, like in Spain.

Based on the above figures, the total market in 2018 is €280m and growing 1-2% a year. Plus PD, the market should come to around €300m, with the private sector around €285m. The market fell 1-2% in 2017 when accounting for the tariff cut.

Fresenius Medical Care is the biggest group with 36 clinics (implying roughly €100m in sales), while Diaverum has 20 (roughly €60m) and Davita International has nine (€25m) with B Braun much smaller at three centres (€10m). Together, they hold 70% of the market by clinics but their actual patients or revenue could be higher as the first three have numerous centres in the touristic regions which would presumably garner a health stream of holiday dialysis patients who might pay cash for nice meals and other extras (on top of the dialysis session which would be paid for by their domestic public payor – although there might be some private pay here too).

Dialysis: Romania

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 220235250267283300318337
For-profit sector (€m) 190205220235250266283302
For-profit growth % 6-7%6-7%6-7%6-7%6-7%6-7%6-7%6-7%
Public/non-profit sector (€m) 3030303233343535
Romania: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €76.4m €2.7bn 30%
2 Diaverum €66m €825m 26%
3 B. Braun Avitum €25.4m €1bn 10%
See all operators
€ million 

Romania has proven an attractive market for the big international groups with Fresenius, B Braun and Diaverum all building a strong position through M&A entries. The market is growing fast, at 6-7% a year and as of the end of 2019 there were around 14,000 patients on dialysis (mostly haemodialysis).

But the sector has got more difficult as a public sector doctor wage hike in 2017 forced the private sector to follow, raising staffing costs. Private-pay operators like Regina Maria and Medlife have got around this by raising their prices to prevent loss of workforce, but dialysis operators can’t do this as the government who is the payor sets the price. Romania is an almost entirely outsourced tender market and private operators cover 90-95% of dialysis treatment according to an operator.

Tariffs for haemodialysis, the vast majority of the market, have been unchanged over the last few years at around 500 leu per session (€105) which is meant to cover all costs including drugs. In fact, this has fallen in the last decade as the leu has depreciated but tariffs remain unchanged. This is especially controversial because the public hospitals that provide dialysis services to the remaining 5% get paid more than double for a session. But this may partly reflect what are likely to be more complex cases with co-morbidities.

Based on that tariff, the private sector has 90% or €220m of a total dialysis market worth €250m in 2018. The major players are Fresenius (36 clinics), B Braun (11) and Diaverum (27) which has grown rapidly from 2015-2018 through acquisitions to reach €55m in sales or 25% of the outsourced market. Assuming the competitor’s clinics are similar sizes, Fresenius’ market share would be one third and B Braun’s 10% (€70m and €22m sales, respectively).

News outlet DC Medical says there are 130 dialysis centres in the country, of all types, meaning these three groups have 60% of them, which correlates well with our market share estimates. A 2017 list of clinics and patients from the Societatea Română de Nefrologie shows a similar split by the big three, and while it doesn't show how fast the number of dialysis patients is growing in Romania, an operator says it is “several percentage points higher than in Western Europe” which we would interpret as 6-7%.

One former executive says that Romania is no longer attractive because of the wage hike squeezing margins and the lack of available targets for M&A.

Dialysis: Russia

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
For-profit sector (€m) 270.5281.1292.9304.7316.5329.2342.4356
For-profit growth % 4%4%4%4%4%4%4%4%
Russia: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €91.6m €2.7bn 28%
2 B. Braun Avitum €75.4m €1bn 23%
3 Meditsinskii Tsentr Nefros €24.4m €24.4m 7.7%
4 Metaco €18.5m €20.5m 5.8%
5 KCMHD Dialysis Clinic LLC €17.2m €17.2m 5.4%
6 Nephroline €15.9m €15.9m 5%
7 Diaverum €10m €825m 3.2%
See all operators
€ million 

Russia is a highly federalised market and has historically proven attractive to operators with a low cost base and comparatively high reimbursement as well as high growth in dialysis patients of 10% annually. But now the situation is much tougher.

According to an interview with Valeriy Shilo, the founder of Russia’s Association of Medical Organizations of Nephrology and Dialysis (AMOND), there are around 40,000 dialysis patients in Russia in 2018, a figure growing 10% a year.

But the budget by the Federal Fund for Mandatory Medical Insurance, which pays for the treatment, grows by only 4% a year meaning costs are barely covered and operators have to subsidise loss-making clinics with ones in richer regions like Moscow and St Petersburg. This will partly be down to a worsening economy since sanctions by the US. It has led to tariff cuts in some regions, sometimes by just 1.5-2% while some regions have seen a halving over a few years.

To make things worse, the budget does not account for extra costs for operators which are mandated by the regional authorities who set the local regulations. Some of these are necessary, like transportation services to allow access for those in more remote corners of the country, while some arguably unnecessary rules on machinery and facilities create an onerous capex burden. Transport is such a problem that some regional governments have set up serviced dialysis apartments which patients live in Monday-Friday, getting their three sessions, and can only be at home on the weekend.  

Shilo adds that the average tariff for haemodialysis is just over 5,000 rubles (c.€60 at May’19 rates) meaning a market of 31 billion Rubles or €420m. Around 80% of dialysis provision is provided by the private sector, meaning it totals around €335m in 2018 and growing 4% with the budget.

Russia was a third of Euromedic’s dialysis profits when it was sold to Fresenius in 2011 and will have since gone down because of the above problems.

All of the big internationals are active in Russia except Davita. As of early 2019, Fresenius Medical Care treats 7-8,000 patients in Russia from 65 centres, giving it around 20% of the overall market and 25% of the private one, and looks to be opening 2-3 new clinics each year. B Braun is slightly smaller, with around 5-6,000 patients treated from its 60 clinics (15% of overall market and 19% of the private one) while Diaverum is much smaller, with 11 clinics treating around 1,300 patients.

There are also sizeable local operators too. Nephroline (Нефролайн, owned by the МедМа/MedMa conglomerate) has some 44 clinics throughout the country, while holding company Metako (Метако) operates 37 clinics through five subsidiaries, along with many other smaller local outfits.

Dialysis: Saudi Arabia

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 513.8685.1770.7770.7856.3886.3916.3948.8
For-profit sector (€m) 145.6368.2411398.2412.8428.2441.9457.3
For-profit growth % 5%150%11.5%-3%3.5%3.5%3.5%3.5%
Public/non-profit sector (€m) 368.2316.8359.7372.5443.6458.1474.4491.5
Saudi Arabia: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 DaVita Inc. €197m €483m 47%
2 Diaverum €168m €825m 40%
See all operators
€ million 

Market size

Updated August 2019 to reflect reports on the size of the tariff cuts which occurred in early 2019 

For our private for-profit market size figures we consider the big two outsourcing program plus “private & charitable hospitals” as per public data. Reports by the Saudi Centre for Organ Transplantation (SCOT) say that by the end of 2017, Davita and Diaverum together treated 6,000 chronic HD patients, implying a potential outsourced market of $330m ($350 x 156 x 6000). This was double the previous year (hence massive growth in the market from 2016-2017).

The real figure will be lower as the transfer of patients from MOH facilities to outsourced private ones was unlikely to be a smooth transition. So take this as a more of a theoretical market.

Add on to this the 3,074 patients treated in “private & charitable hospitals”, for whom we apply the lower tariff of $220, the total private market including non-profit is $435m in 2017.

The number of haemodialysis patients in Saudi is forecast to have grown 11% in 2018, Diaverum’s patient count seems to have grown close to that and Davita doesn't reveal its numbers. Assuming it and other private providers grew in line with growth in overall patients, the combined market will have reached $480m in 2018.  

SCOT forecasts growth in patients for 2019 and 2020 to be much lower, at 3.5% each year. Factoring in the reported tariff cut for the big two as part of the renegotiation for contract renewals, and growth in-line-with-population for the other private providers, the total private market will have fallen 3% in 2019 to $465 and then grown 3.5% to $482m in 2020 assuming no other tariff changes.

Background 

The Saudi Arabian dialysis market has been in the spotlight for the past few years for three main reasons. One, it is the country with the highest rate of diabetes outside of the small Polynesian islands. Two, dialysis was the first sector to be outsourced by a government which promises eventually to open up its entire healthcare system to the private sector. Massive five-year contracts were given to Diaverum and Davita in 2014. Three, it has become an all-important market for Diaverum which owner Bridgepoint tried but failed to sell/IPO in 2014 and then again in 2020.  


The number of dialysis patients in Saudi Arabia eclipsed 20,000 in 2018 and is forecast to grow to 21,845 in 2020. The public data on whether this is the number for haemodialysis or includes peritoneal is contradictory, saying either in different instances, so we assume haemo for simplicity.

The government hopes to outsource the bulk of haemodialysis provision to the private sector, with 35-50% to eventually be provided by international groups Diaverum and Davita, who had five-year contracts renewed at the beginning of 2019. As part of the renegotiations, Diaverum was allowed to open a few additional centres. As of January 2019 it had 35 covering 4,300 patients while Davita had fewer, around 20 clinics.

Other private sector operators, non-profit groups, quasi-governmental facilities and some public sector organisations will provide the remainder of services. We are told that the MOH wants to bring in further international private operators to provide an element of competition as they may end up outsourcing more than initially announced, or conversely Davita might not arrive at the numbers initially envisaged.

Initial contracts to the big two, from 2014 to 2018, paid $350 per session, all inclusive with about 80-85% of this covering the service, but this was almost certainly negotiated down for the renewals at the start of 2019. We hear tariffs for the service to other operators in the market are around $220, 73-78% of the one paid to the big two initially.  

Groups had issues in ramping up operations for several reasons. We are told that some MOH doctors were reluctant to let patients go to private clinics. Infrastructure issues may have caused delays as well for the more remote clinics, as the country lacks many basic elements of transport and telecommunications infrastructure despite its relative wealth.  

However, Diaverum and Davita have increased quality in a big way, halving the mortality rates that the MOH clinics were seeing and achieving KT/V (a measure of blood filtration) rates 50% higher according to a nurse who worked in both public and private clinics. An operator adds:

“Walking into (the dialysis unit of) a MOH hospital or private provider was like going back to the early 70’s in a less ‘emerged’ market.”

Based on various conversations we estimate the tariffs were negotiated down by 15-20% for 2019 onwards, which is reflected in the market size from forecast for 2019.

Dialysis: South Africa

South Africa: For-profit Dialysis: Biggest Operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
1 B. Braun Avitum €104m €1bn
2 Fresenius Medical Care €64.8m €2.7bn
See all operators
 

The country’s renal registers have not been published since 2015 but showed consistent trends in the 3-4 years prior, which we can extrapolate to arrive at figures for 2019.

Based on 9.4/9.5% growth in haemodialysis patients, in 2019 the number should reach around 10,800. Peritoneal demand should be around 1,650, growing slower at 3-4%.

Assuming the situation has not changed significantly, the private sector treats 80% of haemodialysis patients and one third of peritoneal ones. We will be obtaining market size figures and completing this entry in the coming weeks. 

Dialysis: Spain

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 585600615630645660675690
For-profit sector (€m) 323331340348356364372380
For-profit growth % 2-3%2-3%2-3%2-3%2-3%2-3%2-3%2-3%
Public/non-profit sector (€m) 262269275282289296303310
Spain: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €218m €2.7bn 61%
2 Diaverum €93m €825m 26%
3 B. Braun Avitum €69.3m €1bn 19%
4 Nefrosol €1.2m €1.2m 0.34%
See all operators
€ million 

Overview 

Spain is a world-leader in organ transplantation because, unlike most countries, it has an opt-out system and does not cap the age for donation. There are 46.9 donors per million people in 2017, more than double the EU average of 19.6. Some 3,260 kidneys were successfully transplanted that year.

The number of people living with kidney transplants surpasses those on regular dialysis, a feat matched by the UK, Austria, Switzerland and the Nordic countries but these all (except Austria) have a much lower prevalence of renal failure. So the Spanish statistic is more impressive.

The Spanish NHS fully covers dialysis for Spanish citizens. Additionally, there is a substantial holiday dialysis segment, where travellers from the rest of Europe can get dialysis services reimbursed by their national insurer/health system. The bulk of these come from the UK, Netherlands and Germany and have their treatment paid for by their own public payor.

Market size and largest operators 

The private outsourced market for haemodialysis should stand at around €340m in 2018, a figure which correlates two good sources.  

A competition inquiry into Fresenius Helios’ acquisition of Quironsalud in 2016 indicates the private haemodialysis service market in 2015 was worth around €315m, disclosing that Fresenius Medical Care had a 30-40% share, Diaverum 10-20%, with all other players (B. Braun etc) had less than 10% each. 

A report by IDIS, the country’s private dialysis sector representation association, shows the total amount outsourced to ‘external resources’ for haemodialysis treatment, from municipalities budgets (covering 75% of the Spanish population) reached €250m in 2018, having grown 2-3% in the last few years. Assuming the other 25% (which includes Valencia) is proportional, and working backwards to 2015, the figure almost perfectly matches up with the CMNC's: €250m / 1.025(3) = €232m or 73.6% of €315m. 

Note that there is a large non-profit, the Fundación Renal Íñigo Álvarez de Toledo (FRIAT), which treats around 1,600 patients or 5% of Spain’s 28,000 chronic dialysis patients. 

Although Fresenius was the largest operator at the time of Quironsalud inquiry, Diaverum has been expanding quickly to become, it claims, the largest provider by patients in early 2021 with 4,300 in its 20 clinics. 

Market dynamics 


An operator source says there are few standalone private dialysis clinics in Spain and most are on the site of or attached to a hospital, as the private sector was born out of hospital outsourcing. 

It is a highly federalised market with reimbursement rates and tender processes varying wildly from region to region, going as low as 100-140 euros per session for more efficient operators, excluding drugs. There have been some attempts to unify the geographic landscape but some regions like Catalonia want nothing to do with the rest of Spain, we are told, although service quality and provision in the independence-seeking state is strong and ahead of most other parts of the country.

We apply the 2-3% growth to the competition report figure giving a €615m market size figure for 2018. There is a small portion of dialysis in Spain which is peritoneal but we understand that the private sector plays a small role in the service delivery of this and so don’t count it in the market.

The real total cost of haemodialysis is much higher, around €55,000 per patient per year meaning a sector more than twice as large as the figure one we are using. But this includes all the drugs and management of co-morbidities, which are done by the referring public hospitals.

Our source does not expect the 50/50 ratio between transplanted and dialysed to increase in the coming years (we go through the limits to transplants in our overview).

Dialysis: Sweden

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 390395400405410415420425
For-profit sector (€m) 3939.54040.54141.54242.5
For-profit growth % 1-2%1-2%1-2%1-2%1-2%1-2%1-2%1-2%
Public/non-profit sector (€m) 351355.5360364.5369373.5378382.5
Sweden: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Diaverum €24m €825m 58%
2 Fresenius Medical Care €4.4m €2.7bn 10%
3 B. Braun Avitum €4.3m €1bn 10%
See all operators
€ million 

As of the end of 2018, there were 4,100 patients receiving dialysis treatment: 75% haemodialysis (growing 1.5-2.5% a year), 3% home haemodialysis and 22% peritoneal dialysis (both fairly stagnant), leaving overall growth at 1-2%.

Like other wealthy Northern European countries, Sweden outsources little of its dialysis to the private sector, just 8-12% according to an operator. Diaverum has just five centres while B Braun and Fresenius Medical Care have one each.

Our source adds that decisions against outsourcing are taken without justification in terms of price and quality. One example is the Skane region which insourced a contract with Diaverum in 2016. But the local county council argued that more patients got transplants once they insourced the service as the public healthcare providers had a motivation to get them off the treatment and save money for the region. This would not be the case with a private provider that does not bear the cost of managing patients' co-morbidities and complications associated with kidney failure and dialysis (respectively). 

Public data on dialysis expenditure is hard to come by. DRG menus published by some regions indicate tariffs of 4000-8000 SEK (€370-750) per haemodialysis treatment. This seems high and so will include medications, but is backed up by Diaverum’s 300m SEK (€30m sales) off just 202 patients treated in 2017. This indicates a €280-380m sector for haemodialysis. Add on PD and home-HD and we estimate a total market of €400m. Our source’s estimate gives a private sector of around €40m which is mostly Diaverum.

Dialysis: Switzerland

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 336.6345.8359.7372.6385.5399.3413.2427.9
For-profit sector (€m) 100.5104.2107.9111.6115.3119125.4130
For-profit growth % 3-4%3-4%3-4%3-4%3-4%3-4%3-4%3-4%
Public/non-profit sector (€m) 236.1241.6251.8261270.2280.4287.7297.9
Switzerland: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €16.4m €2.7bn 14%
2 B. Braun Avitum €13.1m €1bn 11%
See all operators
€ million 

Like in other healthcare sectors, there is a strong emphasis on freedom of choice for Switzerland’s 5,000 dialysis patients (95/5% haemo/peritoneal, 2018), a figure growing at 3-4% a year according to an article in Le Temps.

The cost of a single haemodialysis session is one of the highest in the world at 500 Swiss Francs (€450) excluding drugs, but this is the result of a very strong currency and high cost base. Nurses are paid twice what their German counterparts earn.

The service price is set nationally while drug fees are negotiated between providers, insurers and suppliers, and will be in line with the European average of 13-20% on top of the service cost.

An operator estimates that the private sector has a 30% share of dialysis patients. The country’s nephrology association website shows that 29 out of the country’s 94 dialysis centres are private, but that the vast majority of the larger ones (it classes clinics as whether they do more or less than 4000 HD sessions a year) are public, corroborating his estimate.

Less than half of these are in the hands of the consolidators or corporate hospital groups: Fresenius has four, B. Braun has three, Mediclinic-owned Hirslanden has five hospitals that provide dialysis services while the Lindenhof Gruppe has one. Another one in Thun, western Switzerland, is owned by the German non-profit PHV. The remaining 15 are independent, nephrologist-owned: the largest of these are the Nieren- Und Dialyse Zentrum and Praxis und Dialysezentrum, both close to Zurich.

Outpatient healthcare is lucrative business in Switzerland, and we see a specialist-owned, fragmented market in other sectors like imaging, ophthalmology and dentistry. But the market should consolidate as nephrologist-owners struggle to find successors. Future tariff pressure, as has been seen in inpatient hospital care, ophthalmology and imaging, will speed up the process as independents struggle to stay afloat.

Based on the above figures we estimate a €105m/117m SF private market (out of a €350m total sector) growing 3-4% in line with patients.

Dialysis: Turkey

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 191.8197.6203.4209.2216222.7229.5236.3
For-profit sector (€m) 9193.996.899.8102.7105.8108.9112.3
For-profit growth % 3%3%3%3%3%3%3%3%
Public/non-profit sector (€m) 100.7103.6106.5109.4113.3117120.7124
Turkey: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €20.3m €2.7bn 19%
2 B. Braun Avitum €4.3m €1bn 4.2%
See all operators
€ million 

Turkey is a large but difficult market. Bjorn Englund, former president of Davita Europe, says you have to be really smart to run profitable centres as there is a huge competition in the major cities from the country’s largest hospital operators (MLP Care, Acibadem, Memorial etc). He adds it is expensive to set up clinics in these locations.

Not even considering the political and currency risk, the state can prove a headache at the best of times. He recalls episodes where the ministry of health decided it needed more nurses and subsequently took a boatload back from private dialysis clinics, forcing immediate mass recruitment by dialysis operators.

The country also suffers from a huge lack of nephrologists. There was a point a few years ago where there were only 100-200 for a dialysis population of around 60,000. Dialysis is nurse-led and some operators reckon that governments demand more nephrologist participation than is needed, but these numbers are just 12-25% of the ratio recommended by the UK’s National Renal Workforce Planning Group in 2001.

There are around 70,000 dialysis patients in Turkey, which implies around 3% CAGR since 2010 when the number was 55,000. PD penetration is roughly 10%.  

With average reimbursement at 190 lira, this means a 2.1 billion lira market in 2018 (€311m at May 2019 rates). Most providers will now be in the red though, with costs doubling because of the depreciating lira. Diaverum pulled out in 2016.

A list of dialysis clinics throughout Turkey found on diyaliz merkezleri indicates that the private sector has roughly 40% of the country’s 350-400 dialysis clinics, indicating the private sector is about 1 billion Lira (€150m) in 2018, growing 3% annually.

Of the international groups, Fresenius has 44 clinics, while D.Med, a German group, bought Diaverum’s Turkish operations in 2016 which totalled 19 clinics. B Braun lists just one clinic, in Ankara.

Dialysis: United Arab Emirates

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 46.753.961.771.181.494.2107.9124.2
For-profit sector (€m) 66.97.78.69.811.31315
For-profit growth % 15%15%15%15%15%15%15%15%
Public/non-profit sector (€m) 40.747.153.962.571.582.994.9109.2
There are around 2,000 patients on dialysis in the UAE in 2018, a figure growing 15% each year. Dialysis costs 650-1000 Dirham ($180-270) per session indicating a total sector of $55-85m. The most recent reports by the Abu Dhabi Health Authority (2016) and the Dubai Health Authority (2017) showed private sector shares of 0% and 25%, respectively, so we estimate it is in the middle of the two and growing in line with patients.

Dialysis: United Kingdom

(Pre-COVID estimates in brackets) 2016 2017 2018 2019 2020 f/c2021 f/c2022 f/c2023 f/c
Total market size (€m) 715.3750.4785.6820.8856893.5933.4975.6
For-profit sector (€m) 279.1290.8304.9322.5340358.8378.7398.7
For-profit growth % 4-5%4-5%4-5%5-6%5-6%5-6%5-6%5-6%
Public/non-profit sector (€m) 436.2459.6480.7498.3515.9534.7554.6576.9
United Kingdom: For-profit Dialysis market share of biggest operators
Rank Company 2020
Revenue in this sub-sector
2020
Total revenue
market share %
1 Fresenius Medical Care €93.8m €2.7bn 27%
2 Diaverum €37m €825m 10%
3 B. Braun Avitum €36m €1bn 10%
4 Renal Services UK €9.9m €9.9m 2.9%
See all operators
€ million 

Private operators in the UK’s £250-260m (2019) for-profit dialysis market have been “reduced to bloodwashers” according to Stefano Ciampolini, who founded and managed the fourth-largest operator Renal Services for 15 years before selling to Davita in January 2021.

NHS hospitals prescribe treatment and keep control of all aspects of clinical oversight, prescription and vascular access management while outsourcing the dialysis service process to private providers. Outsourcing tenders are done via NHS procurement and are generally 10 years.

Nephrologists stay within the NHS hospitals treating higher acuity renal failure patients as dialysis is a nurse-led process. Operators own or lease the real estate and assets and employ the nurses. A minority of units are on the NHS hospital trust site while others are standalone units, usually when the operator has decided it needs to set up a new facility entirely to deliver the service properly.

As with other developed markets a major trend is an ageing and therefore higher-acuity dialysis population. This means operators are dealing with more co-morbidities meaning stronger links are needed with the hospitals and other healthcare providers. Units increasingly require beds instead of seats meaning a high capex burden.    

Market size

The budget in 2018 for haemodialysis services was around £670m and the private sector manages around one third of the roughly 300 haemodialysis clinics throughout the country, Ciampolini says. 

This makes a £220m private sector in haemodialysis but the real number is lower as the tariff for one session, £149, is paid to the NHS hospital outsourcing the service, who will usually pay a lower figure to the private provider, typically £120-149. The headline tariff is rising with inflation, we are told, and has come down from before 2013 when there was no standard: some trusts paid £3-400 per session while others only £100.

So we provisionally estimate the sector is around £200m for haemodialysis in 2018.

The peritoneal dialysis market is £50-60m annually on top of this and all done by two private providers: tariffs are lower per session but there are more sessions per week. This is procured separately to haemodialysis.

Growth in dialysis net-of-mortality is 4-5%. An ageing population and high blood pressure and diabetes are driving the growth. There are around 30,000 patients in 2018.

Ciampolini expects the private sector will eventually garner a 50% share of the market but no higher than that, while another expected some new high-volume tenders to come up in the next few years. So we are applying a growth rate for the private sector a notch above growth in patients.

About 1,800 kidney transplants take place every year in the UK, about 5% of the total dialysis population.

Major operators

There are four major operators in the private haemodialysis market and two in the peritoneal market. Diaverum and Renal Services UK (now part of Davita) have around 23 HD clinics each, Fresenius 45 and B. Braun has eight. The peritoneal market is divided roughly equally between Fresenius and Baxter International.  


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