HBI Deals+Insights / News

Operators enjoy good summer but second wave jitters obvious

Private healthcare operators across Europe and elsewhere are seeing better-than-usual summer months as they play catch-up on the second quarter. But none are confident this will continue into the autumn and winter months as Europe enters an early second wave of COVID-19.

A top five acute care operator in Hungary claims June’s revenue was 30% higher than the previous year while a Mexican operator says his speciality clinic is seeing a flood of patients reluctant to go into general public hospitals where COVID-19 is lurking and attributes a third of his forecasted 60% annual growth in 2020 to this effect. Similar stories have emerged in most of Europe’s major markets and the GCC, with the notable exception of the UK and Germany.

But this largely reflects that summer months are normally much quieter and fewer people are travelling abroad. Few operators are willing to provide full-year guidance even though we are two-thirds of the way through. Better to under- than over-promise at this stage and the possibility of April-type shutdowns is increasing.

Data from the European Centre for Disease Prevention and Control shows many countries already entering a second wave, some on a par with the first: Belgium, Cyprus, Croatia, Czech Republic, Denmark, France, Greece, Luxembourg, Poland, Serbia and Spain. And that is not even including countries where the second spike is so great that considerable under-testing early on is clearly the reason behind the numbers.

Yes, the second wave of COVID-19 is unlikely to force another complete shut down of all non-essential hospital activity. The first wave demonstrated that Europe’s health systems have the capacity needed, and lessons have been learned around treatment and PPE stocks replenished. But no one knows how the virus behaves in a northern hemisphere winter and a partial shutdown of activity is certainly possible.

And in any case, your day-to-day volumes don’t need to be affected for your full-year growth targets to vanish. International and M&A-focused operators are reliant on physical meetings and travelling, the lack of which we are told has delayed at least one large sales process until 2021.

We would welcome your thoughts on this story. Email your views to Cameron Murray or call 0207 183 3779.