“Very profitable” Ober Scharrer heading for a sale?
Rumour has it that German ophthalmology chain Ober Scharrer will be sold in the winter. Of course, its CEO Sibylle Stauch-Eckmann couldn’t possibly comment. Nonetheless, she tells us the group now has 5% of the country’s rapidly consolidating eye-care market and a strong pipeline offering further growth.
Ober Scharrer, now the largest chain of ophthalmic clinics in Germany, has been running for thirty years, gradually buying up practices and expanding through Bavaria, Badem Wurttemburg and North Rhine-Westphalia.
Private equity firm Palamon Capital Partners took a stake in May 2011 when it employed 355 staff and performed 28,000 procedures annually. Now, it has 60 sites, of which 11 have inpatient beds, has 900 staff, performs 80,000 procedures a year and contracts with other hospitals where its doctors perform treatments.
The German ophthalmology market is going through a period of rapid change, claims Stauch-Eckmann, and turning into an increasingly attractive business opportunity.
“It’s an increasingly good space to consolidate,” she tells Healthcare Europa. “It’s very fragmented and chains can offer quality, a range of procedures, cheaper procurement and can share doctors across practices as well as investing in training. The market is also growing at a steady rate with stable prices that make it very transparent and predictable.”
Around 80% of procedures are now performed in an outpatient setting in Germany. She claims these are more cost-effective and efficient than hospitals and perform highly specialised procedures. That’s important because the number of age-related eye diseases is growing rapidly as Germany’s population ages and the rate of diabetes goes up.
The country’s 4,000 ophthalmology practices are performing around 8-900,000 cataract and IVOM procedures every year, for example, with around 3% growth per annum, slightly more in IVOM. Around 50% of revenue comes from cataracts and IVOM alone in Ober Scharrer, despite IVOM only being available for about five years.
“We were pioneers in outpatient optha and what still makes us standout is the fact we offer the whole range of treatments with a high level of quality. Our doctors are also experts in retinal surgery and that quality is standardized across the whole group. In cataracts surgery, for example, with the latest lenses, you don’t even have to wear glasses after the procedure.”
Stauch-Eckmann will not reveal financial details, though she claims that the group is “very profitable” and has a market share of around 5% across the €3bn inpatient and outpatient markets. It makes around 70-75% of its sales in surgical centres and the rest in what she calls conservative practices that mainly offer diagnosis. The split between outpatient and inpatient is around 90:10 and the split between social health insurance and private pay mirrors the country as a whole at around 85:15.
Ober Scharrer has grown fast by offering Germany’s ageing doctors a comfortable medium between full-blown private practice and retirement. It’s taken on another 30 MVZ licenses, which allow them to open further spoke centres, in the last four years giving it 100 in total.
The trick, says Stauch-Eckmann, is to have a good reputation with the doctors and to make their lives easier.
“We take care of the back office and tax issues for the doctors, for example, but there are many sorrows in their lives that we can help with. You have to target the individual doctors, however, and go through a process of optimization with each business. These are practices that doctors have spent their whole lives building so it’s understandable that they’re quite sensitive about them.”
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