A fully integrated care pathway
Our well-established network of hospitals and clinics allows a seamless patient treatment pathway from local doctors to multi-profile hospitals and pharmacies, while the medical insurance business plays a feeder role in originating and directing patients.
We operate a highly-integrated business model, where clinics are often the first point of interaction for attracting patients. The patients who come to our clinics can be referred to our hospitals for treatment or to our pharmacies to fill their prescriptions.
In the healthcare services business, our clinics and hospitals are organised in specific geographical clusters to provide services to the broadest range of patients through:
The referral hierarchy within each geographical cluster provides patients with a complete and convenient treatment pathway, from local physicians in polyclinics and community clinics to referral hospitals. Our 44 specialist ambulances help achieve this by facilitating the movement of patients to and between our hospitals. While we provide basic (“primary”) medical and surgical procedures at all our facilities, the majority of more specialised or advanced (“secondary” and “tertiary”) interventional and surgical procedures are concentrated at our regional referral hospitals.
Our pharmacy and distribution business solidifies our strategic goal of having a strong presence across the healthcare ecosystem. Its strong customer loyalty programme helps us to grow our polyclinic business by driving additional referrals. In 2018, we also introduced ePrescriptions in our pharmacies and polyclinics, driving traffic from our polyclinics to GHG pharmacies, 21 of which are located within our healthcare facilities.
Our medical insurance business also plays a feeder role in originating and directing patient traffic to our healthcare facilities. The customers insured by us may also use the services of competitor healthcare facilities. However, we are pleased to see so many patients go for the high-quality services in our outpatient network polyclinics despite having a free choice of providers. The convenience of directly-settled claims and co-payment incentives is another reason why our insurance customers prefer to use GHG’s hospitals and polyclinics. Our clinics are directly paid by our medical insurance business while patients must pay for and seek reimbursement for most medical care provided by other healthcare providers.Our pharmacy and distribution and medical insurance businesses are becoming increasingly synergistic through cross-sales, consolidated discounts and an increasing claims retention ratio within the Group.
We have recently launched new laboratory (“Mega Lab”), which represents the largest diagnostics laboratory in Georgia and the entire Caucasus region. Mega Lab provides a full set of clinical and pathology tests, some of which are being introduced in the region for the first time. The project is supported by our colleagues from Jordan, “Biolab”, a subsidiary of IDH Group, who have many years of experience in this field. Biolab will support Mega Lab in obtaining the highest international healthcare accreditation over the next few years. Mega Lab plans to develop a retail network, with around 50 blood collection points across major regional cities in coming years, and to work on additional external contracts, contracting and serving healthcare facilities outside the Group, further diversifying the Group’s revenue streams.
We operate 16 referral hospitals with a total of 3,320 beds. These hospitals are located in Tbilisi and major regional cities and provide secondary or tertiary level outpatient and inpatient diagnostic, surgical and treatment services. Our referral hospitals, which serve as hubs for patients within a given region, had a 63.3% bed utilisation rate (excluding recently launched Tbilisi Referral Hospital and Regional Hospital) and generated 85% of our total healthcare services revenue in 2018.
We operate 21 community clinics with a total of 495 beds. Community clinics are located in regional towns and municipalities and provide outpatient and inpatient diagnostic, basic surgical and treatment services to the local population. For complicated cases their primary goal is to stabilise the patient and redirect to the nearest referral hospitals for secondary or tertiary treatment. Our community hospitals had a 26.5% bed utilisation rate, demonstrating their role as primary healthcare providers. Our community clinics and generated 8% of our total healthcare services revenue in 2018.
We operate 16 polyclinics. Polyclinics provide basic and full-scale outpatient diagnostic and treatment services. These clinics are located in Tbilisi and major regional cities and represents the first point of customer interaction, bringing additional referrals to our hospitals and pharmacies. Polyclinics generate the highest margin and the management currently believes that this segment of our business will become one of the largest sources of future growth. Polyclinics generated 7% of our total healthcare services revenue in 2018.
We operate two pharmacy brands, each with a distinct positioning: GPC for the high-end customer segment and Pharmadepot for the mass retail segment. The pharmacies are located in Tbilisi and other major regional cities.
The total number of bills issued at our pharmacies exceeded 27 million in 2018, making us the country’s largest retailer in terms of both the revenue and the number of bills issued. Our scale of operations gives us a bargaining power over suppliers to extract procurement synergies, reflected in strong margins. Consequently, it also helps us share the synergies with the local population by providing affordable pricing on key products, as well other small pharmacy chains through wholesale business. Furthermore, pharmacy and distribution business is a pure out-of-pocket business favourably diversifying the Group’s revenue stream.
We are the largest medical insurance provider in Georgia, with a wide distribution network. We offer a broad range of comprehensive private medical insurance policies that customers can opt for instead of relying on the coverage provided under the UHC and other state-funded healthcare programmes. Our products are mainly offered as corporate packages to large employers. The business plays an important feeder role for healthcare services and pharma businesses. We operate 12 branches and service centres of our medical insurance business in a number of cities and towns across Georgia. We have been adjusting the business model of our medical insurance business since 2013, when UHC was introduced and transformed the landscape. Last year we also started new initiatives to adapt to the changes in the UHC introduced in 2017 that had a favourable effect on the 2018 results, when the business started to stabilise its earnings and contribute to the Group’s overall performance.
By the end of 2018, the business won two large tenders, retaining the country’s largest insurance client – the Ministry of Internal Affairs (“MIA”) with c.75,000 insured, and acquiring a significant new corporate client – the Ministry of Defence (“MOD”) with c.60,000 insured. Adding new customer base supports our business expansion strategy. With the increased client base, GHG’s insurance business became the largest private payer in the healthcare sector with c.230,000 insured clients, securing further growth and significant synergies across the Group.
In December 2018, we completed construction and opened Mega Laboratory, the largest diagnostics laboratory in Georgia and the entire Caucasus region. Mega Lab is an important new business line for the Group.
The multi-disciplinary laboratory, equipped with latest infrastructure and state-of-the-art equipment, covers 7,500 square metres. High-capacity automated systems enable GHG to provide accurate, high-quality results to the entire population of the country. In addition to basic laboratory tests, the new laboratory allows us to offer complex tests for oncology and molecular lab, some of which have never been available in Georgia and for which blood samples used to be sent abroad. The launch is in line with our strategy to invest in and develop new medical services to keep filling existing service gaps in the country, supporting the market’s continuing development and our service export strategy.
Before opening Mega Lab, the most of the Group’s healthcare facilities had their own laboratory units. Currently, our high-tech laboratory collects samples from the Group’s hospitals and polyclinics throughout Georgia. The test results are distributed automatically to each hospital and polyclinic within the Group, through the internal Laboratory Information Management System (“LIMS”), enabling us to be far more efficient and provide a reliable service to our patients. As the Group’s internal demand covers only one-third of the laboratory’s capacity, Mega Lab plans to develop a retail network and to work on additional external contracts, contracting and serving healthcare facilities outside the Group.
The project is supported by our colleagues from Jordan, Biolab, a subsidiary of IDH Group, who have several years of experience in this field. Biolab is the only laboratory in the Kingdom of Jordan that has received JCI accreditation as an independent laboratory, and will support Mega Lab to get the same accreditation over the next few years. They have conducted training and knowledge sharing for our personnel and have created an initial technical base.