Our Strategy

Strategy overview

In 2018 our main goal is to continue the successful roll-out of newly launched hospitals and services. At the same time, we will focus on improving cash flow generation and return on invested capital through efficiency measures and driving more synergies across the Group.

GHG has a full presence in the Georgian healthcare ecosystem and our long-term growth strategy is focused on gaining a one third market share both by number of beds and revenue in hospital business. We target to achieve c.15% market share in the polyclinic business and retain one-third market share in our medical insurance and pharma businesses, while increasing profitability.

We believe that the implementation of the UHC in Georgia (providing basic healthcare coverage to the entire population), the highly fragmented nature of the healthcare services market (where the top six providers control only approximately 40% of the market by number of beds as of 31 December 2017) and existing service gaps in both hospital and outpatient segments have created a significant opportunity for expansion and market share gains for our healthcare service business through organic growth and acquisitions.

Entering into the pharma market and becoming the largest player in this segment additionally created a significant platform with a cost and revenue synergy potential Group-wide. As the largest purchaser of pharmaceuticals in the country, we stay focused on gaining additional discounts from manufacturers and decreasing GHG’s existing cost of pharmaceuticals, medical disposables and devices by redirecting more of its purchases to the combined pharma business (eliminating the distributor margin). In the pharma business, our strategy remains to expand our footprint and present more private label products that allow us a significant margin enhancement.

The medical insurance business remains a feeder for our pharma and healthcare services businesses, thus we continue to concentrate on retaining a greater number of claims within the Group.

GHG’s strategy for the medium to long term is to gradually increase the healthcare services business EBITDA margin to c.30%, maintain and further improve the pharma business EBITDA margin and achieve medical insurance profitability by driving the loss and combined ratio down, all the while retaining more claims within the Group.

Our IT team will help us to move to the next level of development by getting to a fully integrated health information system that will help us to manage more efficiently and deliver better care to our customers. We also stay focused on enhancing our digital strategy and digital channels.

Our strategy going forward