“We do not compete for price – but for quality”
Martin Lindner | Sep 20, 2017
As a multi-specialty provider of diagnostic services, Grupo Fleury is a fast-growing enterprise in Brazil. CEO Carlos Marinelli talks about the company’s strategy in an emerging market environment – and gives an outlook on future medical diagnostics.
Photos: Olivier Hess
Mr. Marinelli, could you outline your principle business model?
Carlos Marinelli: We offer a wide range of lab and imaging services for privately insured patients in the South, Southeastern and Northeast regions of Brazil, where the country’s main economic centers are. The biggest share of our business comes from currently 145 ambulatory patient service centers. In Brazil, when a doctor prescribes a test, patients can choose the lab or imaging facility themselves. This means that reputation and patient satisfaction play a major role for our business. In addition, we do clinical lab operations for 22 hospitals in the country.
Which key trends do you observe in your market?
Marinelli: Brazil has a fast-aging population with an epidemiological transition towards chronic diseases. This trend may even be more marked than in some other emerging countries. At the same time, people are becoming more empowered; they want to be active in their own health. Currently, the Brazilian healthcare sector is undergoing reorganization and consolidation, with small firms being pushed out of the market. We are reacting to these shifts by trying to adopt a leading role as a well-known provider with a long brand history. Knowledge-based and innovation-driven healthcare is central to our strategy. We do not compete for price, but for quality. This could even be a model for other emerging markets.
Grupo Fleury has several brands. What are the main value propositions to patients?
Marinelli: We address varying demands with our brands. Brazil is a country of inequality, and there are differences in the type of healthcare coverage. For decades, ‘Fleury’ has been a trusted leader in the premium segment. ‘A+’, instead, was launched in 2011 as a national brand to capture the broad intermediate segment of the market. The technical standards and diagnostic accuracy are the same with all our brands. However, with premium services, we offer additional layers of value. Patients entitled to ‘Fleury’ services, for example, may choose more comfortable diagnostic facilities (easy parking, no wait-times, home diagnostic tests) and customized solutions for e.g. pregnant women, children, cardiac patients, or patients with thyroid nodules.
Consumerism has a strong place in Brazilian healthcare.
Marinelli: Yes, but this is not the main thing. In terms of diagnostic value, we prepare integrated reports for premium customers, which are conducive for their referring physicians. When a gynecologist orders an ultrasound of the thyroid gland and a blood test of thyroid hormones, for example, we deliver a structured interpretation of both exams, integrating selected images as well as possible former results for the same patient. Thus, we are trying to give the complete diagnostic picture, not the pieces of a puzzle.
Company Portrait: The Grupo Fleury
Grupo Fleury is a multi-specialty provider of private diagnostic services with a long brand history in Brazil. Founded in São Paulo in 1926 as a clinical laboratory, today, the company is offering medical diagnostics under several brand names for premium and upper-middle income healthcare plans. The organization is running 145 ambulatory patient service centers in the most important states of Brazil (São Paulo, Rio de Janeiro, Paraná, Rio Grande do Sul, Bahia, Pernambuco, and Brasília), ranging from plain lab facilities to advanced diagnostic centers with MRI imaging. Additionally, Fleury performs clinical lab operations for 22 hospitals, and is active, to a minor extent, as service provider for other laboratories, in health promotion for companies, and in dental diagnostic imaging. The complete portfolio encompasses over 3.5 thousand types of exams in 37 different areas. The group has 9 thousand employees, among them 1.8 thousand trained physicians. For several years, Grupo Fleury has achieved double-digit growth rates through strong organic growth and acquisitions, with company earnings (EBITDA) rising from 315 million Brazil real in 2012 to 467 million Brazil real (about US$150 million) in 2016. With plans to open 90 new patient service centers over the next 5 years, Fleury aims at capturing additional shares of the expanding healthcare market in Brazil.
In your view, what is key to success?
Marinelli: I think it is the link to the patients. In our call centers, we make a great effort to be empathetic, to find out what people need. After the examination, patients can access their results directly through a smartphone app and send them as pdf files to their doctors, for example. We are also planning to install online booking possibilities. That is, we want to be present with our services and assistance in people’s daily lives and adapt to their communication styles.
Do you see any threats to your business?
Marinelli: I would not speak of threats, but there are important issues to be dealt with in Brazilian healthcare reform. Compared to other emerging markets, where out-of-pocket spending is a major payment mechanism for diagnostic services, private health insurance is much more important in Brazil. However, there is also a lot of ongoing litigation due to the lack of clear regulation, which services different health plans actually have to cover. Thus, the whole system suffers unpredictability. If the government provides a better regulatory framework, we will have an even broader market in the future.
What is the next big step for Fleury?
Marinelli: Over the next 5 years, we want to open 90 new diagnostic service centers in Brazil – 1 facility every 20 days. On a conceptual level, precision medicine and genomics, automation of integrated reports as well as big data will certainly play a major role.
How will relationships with partners such as Siemens Healthineers evolve in this context?
Marinelli: Boundaries between providers and suppliers are becoming thinner and thinner. In many respects, there is a common agenda. For example, Fleury, as the first company in Latin America, is adopting the IBM Watson technology for genomics analysis. Siemens is using the technology for their purposes, too. Indeed, it could make a lot of sense to embark on a close cooperation on how to leverage machine intelligence for future medical diagnostics.
About the Author
Martin Lindner is an award-winning science writer based in Berlin, Germany. After his medical studies and a doctoral thesis in the history of medicine, he went into journalism. His articles have appeared in many major German and Swiss newspapers and magazines.
The statements by Siemens’ customers described herein are based on results that were achieved in the customer's unique setting. Since there is no "typical" hospital and many variables exist (e.g., hospital size, case mix, level of IT adoption) there can be no guarantee that other customers will achieve the same results.