Health Plan operators operate through more than one corporate typology of a legal entity, called "modalities" [2]: group medicine (40%), medical cooperatives (36%), health insurers (13%), self-management (9%) and philanthropy (2%). These organizations establish contracts for the provision of health services with their beneficiaries, protecting their users from the direct cost linked to the risk of falling ill and observing the principle of mutualism [20]. Figure 1 shows that little has changed in the quantitative percentage of the modalities in the last 10 years:
The operators relate to their beneficiaries through contracts, with the predominance of contracts linked to companies through the so-called "collective business" plans, a fact that is repeated in all regions of the country. Interestingly, this type of contract is related to the level of employability of the country; therefore, it suffers more severe oscillations in a volatile economic system such as the Brazilian system. Table 5 shows the quantitative distribution of each of the contract modalities and their geographical distribution in the country regions.
Table 5
Distribution Types of Plans by Regions in Brazil 2020 [30]
Type of hiring | North | Northeast | Southeast | South | Central West | Unidentified | Total |
Corporate collective | 1,128,874 | 4,001,832 | 20,128,894 | 4,604,834 | 2,314,606 | 28,261 | 32,207,301 |
Individual or family | 391,840 | 1,755,343 | 5,084,947 | 1,264,072 | 537,884 | 4,299 | 9,038,385 |
Collective by adhering | 235,715 | 820,018 | 3,767,746 | 1,021,740 | 464,381 | 4,701 | 6,314,301 |
Uninformed | 3,064 | 10,354 | 48,928 | 4,663 | 3,799 | 1 | 70,809 |
Unidentified collective | 0 | 77 | 338 | 13 | 0 | 0 | 428 |
Total | 1,759,493 | 6,587,624 | 29,030,853 | 6,895,322 | 3,320,670 | 37,262 | 47,631,224 |
Regarding the size of health plan operators, there was a significant reduction in their number, from 1,045 institutions in 2011 to 711 in 2020 [2]. This evidence is confirmed by analyzing the data in Table 6, which shows a growth of 29% in the number of beneficiaries linked to operators that have more than 500,000 beneficiaries, with a decrease in all other groups, whose intensity of decrease is in smaller operators, reaching 57% decrease in institutions with 2,001 to 5,000 beneficiaries.
Table 6
Grouping of beneficiaries and Horizontal Analysis (2011–2020) [2]
Grouping | 2011 | 2020 | HA |
Over 500,000 beneficiaries | 17,600,739 | 22,715,394 | 29% |
100,001 to 500,000 beneficiaries | 12,276,731 | 11,704,100 | -5% |
50,001 to 100,000 beneficiaries | 6,410,403 | 5,669,947 | -12% |
20,001 to 50,000 beneficiaries | 5,567,096 | 4,682,160 | -16% |
10,001 to 20,000 beneficiaries | 2,482,548 | 1,761,421 | -29% |
5,001 to 10,000 beneficiaries | 1,080,166 | 757,635 | -30% |
2,001 to 5,000 beneficiaries | 451,840 | 271,783 | -40% |
1,001 to 2,000 beneficiaries | 110,730 | 47,105 | -57% |
101 to 1,000 beneficiaries | 44,755 | 21,370 | -52% |
1 to 100 beneficiaries | 806 | 309 | -62% |
Table 7 shows an intense increase in the last 10 years in the general concentration of the supplementary health market, from an RC5 index of 0.22 in 2011 to 0.29 in 2020, reinforcing the hypothesis of an increase in market concentration, which is intense, following the trends of countries such as China [46] and the United States [48].
Table 7
Historical Series Beneficiaries and RC5 (2011–2020)
year | Total Benefit2 | RC5 |
2011 | 46,025,814 | 0.22 |
2012 | 47,846,092 | 0.23 |
2013 | 49,491,826 | 0.24 |
2014 | 50,531,748 | 0.27 |
2015 | 49,279,085 | 0.27 |
2016 | 47,648,903 | 0.27 |
2017 | 47,111,682 | 0.27 |
2018 | 47,121,811 | 0.28 |
2019 | 47,058,415 | 0.28 |
2020 | 47,631,224 | 0.29 |
By analyzing the RC5 index of the regions of Brazil, it is possible to understand that the continental dimensions of the country raise extremely different realities, although all demonstrate the increase in market concentration if we compare the years 2011 and 2020. The north and northeast regions of the country show an intense market concentration (0.58), with indicators that exceed the scale of 0.50, that is, more than half of the beneficiaries are concentrated in the largest five operators of these regions. The southern region has greater market dispersion, in addition to the lower variability in the period (2011–2020). Its RC5 index had a result of 0.26 in 2011 and 0.27 in 2020, as shown in Fig. 2:
Table 8
illustrates the 10 largest institutions operating in the Brazilian supplementary health system, as well as the resulting HHI in 2011 and 2020. The stability of the institution called Bradesco Saúde (0.07) is perceived in the leadership of the IHH, with intense growth in the period of analysis of the publicly-traded company called Notre Dame Intermédica Health (0.07). Two institutions deserve special attention when analyzing the indicator of horizontal analysis, Hapvida Medical Care (0.06) with growth of 140% and São Francisco Health Systems (0.02) with growth of 425% in the analysis period.
Region | Population Region [3] | Supplemental Health Users Quantity [2] | % Supplementary Health Coverage | RC5 (2011) | RC5 (2020) |
North | 18,672,591 | 1,759,493 | 9% | 0.52 | 0.58 |
Northeast | 57,374,243 | 6,587,624 | 11% | 0.36 | 0.58 |
Southeast | 89,012,240 | 29,030,853 | 33% | 0.27 | 0.36 |
South | 30,192,315 | 6,895,322 | 23% | 0.26 | 0.27 |
Central West | 16,504,303 | 3,320,670 | 20% | 0.36 | 0.39 |
Brazil | 211,755,692 | 47,593,962 | 22% | 0.22 | 0.29 |
Table 8
10 Largest Private Operators of Hospital Medical Plans by Beneficiaries (2011–2020)
Private Health Plan Operator | Beneficiaries Quantity 20112 | IHH 2011 | Beneficiaries Quantity 20202 | IHH 2020 | HA |
Bradesco Health S.A. | 2,988,834 | 0.07 | 3,277,018 | 0.07 | 10% |
Notre Dame Intermédica Health S.A. | 2,140,143 | 0.05 | 3,241,622 | 0.07 | 51% |
Amil International Medical | 2,624,621 | 0.06 | 2,893,453 | 0.06 | 10% |
Hapvida Medical Care | 1,134,584 | 0.03 | 2,721,072 | 0.06 | 140% |
South America Cia Health Insurance | 1,279,444 | 0.03 | 1,858,761 | 0.04 | 45% |
Unimed National Central | 1,168,769 | 0.03 | 1,808,907 | 0.04 | 55% |
Unimed - Belo Horizonte | 971,061 | 0.02 | 1,297,348 | 0.03 | 34% |
San Francisco Systems and Health | 146,728 | 0.00 | 770,029 | 0.02 | 425% |
Unimed-Rio Cooperativa Médica | 774,619 | 0.02 | 736,615 | 0.02 | -5% |
Caixa de Assist. dos Funcionários | 693,620 | 0.02 | 634,214 | 0.01 | -9% |
The increase in beneficiaries and market concentration can take two main forms: ordinary growth, or mergers and acquisitions. In the Brazilian supplementary health market, like the United States [51] and Costa Rica [50], mergers and acquisitions have increasingly presented itself as alternatives. In the healthcare market, health insurance operators have been especially active in buying and selling assets. Of the 196 transactions of mergers and acquisitions of the Brazilian health market carried out between 2018 and 2020, 91 health plan operators are buyers of assets (53) or sellers (38).
Table 9 identifies the predominance of acquisitions by health plan operators, focused on other health plan operators (27) or hospitals (18), thus promoting market concentration and service delivery through their hospitals.
Table 9
Assets acquired by Supplementary Health Operators (2018–2020)
Assets Acquired by Supplementary Health Operators | Number of Operations |
Health Plan Operators | 27 |
Hospitals | 18 |
Benefits Administrator | 3 |
Miscellaneous (Clinics, Brokers, Laboratories and Technology Companies) | 4 |
According to Table 10, health plan operators were predominantly sold to other health plan operators (27), with few events of selling operators to hospitals (6).
Table 10
Supplementary Health Operators sold (2018–2020)
Typology of Buyer Entities | Number of Operations |
Health Plan Operators | 27 |
Hospitals | 6 |
Diagnosis | 2 |
Miscellaneous (Clinics, Brokers, Laboratories and Technology Companies) | 3 |
According to Fig. 3, among the five main health entity asset buyers in the periods 2018 to 2020, two are health plan operators. Hapvida Health Care and Notre Dame Intermédica with 19 and 22 operations respectively, stand out as they both are publicly traded in the Brazilian market.
By observing the totality of mergers and acquisitions in the health sector in Brazil, from 2018 to 2020, as shown in Fig. 4, we can observe the relevant degree of centrality of operators that appear as buyers of assets in the market (black), which represent a relevant growth of their operations through mergers and acquisitions, a variable that helps in the analysis of the quantitative decrease of active operators in the market. However, the operators sold in the period present themselves in green, with a relational link with their buyer, represented by the black arrow.
As shown in Table 11, some operators are especially prominent in mergers and acquisitions in the period demonstrated. Among them, there is the institution Notredame Intermédica, being the third institution with the highest degree of total centrality in the private health market (22.0), followed by Hapvida in fourth place (19.0), and Qualicorp in seventh place (7.0), all publicly trading on the Brazilian stock exchange.
Table 11
Main buyer entities (2018–2020)
n. | Name of The Institution | Degree of Centrality | Operation Category |
1 | Rede D´Or | 30.0 | Hospital |
2 | Dasa | 23.0 | Diagnosis |
3 | Notredame Intermédica | 22.0 | Health Plan Operator |
4 | Hapvida | 19.0 | Health Plan Operator |
5 | Afya Educational | 9.0 | Medical Education |
6 | Fleury Group | 7.0 | Diagnosis |
7 | Qualicorp | 7.0 | Health Plan Operator |
8 | Athena/Homeland | 5.0 | Hospital |
9 | Hypera Pharma | 4.0 | Pharmaceutical |
10 | Sabin | 4.0 | Diagnosis |
Table 12 shows the main characteristics of the 10 main hospital medical supplementary health operators in Brazil, which together concentrate more than 19 million beneficiaries [2].
Table 12
General data of the 10 largest operators of hospital medical health plans in Brazil (2020)
Operator | Users | IHH | AH (2011–2020) | Mergers and Acquisitions (18–20) | Accident Rate | IDSS (2019) [32] |
Bradesco Health S.A. (1984) [33] | 3,277,018 | 0.07 | 10% | 1.0 | 76.45% | 0.70 |
Notre Dame Intermédica S.A. (1968) [34] | 3,241,622 | 0.07 | 51% | 22.0 | 71.40% | 0.94 |
Amil Assist. International Medical. (1978) [35] | 2,893,453 | 0.06 | 10% | 0 | 77.06% | 0.91 |
Hapvida Medical Care. (1991) [36] | 2,721,072 | 0.06 | 140% | 19.0 | 66.50% | 0.75 |
South America Health Insurance Company. (1895) [37] | 1,858,761 | 0.04 | 45% | 1.0 | 76.90% | 0.76 |
Unimed National Central. (1998) [38] | 1,808,907 | 0.04 | 55% | 1.0 | 82.80% | 0.93 |
Unimed - Belo Horizonte. (1971) [39] | 1,297,348 | 0.03 | 34% | 0 | 68.89% | 0.94 |
San Francisco Health Systems. (2019) [40] | 770,029 | 0.02 | 425% | 1.0 | - | 0.86 |
Unimed-Rio Medical Cooperative. (1972) [41] | 736,615 | 0.02 | -5% | 1.0 | 72.00% | - |
Caixa de Assist. dos Funcionários (1944) [42] | 634,214 | 0.01 | -9% | 0 | 77.50% | - |
The obvious concentration of the market in fewer operators and the absence of change in the overall number of beneficiaries creates "giants" in the market. Among them, the market leader in 2020, with an HHI of 0.07 and growth of 10% in the period 2011 to 2020 is Bradesco Health, whose growth strategy is strongly focused on common shares, making little use of growth via mergers and acquisitions in the years 2018 to 2020, with a centrality degree of only 1.0.
Although Bradesco Health leadership is solid throughout the period 2011–2020, the massive mergers and acquisitions operations of the operators Notre Dame Intermédica and Hapvida Health Care, both publicly trading on the Brazilian stock exchange, have been demonstrating relevant results and contributing intensely to the market concentration. Its HHI of 0.07 and 0.06 and centrality level of 22.0 and 19.0 respectively, demonstrate their appetites for growth support through mergers and acquisitions that focused on other health operators and hospitals.
By more careful analyses, some of the data from the 10 main supplementary health institutions in the country can be evidenced as different strategies of growth and market positioning in their corporate structures, volume of beneficiaries, average billing ticket, spending structure, value of their assets, HHI, degree of centrality, loss, and supplementary health performance index. Although the numbers are impressive, market interaction strategies are different, which will lead us to futile different performances in future individual analyses, with an apparent and inevitable growth of mergers and acquisitions operations.
Finally, it is worth highlighting the particularity within Brazilian supplementary health of the cooperative system called Unimeds, founded in 1975, as one of the largest health cooperatives in the world [52]. It has 270 supplementary health operators with a total of 17,707,733 beneficiaries. Together they have an HHI of 0.37, representing the highest concentration of the Brazilian market with a growth of only 3% of the number of beneficiaries in the period from 2011 to 2020.