The PAC segment is still under-developed in Brazil but showing a market potential of US$ 6 billion. There are currently around 700 PAC beds in Brazil vs 20,000 beds needed over the medium term (comparing to 1.7 million beds in the U.S. today).
The marked is composed typically of small to medium sized low CapEx facilities with an average of 40 beds per facility. Brazil’s largest city, São Paulo, counts today only 25 PAC clinics. If just 2.5% of hospital discharges moved to PAC clinics (vs 26% in the U.S.), Brazil would require 1,350 clinics (20,656 clinics in U.S. today).
Brazil is the world’s 2nd largest private insurance market by value and penetration (after the U.S.), with 50 million people privately insured in Brazil. International groups have been acquiring major local insurers (Amil, Intermédica, Sul América, etc), which is increasingly driving PAC usage.
Home care is widely used in Brazil, but it delays hospital discharges and has proved to be inefficient in severe cases, due to rising staff and logistic costs.
Brazil’s fast-growing private health insurance market (50 million policies vs 20 million in 2002), together with an ageing population (70% of people over 65 require post-acute care at some point), is driving up private hospital costs.
Rapidly rising medical loss ratios result in the need of post-acute care facilities by health insurers, due to a 70% per day cost reduction as patients are transferred to PAC.
U.S. model of fixed cost per condition being introduced by insurers is also incentivising hospitals to accelerate patient discharge instead of retaining them to maximise revenue.
Healthcare represents 10% of Brazil’s GDP and healthcare spending in the country is forecasted to rise 300% by 2030. There are 50,000 home care patients considered ‘severe’ in Sao Paulo today, enough to fill 750 PAC clinics, yet just 25 clinics exist in SP.
Prolifico partnered with best-in-class executives to develop an institutional quality post-acute care platform, aiming to develop over 500 beds within 3 to 5 years, across selected cities.
A group of prime assets has been acquired for development.