Market Concentration of the Brazilian Hospital Medical Supplementary Health System.
Authors: Cruz June Alisson Westarb , Gomide Arivelton Loeschke , Tuon Felipe Francisco , Weymer Alex Sandro Quadros , Manuel Janice Alexandra Costa 
Published: October 2023

Abstract

Background
The Brazilian supplementary health market has undergone transformations in recent years due to constant mergers and acquisitions of by large corporations, contributing to the increase in market concentration, especially in the poorest and least developed regions of the country. This could affect conditions for access and the quality of services provided. Thus, given the care it provides and its economic relevance, understanding the fundamentals of these movements, the likely consequences and trends for the health market are relevant, important, and strategic.
Objective
to understand the general and specific context of Brazilian supplementary health, its scenarios, and trends, with emphasis on the analysis of market concentration and recent mergers and acquisitions.
Methodology:
The research is applied, descriptive and exploratory and uses secondary data from various sources, submitted to quantitative data analysis methods. The object of the research is the history of supplementary health in Brazil, its main players and the recent market movements promoted by mergers and acquisitions. The data are organized into three groups, each with its own collection and analysis approach. The first group, Historical and Regulatory Documents, allows the analysis of the relevance and history of the supplementary health sector in the Brazilian context. The second group, Industry Data, presents a descriptive statistical analysis and enables an understanding of the historical series of the evolution of the sector and the measurement of market concentration indices. The third group, Market, allows an analysis of relational networks using Ucinet software.
Results
The results show the growing concentration of the market promoted by large publicly traded corporations, the growing relevance of tech startups on the healthcare landscape, the predominant use of the relative valuation model, with implicit multiples for asset pricing, and the prevalence of corporate health plans in the Brazilian market.
Conclusion
The growing concentration of the Brazilian supplementary health system projects a market with fewer options and less competitiveness, since the growth of large operators is evident, in addition to the relevant increase in the number of complaints from users of the system, which signals the growing gap between the expectations of users and the levels of quality care offered. It also emphasizes the urgent need for attention and action from regulatory agencies to guarantee levels of competition, competitiveness and quality. The study also highlights the predominance of corporate health plans, revealing the direct relationship between access to supplementary health services and employability rates. The analysis of M&A operations, in addition to the increase in market concentration, reveals the prevalence of the use of the relative valuation model and implicit multiples for the pricing of traded assets. this denotes the future expectation of wealth generation, at least equivalent to the historical series of the sector, on the part of investors, whose frustration may signal the decreasing attractiveness of resources and M&A operations in the sector in the coming years.