The European healthcare market from a textile service

The European healthcare market from a textile service industry perspective: Trends, risks and opportunities Eurotape Customer Event May 30 th and May 31 st Sherille Veira-Schnitzler, healiz, Essen

About healiz was founded in 2007 by Sherille Veira-Schnitzler. healiz supports medical device companies introducing innovative products on the German market with … … extensive healthcare and medical devices experience … international and practically relevant experience … a medical board consisting of well-known medical professionals … a network of high-qualified specialists Sherille Veira-Schnitzler Master of Health Sciences Owner 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 2 ©healiz, Essen

How do we support our customers? Market analyses: What are the opportunities and risks of the healthcare market for my medical devices? Reimbursement: Are there payments and codes available for my medical devices and procedures? Strategy development: Which strategy is promising for the market introduction of my medical devices? Communication and Sales: How can I convince my target groups? Reimbursement Market analysis Medical product strategies Strategy development Communication Sales 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 3 ©healiz, Essen

What is the goal of this presentation? Discuss the top-9 opportunities and risks in the healthcare market for the textile service industry. 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 4 ©healiz, Essen

Who supported this study? Seven European textile service associations facilitated this market research: § Federatie van de Belgische. Textielverzorging (FBT, Belgium) § Brancheforeningen for Vask og Tekstiludlejning (BVT, Denmark) § Industrieverband Textil Service e. V. (intex e. V. , Germany) § Associazione Sistema Industriale Integrato Servizi Tessili e Medici Affini (Assosistema, Italy) § Federatie Textielbeheer Nederland (FTN, Netherlands) § Verband Textilpflege Schweiz (VTS, Switzerland) § Die Verbände der Österreichischen Wäscher und textilen Dienstleister (Austria) 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 5 ©healiz, Essen

What were the project goals and approach? This market study had the following agenda: April 2010 1. Describe the major trends in the healthcare market from a textile service industry perspective 2. Benchmark the market trends and the current market strategies in the different participating countries May – September 2010 Kick-Off Meeting Desk Research Country Workshop July – September 2010 Telephone Interviews September 2010 Strategy Workshop October – December 2010 Reporting October – December 2010 3. Develop recommendations for the textile service industry to successfully position itself in the healthcare market June 2010 Presentations 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 6 ©healiz, Essen

Which opportunities and risks did we define? We defined nine major opportunities and risks in the healthcare market: 1. Increasing consolidation in the hospital market 2. Introduction of new payment systems in the hospital market 3. Demographic changes lead to an increasing number of institutes and admissions 4. Demographic changes lead to an increasing demand for products for the elderly 5. The development from textile service companies to logistic service partners 6. Increasing market growth of additional services 7. Increasing number of public tenders for textile services 8. Patient hotels as a promising market segment for the textile service industry 9. Out patient centers as a promising market segment for the textile service industry 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 7 ©healiz, Essen

1. Increasing consolidation in the hospital market § Different healthcare policies had the goal to streamline hospital capacities. § Almost 50% of the European member states reached a rate of acute care hospital reduction of -10 %. § The total number of hospital beds decreased on average by 7% § The number of hospital admissions although increased to 35 million hospitalizations in 2008 § Despite of a shorter length of stay, bed occupancy rate is stable and amounts 77% 78% Total number of beds in all hospitals and in all acute care hospitals (participating countries), 2008 Development hospital admissions (all hospitals and acute care hospitals, participating countries) 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 8 ©healiz, Essen

2. Introduction of new payment systems in the hospital market § Public healthcare expenditures for healthcare increased with 27% from € 259 billion in 2000 to € 354 billion in 2008. Hospital costs share range from 30% to 50% of total costs. § The actual total hospital expenditure amounts around € 78 billion in Germany, and less than € 15 billion in the Netherlands, Austria, Belgium and Denmark. § Governments tried to cope with increasing hospital costs by implementing case-based payment systems (DRG systems). Total and public expenditure on health, 2000 - 2008 participating countries in billion EUR Total and public expenditure on inpatient care, 2000 2008 (in billion EUR, participating countries) 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 9 ©healiz, Essen

3. Demographic changes lead to an increasing number of institutes and admissions § The old-age-depedency ratio increased from 23, 3 in 2000 to 25, 4 in 2008. This ratio is expected to increase to 53, 5 in 2060. § The expenditure for long-term care increased from € 43, 6 billion in 2004 to € 49, 5 billion in 2007. This represents an increase of 14%. § The ageing of the European population will lead to a growing demand for facilities for the elderly. § Old-age-dependency ratio in % in Europe, 2000 - 2060 Total expenditure for long-term care, 2004 – 2007 (in billion EUR, participating countries) It is furthermore expected that the number of hospitalizations will increase with 11% in the next 20 years. 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 10 ©healiz, Essen

4. Demographic changes lead to an increasing demand for products and services for the elderly Demographic changes bring multiple opportunities for the textile service industry: § Independent elderly persons could rely on multifunctional textiles that integrate monitoring functions. § The demand for improved incontinence products will increase as the group of users is growing. § Additional services are needed for residential homes and elderly living at home to handle residential textiles and clothing § Cooperations with home care organizations are needed to support the group of elderly people who decide to, or need to, stay at home. 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 11 ©healiz, Essen

5. From textile service companies to logistic service partners § Textile service companies learned that they could use their transports to distribute additional products, including disposables. § Advantages for the industry: § Reduction of empty spaces in trucks § Increasing revenue and margins § Preferred partner of healthcare institutes § Logistic services should contribute to the main goals of logistics management: cost reduction, process improvement and cost transparency. § 87% of the German hospitals believe that they could save costs by optimising logistic processes. 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 12 ©healiz, Essen

6. Increasing market growth of additional services Italy shows that additional services can be major growth markets: Healthcare textile market Italy (growth in %) § The total revenue in 2008 amounted about € 704 million. § Wash and rental contributed to 84% of total revenue in the healthcare market, followed by textile sterilisation (10%) and surgical instrument sterilisation (6%). § Surgical instrument sterilisation shows a strong growth: The volume increased with 14, 7% in 2008. § Also other segments are showing increasing demand: 7, 6% growth for the compiling of sterile kits and a 3, 8% growth for the traditional washing and rental of textiles. 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 13 ©healiz, Essen

7. Increasing number of tenders for textile services § The number of public tenders for textile services has increased over the years. § Public hospital tenders increased with 53%; from 51 tenders in 2005 to 78 tenders in 2009. § Number of public hospital textile service tenders, 2005 - 2009, participating countries 77% of the public hospital tenders were registered in Germany. § Public tenders for residential- and nursing homes almost doubled from 18 tenders to 37 tenders in 2009. § Number of public residential & nursing homes textile service tenders, 2005 - 2009, participating countries 41% of the public nursing homes tenders were published in Germany. 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 14 ©healiz, Essen

8. Patient hotels as a promising market segment for the textile service industry § The concept of patient hotels is well known in USA and Scandinavia. § Due to cost pressure in hospitals the number of patient hotels is expected to grow in other countries. § Patient hotels can lower the costs for standard hospitality services. § More than 50% of healthcare specialists see the highest potential of patient hotels in specialized clinics and university hospitals. § The main target groups could be stationary and ambulatory patients. Survey results: Hospitals with good opportunities for a patient hotel Survey results: Target groups for patient hotels Source: Deloitte. Krankenzimmer de Luxe. Patientenhotels in Deutschland. 2010 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 15 ©healiz, Essen

9. Out patient centers as a promising market segment for the textile service industry § Outpatient centers offering surgery should be in the focus of the textile service industry. § In countries like Germany, the Netherlands and Switzerland the number of outpatient centers is significantly increasing. § These centers will develop an increasing demand for work wear, surgical textiles, linen and scrubs. § Furthermore, services like logistics, financial services and order management & control will become increasingly relevant. Number of outpatient centers in Germany, 2006 - 2010 Source: Kassenärztliche Bundesvereiniigung (Germany). Entwicklung der Medizinischen Versorgungszentren. 2010 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 16 ©healiz, Essen

Which opportunities and risks did we define? We defined nine major opportunities and risks in the healthcare market: 1. Increasing consolidation in the hospital market 2. Introduction of new payment systems in the hospital market 3. Demographic changes lead to an increasing number of institutes and admissions 4. Demographic changes lead to an increasing demand for products for the elderly 5. The development from textile service companies to logistic service partners 6. Increasing market growth of additional services 7. Increasing number of public tenders for textile services 8. Patient hotels as a promising market segment for the textile service industry 9. Out patient centers as a promising market segment for the textile service industry 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 17 ©healiz, Essen

How could the textile service industry cope with these opportunities and risks? Gather national market data • Regular country-focused surveys • Textile service market development Gather national customer data • Regular country-focused surveys • Healthcare market structure & trends Active communication with policians, customers & society • Define key messages • Invest in communication activities Invest in the development of new products and services • Develop inter-dependent relationships • Become less price-dependent Invest in healthcare specific cost calculation models • Activity-based price setting • Link pricing to new payment systems 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 18 ©healiz, Essen

What could be your next step? Benefit from the opportunities of the healthcare market ! 1. Request the market report at your association 2. Request a presentation and strategy workshop in cooperation with your association 3. Request the “healthcare opportunity checklist” for your company at healiz 31 -05 -2011, Sherille Veira-Schnitzler: The European healthcare market from a textile service industry perspective 19 ©healiz, Essen

Thank you! Sherille Veira-Schnitzler s. veira-schnitzler@healiz. com +49 (0)201 486404 -10