The healthcare sector is one of the world’s largest industries and we are convinced that it shows excellent growth opportunities.
The main growth factors are:
- rising medical needs deriving from aging populations,
- the growing number of chronically ill and multimorbid patients,
- stronger demand for innovative products and therapies,
- advances in medical technology,
- the growing health consciousness, which increases the demand for healthcare services and facilities, and
- the increasing demand for digital health services for patients.
In the emerging countries, additional drivers are:
- expanding availability and correspondingly greater demand for basic healthcare, and
- increasing national incomes and hence higher spending on healthcare.
At the same time, the cost of healthcare is rising and claiming an ever-increasing share of national income. Healthcare spending averaged 9.7% of GDP in the OECD countries in 2020 (2019: 8.8%)1,2.
The United States had the highest per capita spending with an estimated US$12,3181 in 2021 (2020: US$11,859). Germany is expected to rank third among the OECD countries with an estimated US$7,3831 in 2021 (2020: US$6,939). In Germany, an estimated 86%1 of health spending was funded by public sources in 2021 (2020: 85%), above the average of 76%1,2 for the year 2020 in the OECD countries. Most of the OECD countries have enjoyed large gains in life expectancy over the past decades, thanks to improved living standards, public health interventions, and progress in medical care. In 2020, average life expectancy in the OECD countries was 81 years1,2 (2019: 81 years).
Healthcare structures are being reviewed and cost-cutting potential identified in order to contain the steadily rising healthcare expenditures. However, such measures cannot compensate for the cost pressure. Market-based elements are increasingly being introduced into the healthcare system to create incentives for cost- and quality-conscious behavior. Overall treatment costs will be reduced through improved quality standards.
In addition, ever-greater importance is being placed on disease prevention and innovative reimbursement models linked to treatment quality standards.
Furthermore, increasing digitalization in healthcare can contribute to improved patient care and greater cost efficiency.
1 OECD Health Data
2 The latest available data from OECD Health Data refers to 2020, as no more recent data has been published.
Our most important markets developed as follows:
Healthcare spending as % of GDPDownload(XLS, 35 KB)
|Source: The latest available data from OECD Health Data, as no more recent data has been published; database for Switzerland and Spain is 2020 and China 2018.|
The dialysisDialysisForm ​of ​renal ​replacement ​therapy ​where ​a ​semipermeable ​membrane ​– ​in ​peritoneal ​dialysis ​the ​peritoneum ​of ​the ​patient, ​in ​hemo ​dialysis ​the ​membrane ​of ​the ​dialyzer ​– ​is ​used ​to ​clean ​a ​patient’s ​blood. market
Market data on the dialysis market based on company's own surveys
According to our estimates, the volume of the global dialysis market will be around €82 billion in 2022 (2020: €81 billion). We assume that this market volume will be roughly made up as follows: dialysis products around €15 billion (2021: €15 billion) and dialysis care (including dialysis drugs) around €67 billion (2020: €66 billion).
According to our estimates, the number of dialysis patients worldwide reached around 3.9 million in 2022 (2021: 3.8 million) – a 3% growth rate. Fresenius Medical Care is the global leader in dialysis care, providing treatment to about 9% of all dialysis patients (2021: 9%). In the same period, 344,687 patients were treated in Fresenius Medical Care’s network of dialysis centers (2021: 345,425).
The overall market for dialysis care services in the United States is consolidated. Across all market segments, we treat around 38% of all dialysis patients here (2021: 37%). In the United States, home dialysis is becoming increasingly important. In 2022, about 15% (2021: 15%) of our U.S. dialysis treatments were performed at home. Outside the United States, the dialysis services business is much more fragmented. With over 1,450 dialysis centers (2021: 1,490) and approximately 139,000 patients (2021: 139,000) in around 50 countries (2021: 50), Fresenius Medical Care operates by far the largest network of clinics.
Fresenius Medical Care is also the global market leader for dialysis products. Products made by Fresenius Medical Care for use in our own dialysis centers or for sale to third-party customers accounted for a market share of 35% in 2022 (2021: 36%). In the case of hemodialysis products, we had a 41% share of the global market (2021: 42%), making us the world leader in this field as well.
Dialyzers for hemodialysis are the largest product group in the dialysis market, with a worldwide revenue volume of around 390 million units in 2022 (2021: 377 million). Approximately 161 million (around 41%) of these were made by Fresenius Medical Care (2021: 158 million or around 42%), giving us by far the biggest market share. Hemodialysis machines constitute another key component of our product business. Here, too, we are the market leader. Of the estimated 90,000 machines installed in 2022 (2021: 94,000), approximately 42,000, or around 47% (2021: 48,000 or around 52%), were produced by Fresenius Medical Care.
Furthermore, we hold a strong position in the market for peritoneal dialysis products: around 15% (2021: around 15%) of all peritoneal dialysis patients use products made by Fresenius Medical Care.
Renal care continuum
To meet the challenges of the future, we are leveraging our core strategic competencies: developing innovative products, operating outpatient facilities, standardizing medical procedures and coordinating patients effectively.
With the implementation of our corporate strategy, we intend to take a further step to bring us closer to our goal of providing healthcare for chronically and critically ill patients across the renal care continuum. We aim to use our innovative, high-quality products and services to offer sustainable solutions at a reliable cost.
The renal care continuum encompasses the following aspects:
New renal care models: we intend to use digital technologies such as artificial intelligence and big-data analytics to develop new care models for patients with kidney failure, such as personalized dialysis and holistic home treatment.
Value- and risk-based care models: these models allow us to offer care that is not only better, but also affordable in the long term. Our aim is to establish sustainable partnerships with payers around the world to drive forward the transition from fee-for-service payment to pay-for-performance models.
Chronic kidney disease and transplantation: we want to provide patients with holistic care along their entire treatment path. To this end, we have broadened our value- and risk-based care programs to include the treatment of chronic kidney disease with a view to slowing disease progression, enabling a smoother start to dialysis and preventing unnecessary hospital stays. We also intend to incorporate kidney transplants into value-based care models in the future.
Through Fresenius Medical Care Ventures we invest in start-ups and early-stage companies in the healthcare sector with the goal of gaining access to new and disruptive technologies and treatment concepts for our core business and complementary assets.
Critical care solutions
The number of patients requiring continuous renal replacement therapy to treat acute kidney failure is set to rise in the next decade to more than 1.5 million per year. In addition to acute dialysis, the Company is also active in other areas of extracorporeal critical care therapy, such as the treatment of acute heart, lung, and multi-organ failure.
We will supplement and strengthen our existing network where feasible through additional partnerships, investments, and acquisitions. This will help us to create medical added value while saving costs, enabling us to build an even more solid foundation for our future growth.
Market data on the dialysis market based on company's own surveys
The market for biopharmaceuticals, clinical nutrition, MedTech, generic IV drugs, and iV Fluids1
The market for biopharmaceuticals from the therapeutic areas of oncology and autoimmune diseases – consisting of originator products and biosimilarsBiosimilarsA ​biosimilar ​is ​a ​drug ​that ​is ​“similar” ​to ​another ​biologic ​drug ​already ​approved. – grew by approximately 20% to around €176 billion in 2022. The acquisition of a majority stake in mAbxience significantly strengthens Fresenius Kabi in this growth market, in which the company participates through biosimilars and contract development and manufacturing of biopharmaceuticals. The market for biopharmaceuticals is a fast-growing and innovative segment, which will gain even more relevance for the care of patients going forward.
In 2022, the global market for clinical nutrition was about €10 billion in size. In Europe, this market grew by about 4%. Growth rates in emerging market regions were higher. In Latin America, the market for clinical nutrition grew by around 10%. A similarly strong growth of around 7% was realized in southeast Asia. There is growth potential worldwide, because nutrition therapies are often not yet sufficiently used in patient care, although studies have proven their medical and economic benefits. In cases of health- or age-induced nutritional deficiencies, the administration of clinical nutrition can reduce hospital costs through shorter stays. Fresenius Kabi is one of the leading suppliers for enteral nutritionEnteral nutritionApplication ​of ​liquid ​nutrition ​as ​a ​tube ​or ​sip ​feed ​via ​the ​gastrointestinal ​tract. and market leader in parenteral nutritionParenteral nutritionApplication ​of ​nutrients ​directly ​into ​the ​bloodstream ​of ​the ​patient ​(intravenously). ​This ​is ​necessary ​if ​the ​condition ​of ​a ​patient ​does ​not ​allow ​them ​to ​absorb ​and ​metabolize ​essential ​nutrients ​orally ​or ​as ​sip ​and ​tube ​feed ​in ​a ​sufficient ​quantity.. The company will roll out its clinical nutrition offerings into countries where it does not offer a comprehensive range yet. With a further expanded product portfolio as well as the use of new distribution channels, Fresenius Kabi will develop its global footprint.
The MedTech Infusion and Nutrition Systems (INS) product portfolio of Fresenius Kabi is broad and composed of product groups such as infusion and nutrition pumps and their dedicated disposables, extended by IT-based solutions focusing on application safety, user workflows, increased therapy efficiency, and interoperability with hospital systems, non-dedicated disposables, anesthesia monitoring devices, and dedicated sensors. The market for devices and related dedicated disposables is estimated to be worth more than €4 billion. There is a significant further market for non-dedicated disposables. The MedTech INS product range will be developed regionally and thus be available in more countries, in particular in the United States with the acquisition of Ivenix. In the MedTech INS segment, Fresenius Kabi ranks among the leading suppliers worldwide.
The market for MedTech Transfusion Medicine and Cell Therapies (TCT) grew by around 4% to about €3.5 billion. Fresenius Kabi is the leading company in the market for blood collections, which has recovered slightly compared to the previous year. Increased demand for plasma-derived therapies and autotransfusion treatments has resulted in attractive market growth; Fresenius Kabi holds top three positions in both markets. Due to newly approved treatments, the segment of cell and gene therapies is the fastest-growing market within TCT. With the continued success of LOVOLOVOLOVO ​is ​a ​cell ​processing ​system ​to ​wash ​differentiated ​and ​undifferentiated ​white ​blood ​cells ​for ​laboratory ​and ​research ​use. ​It ​is ​designed ​to ​offer ​a ​simple, ​fast ​and ​automated ​method ​to ​remove ​supernatant, ​add ​and ​reduce ​volume ​in ​a ​fully ​closed ​system., now used in two of the four approved CAR-T cell therapy treatments in the United States, our cell therapies business grew compared to the previous year.
In 2022, the global market for generic IV drugs and IV fluids was around €50 billion2 in size. With significant regional differences, the market generated low-to-mid-single-digit growth. Fresenius Kabi was able to enter additional segments of the global addressable market due to the expansion of our product portfolio in the areas of complex formulations, differentiated generics, and prefilled syringes, among others.
1 Market data is based on company research and refers to the markets relevant for Fresenius Kabi. This is subject to annual volatility due to currency fluctuations and patent expiries of original drugs in the IV drug market, among other things.
2 As in the previous year, the market definition also includes revenue of off-patent products.
The hospital market1
The market volume for acute care hospitals in Germany in 2021 was around €123 billion2, as defined by total costs (gross). Personnel costs accounted for around 61% of this total and material costs for 37%, increasing by around 5% and 4%, respectively.
With a share of revenue of around 6%3, Helios Germany is the leading company in the German market for acute care hospitals. The company’s hospitals compete primarily with individual hospitals or local and regional hospital associations. The main private competitors are Asklepios Kliniken, Sana Kliniken, and Rhön-Klinikum.
1 In each case, the most recent market data available refers to the year 2021 as no more recent data has been published: German Federal Statistical Office, 2021 data; German Hospital Institute (DKI), Krankenhaus Barometer 2022
2 The market is defined by total costs of the German acute care hospitals (gross), less academic research and teaching.
3 Measured by 2022 revenues in relation to gross total costs of acute care hospitals minus scientific research and teaching in Germany (latest available data: Federal Statistical Office, 2021 data)
The COVID-19 pandemic had a significant impact on the number of inpatient treatment cases in German hospitals in 2021, with a total of 16.7 million cases, or about 14% fewer patients, treated than in the pre-pandemic year 2019.
The economic situation is viewed critically by German hospitals overall. Compared with the previous year, the economic situation has deteriorated significantly. 43% of German hospitals reported losses in 2021 (2020: 29%). The proportion of hospitals with an annual profit was 44% (2020: 60%). The main reason for the worsening economic situation are the COVID-19-related revenue losses.
In addition to the often difficult economic and financial situation, there is an enormous need for capital expenditure. This results from medical and technological progress, increased quality requirements, and necessary building renovations, as well as investments in digitalization.
Hospital beds by operator
In addition, the federal states have not been able to adequately meet their legal obligation to provide the necessary financial resources in recent years. The German Hospital Institute (DKI) estimates that the annual investment requirements of German hospitals amount to over €6.8 billion. Less than half of this investment comes from public funds.
Key Figures for Inpatient care in GermanyDownload(XLS, 35 KB)
|2021||2020||2019||2010||2000||Change 2021 / 2020|
|Length of stay (days)||7.2||7.2||7.2||7.9||9.7||0%|
|Number of admissions (millions)||16.74||16.80||19.41||18.03||17.26||0%|
|Average costs per admission in €1||7,582||7,239||5,926||4,432||3,216||5%|
|1 Total costs, gross|
|Source: German Federal Statistical Office, 2021 data|
In order to continue to assist hospitals with the revenue shortfalls resulting from COVID-19, full-year compensation (coronavirus compensation) remained in place in 2022. The reference benchmark was hospital-specific revenue from 2019 (excluding non-personnel costs). To determine the amount of reimbursement, 2019 revenue is compared to 2022 revenue (excluding non-personnel costs). In addition, revenue from compensation payments or from supply surcharges (for patients who test positive for COVID-19) for 2022 is taken into account. The resulting revenue shortfall in 2022 compared to the base year 2019 is offset by 85% to reimburse costs incurred.
To offset the additional costs of gas and energy, the German Bundestag resolved in December 2022 to introduce a gas and electricity price brake and thus also aid payments for hospitals. To support hospitals, compensation totaling €6.0 billion is to be provided under the newly introduced Section 26f of the Hospital Act (KHG) for increased costs for the purchase of natural gas, heat, and electricity and for other inflation-related additional costs via the liquidity reserve of the healthcare fund.
The increase in the remuneration of hospital services in the German DRG system is determined by what is referred to as the rate of change figure. The rate of change figure is determined annually. For 2022, it was 2.29% (2021: 2.53%).
Since 2020, nursing staff costs for patient-centered nursing care in hospitals have been separated from the DRG flat rates and fully reimbursed by the health insurance funds via separate nursing budgets based on the principle of self-cost recovery. For this purpose, hospital-specific care budgets to be negotiated with the health insurers are agreed. The narrower definition (interpretation) of nursing staff costs, which has been in force since 2021, remains unchanged for 2022.
According to the Hospital Barometer of the German Hospital Institute (DKI), the shortage of specialists and problems in filling nursing vacancies will continue to be a key challenge for inpatient hospital care in Germany in 2022. In spring 2022, 89% of hospitals had problems filling vacant nursing positions on general wards. Three out of four hospitals had difficulties filling vacant intensive care nursing positions. On average, vacant nursing positions in intensive care units are unfilled for almost half a year.
In 2022, nursing staff minimum levels for nursing-sensitive units were expanded to include orthopedics, gynecology, and obstetrics.
To finance care for children and adolescents, the legislature introduced financial aid of €390 million p.a. for the years 2023 and 2024.
In the interests of modern, needs-based hospital treatment, day treatments without overnight stays can be billed using flat rates per case from January 1, 2023. This is intended to reduce night services, particularly in nursing, in order to create additional capacity among nursing staff on the day shift.
The private hospital market in Spain had a volume of around €18 billion1 in 2021.
Helios Spain is the market leader with a market share of around 12% in the private hospital market in terms of revenue. Helios Spain competes with a large number of stand-alone private hospitals as well as with smaller hospital chains such as HM Hospitales, Hospiten, Vithas, Ribera Salud, Hospitales Sanitas, and HLA, among other chains.
1 Market data based on company research and refers to the addressable market of Quirónsalud. Market definition includes both inpatient and outpatient healthcare services. It includes neither public-private partnership (PPPPPP (public-private partnership model)Public-private ​partnership ​describes ​a ​government ​service ​or ​private ​business ​venture ​that ​is ​funded ​and ​operated ​through ​a ​partnership ​of ​government ​and ​one ​or ​more ​private-sector ​companies. ​In ​most ​cases, ​PPP ​accompanies ​a ​part-privatization ​of ​governmental ​services.) nor occupational risk prevention centers (ORP). The market definition may differ from the definition in other contexts (e.g., regulatory definitions).
By the beginning of 2022, the healthcare system in Spain had already returned to normality, as it was before the start of the COVID-19 pandemic. Due to the high vaccination rate of over 85%1, as well as a large proportion of recovered people in the population, hospitals recorded hardly any severe COVID-19 cases. Hospital operations returned to normal with some safety precautions. As a result, average facility occupancy rates returned to pre-COVID-19-pandemic levels.
1 COVID-19 statistics (www.corona-zahlen-heute.de)
In contrast, the price and cost increases of 2022 as a result of the high inflation rate in Spain posed a challenge for the entire industry. In particular, there were significant additional burdens in the area of energy costs, which could only be partially offset by efficiency and savings measures. A challenge in some regions of the country continued to be the shortage of skilled workers, particularly in the area of nursing, although the situation has improved significantly compared with the time of the first COVID-19 waves.
The use of telemedicine was further accelerated by the COVID-19 crisis and also led to an increase in video consultations in 2022. This trend will continue as, among other things, medical care can be improved and greater efficiencies in healthcare can be created.
The global market for fertility services was worth about €13 billion in 2021. Market growth is driven by demographic and health trends as well as changing lifestyles. Notable scientific advances in this field have led to higher success rates and less strain for patients. The global market for fertility services is highly fragmented, representing an attractive opportunity for consolidation.
The market for projects and services for hospitals and other healthcare facilities
After two years predominantly under the influence of the COVID-19 pandemic, a robust development of the global economy was anticipated. Hopes of a strong economic recovery were not fulfilled due to the war in Ukraine. The general conditions for hospital planning and construction projects were again challenging and characterized by supply bottlenecks, extraordinary cost increases, especially with regard to energy prices, and travel and quarantine restrictions.
Fresenius Vamed meets these challenges through long-standing project partnerships with a high level of competence and experience, as well as through the establishment of a global, decentralized hub structure. The service business also faces challenges with regard to energy costs, as well as the still-increased safety measures for employees and patients in the context of COVID-19 protection concepts. Capacity restrictions and lower demand for rehabilitation services due to postponed elective surgeries played a slightly smaller role in 2022 than last year. Demand for reliable management of medical technology and high-end healthcare services remains robust.
The market for projects and services for hospitals and other healthcare facilities is very fragmented. Therefore, an overall market size cannot be determined. The market is country-specific and depends, to a large extent, on factors such as public healthcare policies, government regulation, and levels of privatization, as well as demographics and economic and political conditions. In markets with established healthcare systems and mounting cost pressure, the challenge for healthcare facilities is to increase their efficiency. Here, demand is especially high for sustainable planning and energy-efficient construction, optimized hospital processes, and the outsourcing of medical-technical support services to external specialists. This enables hospitals to concentrate on their core competency − treating patients.
In addition to offering services for healthcare facilities worldwide, Fresenius Vamed itself is active as a leading post-acute care provider in Central Europe, especially in Germany, Austria, Switzerland, and the Czech Republic. In emerging markets, the focus is on building and developing healthcare infrastructure and improving the level of healthcare.
Fresenius Vamed is a global company with no direct competitors covering a comparably comprehensive portfolio of projects, services, and total operational management over the entire life cycle of healthcare facilities. As a result, Fresenius Vamed has a unique selling proposition of its own. Depending on the business segment, the company competes with international companies and consortia, as well as with local providers.