A predicament health care in Brazil is no longer new. In this scenario, the issue of access to health, which has always been a central problem, becomes even more acute. However, every crisis pushes for a path of change and innovation, so that the market tries to respond - even if partially - to this demand. One of those companies that decided to embrace the challenge of access to health is SimCo, an investment by Green Rock. Its founder and CEO, Denis Cruz, shared some of his perspectives on this situation in an exclusive interview.
Check out the main excerpts below.
What is the history of Clínica SIM and what market gap did you see?
Before the creation of the SIM Clinic, I worked for six years in a general hospital that provided health plans. When a patient receiving health insurance arrived, it was clear that that person had better financial conditions, they passed the insurance card and the hospital received something around R$ 100 for the consultation and R$ 50 for the X-ray. Meanwhile, when she was someone who had no plan, she generally came from a more humble background and paid R$ 400 for the same service. This is a reality around the world. I summarize this as if it were a “Robin Hood upside down”, because the model works that way. I started researching, but at the time this market for popular clinics didn't exist yet. It is known that, in Brazil, out of the total of 200 million people, only 25% have health insurance, but this is an average for the entire country. When we look to the Southeast, there is coverage closer to 35%. If we go to the Northeast of Brazil, the coverage is 15%, while in the North it is 10%. That is, there are very important regional discrepancies that are not always seen. Then I realized that there was an opportunity there for that audience. But creating this business was very complex because there was no comparison model out there. Everything happened on the basis of “hits and misses”.
Was the proposal to start with the North and Northeast due to the size of the population receiving health plans, or is there any other point?
Yes, but there was also the point that I lived there, which made everything more natural. So we started in Fortaleza and little by little we were able to understand the North and Northeast regions of the country well. When you look at the United States, there isn't one network that dominates the entire country. There is sometimes a network that is very strong on the west coast, another strong on the east coast, and so on. Health is a very large and complex business, so it's hard for us to see a company that dominates 80% of the market. We generally need important regional understanding to build trust with people and doctors.
What is the size of this population that is not a beneficiary but that has a permissive income for popular clinics?
I can say that at Clínica SIM our clients are B2, C1 and C2. In dental care, they tend to be more B2. Our clinics are in malls next to popular stores. We place ourselves within this position that in the United States is called “retail clinics”, with this idea of retail, to have more visibility and be more accessible. Historically, we were unable to find a model that could be consolidated for classes D and E. There was a fact that I looked at about 10 years ago that showed that around 2/3 of class C did not have health insurance. Many of these people are already paying for the provision of their own house, a car or college for their children, so their health ends up being accessed through the SUS, and when they need something they go to a trusted popular clinic.
Access is one of the greatest health challenges today. How do you assess that the public sector and the market are responding to this challenge today?
I am a big supporter of the SUS. We have to be proud of this system, it is a very big challenge and there are many things that the SUS does well. In my opinion, where the SUS does not serve so well is in secondary care. For example, if a person has a spot on their skin and goes to the health clinic, the doctor recommends a biopsy, but scheduling this sometimes takes a year. This is something you can't wait for if it's a skin cancer. There is also very broken communication. Sometimes doctors are absent due to the needs of life, such as a sick child, but the people who scheduled these visits do not know this. When the consultation is finally done, the person has a series of exams to take and sometimes each one must be done in one place. In short, navigating this secondary care is very complex. That's why at the SIM clinic we place great value on the speed between the need for a specialist and the delivery of the consultation. After the consultation, the person is often able to take the exams on the same day, in installments in five installments. In addition, the doctor is not paid for a prescribed exam, so he will only prescribe what the patient really needs and we deliver it very quickly. If the doctor is unable to come on the scheduled day, we always reschedule with speed. So, SUS is a really great system, but it doesn't communicate well with people on their care journey.
How is it possible to deliver a health journey at an affordable cost, as in popular clinics?
When the health plan contracts with a hospital or clinic, it brings volume to that service provider, so they want to pay for a discounted price. That's what I said at the beginning: a consultation for those who have a plan is a fraction of the particular price, plans have that bargaining power. What we do is charge the patient the amount that the insurance pays, so the doctor ends up receiving compensation that is very similar to what he receives while attending insurance. We understand that doctors are professionals who value having multiple sources of revenue, so they work on duty on Tuesdays and visits the hospital on Wednesday, while on Thursday they are registered with a city council and sometimes have their own office. So, in short, for doctors, we are another source of income for them to access an audience that they could not directly access in their office through the health plan. That's the logic.
Income is a major limiter, but there are others. Most of the population doesn't plan and doesn't have that head focused on prevention, it's a cultural issue. I wanted you to comment a bit about these limiters.
We talked about income as a limiting factor in care. In every marketplace, the focus is always on the offer first. In our case it's no different. So we need to build a worthwhile value proposition for the doctor. If we don't have a patient acquisition machine, I can't fill that doctor's schedule properly. A major limiter is supply. When we went with the popular clinics, for example, to cities farther away from the metropolitan area, we failed. This was because the medical professional does not live there, so they need to have an important trip. Still, he arrives there with the expectation of having a higher remuneration than he would have within the capital, and when you move farther away, the regions tend to be less favored. Then we found a market failure there, because supply wanted to receive much more and demand had less capacity to pay. So for me, the first point is this issue of complying with the offer in the right way. Second, there is the issue of population habits. We ourselves, who have had many privileges and opportunities, are often not exercising enough or have the best habits. So it's hard to have that culture of prevention. We have a long way to go. Our biggest competitor is not the SUS, our biggest competitor is “non-treatment”. The better the SUS is, the better for everyone, because we will have an earlier diagnosis and we will have more resources allocated to primary and secondary care to diagnose, treat, and prevent the catastrophic event in tertiary care. So I see the SUS as a great ally.
Is it common for patients who use a bit of SUS and a bit of popular clinics to compensate for what is sometimes poor in public service?
Yes, we have several types of patients. We see very faithful patients who are always with us. When a class B and C person comes to one of our clinics, that person is opening a space in the SUS for a less fortunate person, which makes us very happy. We also see a lot of the patient who navigates between us and the SUS. And there are also the patients who are the beneficiaries of more massive health plans. Sometimes that person went to an appointment and wants a second opinion, which may take a long time to get, so they make an appointment at the SIM Clinic and get it quickly.
What is your perspective for the coming years within this market of popular clinics?
We will continue to expand access with the clinics, there is still a lot to be done. With the pandemic, we launched virtual emergency care and provide around 2,500 visits a month. So this issue of the digital journey integrating with the face-to-face one will be key. We see this a lot, either as the first care, as a screening, before the actual in-person consultation, as a follow-up care. Living in the North/Northeast of Brazil, I understand that digital is far from replacing face-to-face. I see it as a complement. I think we have a very big challenge with the aging of the population and the increase in chronic diseases. We're going to have to work hard to find a way to treat people, deal with those costs and this naturally increasing need for treatment. I think a lot about the health insurance situation and the high readjustments. We don't want an overload on the SUS or on the popular clinics. We need harmony in this sector.
Does the SIM clinic have a reference company, whatever outside, that served as a benchmark?
I don't see a company that does exactly the same as what we do, but I think there are a lot of companies that do very interesting things. I really like Dr. Consulta's work in São Paulo, now with more of a healthcare provider's footprint. I really admire them. There's a network out there that I also admire, which is One Medical, which was recently acquired by Amazon. They do this digital issue, complementing the face-to-face in a fantastic way.
What advice would you give to future entrepreneurs within Health?
Health is very great. My tip would be: specialize! If you want to resolve health pain, you must join the subgroup of the subgroup. If you specialize and thoroughly understand a specific condition, the chances of finding your way and creating a sustainable value proposition increase exponentially.
