This document summarizes the opportunities and challenges in the Turkish private healthcare market. It notes that demand for healthcare services has been steadily increasing in Turkey due to factors like population growth, aging population, and rising incomes. This has attracted many private investors and the number of private hospitals and beds has significantly increased in recent years. However, the government has also introduced some restrictions to control costs, like limiting new licenses and capping payments from public insurance. Major players in Turkey have pursued growth through mergers and acquisitions with private equity backing. The landscape also provides opportunities for international expansion and investment in areas like medical tourism and hospital management in other regions like MENA.

1. 1
Turkey: Riding The Tiger
Murat Dayanıklı, MD, MPH, MBA
Healthcare Europa Conference
London, March 15, 2012

2. 2
Why Turkey?
 Turkey is the perfect investment environment for so many reasons.
 Political stability
 Successful economy
 Favorable demographics
 Diligent and dedicated labor force
 Liberal investment climate
 Well developed infrastructure
 Geographic location
 Positive international relations

3. 3
Why Turkish Healthcare?
 Demand for healthcare services has been increasing at a steady pace.
 GDP and total disposable income
 % of GDP spent on healthcare
 Population growth
 Ageing
 Non-communicable diseases
 Public insurance coverage and governmental spending

4. 4
Private Investors Lured
 Due to such indicators, the number of acute private healthcare providers
has significantly increased during the past years.
2002 2006 2007 2008 2009 2010
Private 271 331 365 400 450 489 +10.3%
Other 61 49 48 46 46 45 -2.1%
University 50 56 56 57 59 62 +2.6%
MoH 774 767 848 847 834 843 +2.4%
Total 1.156 1.203 1.317 1.350 1.389 1.439 +4.6%
2002 2006 2007 2008 2009 2010
Private 12 15 17 21 25 28 +17.7%
Other 18 18 18 18 18 17 -1.0%
University 26 31 31 30 30 35 +2.9%
MoH 103 119 120 119 122 120 +0.1%
Total 160 183 186 188 196 200 +2.3%
CAGR 2006-2010
Number of Hospitals
Number of Beds (000)
CAGR 2006-2010

5. 5
Restrictions May Apply!
 To control the penetration of private providers and demand, the
Government has introduced restrictive measures.
 Limits on issuing licenses for new private hospitals
 Caps on out-of-pocket payments received from SGK patients
 Fixing SGK prices
 Limiting the number of doctors employed at private hospitals
 Preventive medicine measures
 Full-time employment act for physicians
 PPPs

6. 6
Recipe for Sustainability
 Private providers have established different strategies to respond to the
everchanging environment.
 Organizational effectiveness
 Performance improvement
 Growth
 Mergers and acquisitions
 International market penetration

7. 7
Growth is Excitement
 Immature, highly fragmented private provider market with large room for
growth potential is ripe for consolidation.
Providers
# of
Beds
Medical Park 17 2.566 9% 151
Acıbadem 14 1.914 7% 137
Universal 14 1.463 5% 105
Medicana 7 845 3% 121
Memorial 6 815 3% 136
Şafak & Arkaz 6 552 2% 92
Medline 6 507 2% 85
Subtotal 70 8.662 31% 124
Other 419 19.401 69% 46
Total 489 28.063 100% 57
# of
Hospitals
Bed
Share
Beds per
Hospital

8. 8
Growth is Excitement
 Transactions mostly with PE funds in the previous years have enabled
major players to increase their size and consolidate the market.
Providers Investor
Medical Park 40% Carlyle
Acıbadem 75% IHC
Universal 26% ADM
Memorial 40% Argus, QFIB
Şafak & Arkaz 51% Turkven
Kent 65% MidEuropa
Dünya Göz 30% NBK
İstanbul Cerrahi 100% Mineks, N/A
Shares
Acq'd

9. 9
Growth is Excitement
 However, the landscape limits the number of players that may be of
interest to financial or strategic investors from abroad.
 Size
 Good corporate governance
 Management platform
 Financial performance
 Off the book accounts
 Business technology
 Control rights

10. 10
Growth is Excitement
 No matter what, in addition to ongoing first round transactions we will
see second and third round M&A activities as well as IPOs.
 Government loosens the tight control
 Room exists for larger networks
 Stop-loss arrangements on their way
 Mergers will occur

11. 11
Growth is Excitement
 International market penetration come in many forms to also grow the
business.
 Medical tourism
 Education and consulting
 Hospital management
 Direct (OpCo) investment

12. 12
Growth is Excitement
 Among all surrounding regions, MENA is the most promising area for
Turkish private providers.

13. 13
Growth is Excitement
 Our strengths enable us to outshine competitors around the region.
 Strong & dynamic management culture
 In depth knowhow at modern hospital management
 Recruitment/retainment of high caliber professionals in every field of specialty
 Ability to render all clinical services
 World-class architecture, engineering, technology and equipment
 Comfort with the culture, religion, values and geographical proximity
 Best value proposition

14. 14
 For questions you may have, please do not hesitate to contact us.
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