Medical Device Daily Contributing Writer

PARIS — The leading private hospital company in France, Générale de Santé, reported a 21.3% growth in revenues for 2006 to 11.7 billion ($2.2 billion) and said it is prepared to make an acquisition this year valued at around 11 billion ($1.3 billion).

"The difficult context in which the group operated in 2006 demonstrated the robustness of our business model and allowed us to meet the commitments made at the start of the year," said CEO Daniel Bour at a Paris press conference. Since mid-2005, Bour has led an aggressive campaign to divest properties and tighten operations while expanding the company toward a goal of holding a 20% market share in France.

The acquisition of Hexagone Hospitalisation, the second-largest group in this highly fragmented private clinic market, at the start of 2006 increased Générale's capacity in France by 20%, with 2,200 beds in 15 facilities, significantly in the region surrounding Paris.

Yet in March and again in September of last year, the French Health Ministry lowered reimbursement rates, affecting 61% of the company's business for medical, surgical and obstetrical procedures. This action aggravated the erosion of operating margins caused by an inflation of costs estimated to be 1.26% in 2006, Bours said.

On a year-to-year basis, margins were steady in 2006, up 0.3% on the previous year to 7.2%, producing an operating income of 127.2 million ($35.4 million) or 13.4% of revenue.

Bour credited productivity improvements and the integration of new medical technologies for the stable performance and for meeting the target for organic growth of 4% set at the beginning of the year.

Générale significantly reduced debt from 1588 million ($764 million) at the end of 2005 to 1439 million ($571 million). Twenty-eight sites were sold and leased back, creating "significant financial resources to pursue external growth," according to Bours, who estimated those resources at 11 billion.

"We have the potential and the intention to realize a very large project in Europe," he said, citing Spain, Germany and the UK as attractive regions for growth.

The French business newspaper Les Echos reports the company's finance director saying an offer for some part of Capio AB is now being studied.

Taken private in November 2006 by the Stockholm-based investment funds Nordic Capital and Apax, Capio operate clinics and hospitals in Sweden, Norway, Denmark, Finland, the UK, Germany, France, Spain and Portugal and reports revenues for 2005, the last full-year figures reported prior to the acquisition, at 11.4 billion.

Générale does not exclude other deals, said the newspaper, considering the harsh competition from other investment funds in the sector.

For 2007, Générale de Sante targets 5% organic growth while holding margins in the 7% range.

With a current market share of more than 16%, Générale de Santé is the leading private hospital group in France, with 184 care centers and almost 15,000 beds covering services for general medicine, surgery, obstetrics, mental health, sub-acute care and rehabilitation, oncology/radiotherapy, diagnostics and home care. The company also has 12 centers in Italy.

French eHealth program delayed until 2008

The launch of the French system for sharing patient records among health care providers has been pushed back to 2008. Pressed in an interview published last week in Quotidien du Médecin (The Doctor's Daily), the head of the program, Jacques Sauret, confirmed that "against our wishes" the call for proposals for constructing the benchmark host network, already delayed since December, will be sent by the end of March. It is just a matter of "mechanics" after that, said Sauret, pushing out the calendar for the first public tests until next year.

Acknowledging that a "tremendous uncertainty" has hung over the program since January, Sauret said the program is moving forward, with 126 million ($33.8 million) in agreements to be let this month and that interoperability standards for software were recently issued.

In February, Sauret's proposal to use the current social security number held by all citizens as the referencing code for managing the electronic health records was shot down by the health minister. The newspaper reported a government estimate in December that using a different identifying number for patients would cost an additional 1500 million ($650 million).

Scotland: ePrescribing Network in September

This year Scotland takes the first step toward e-prescribing with the planned launch of an electronic transfer of prescriptions (ETP) between general practitioners and pharmacies.

Medical practices are in the process of updating computer systems. In July pharmacies will begin testing transfers with the electronic acute medication service (eAMS).

Alison Strath of the Scottish Executive Health Department said that starting in September, general practitioners will be able to use the system, which will also accept repeat prescriptions. She said, "eAMS is based on a pilot where in excess of 1 million ETP prescriptions were issued by a number of GP practices."

A practice group creates a prescription with two key features, a bar code on the left-hand side, and code for UK medicines and devices under each item. The patient receives the printout of the bar code and at the same moment, the prescription is sent electronically to the ePharmacy Message Store (ePMS).

In the pharmacy, the bar-coded prescription is scanned, which retrieves the prescription data from the ePharmacy Message Store. The fields on the pharmacy dispensing screen are automatically filled in.

Once a pharmacist checks the details, a label is printed and a message sent back to the ePMS. The prescription transaction and data are forwarded to the Practitioner Services Division for payment.