French hospitals await MCO cut anxiously

French private hospitals are waiting anxiously to hear what the new MCO (medicine, surgery, obstetrics) rate will be.  The figure should be announced tomorrow. Last year it was delayed by two weeks and effectively came to a cut of a disasterous 2.5 percentage points. So what is the betting on this year?

Stephane Pichon at consultancy Your Care says: “A cut of half a percentage point would be good, one percentage point is entirely possible and worse than that can not be ruled out.”  Others fear worse. One source said that the consensus is that MCO will be cut by 2 percentage points. Frantic lobbying is going on behind the scenes.

Our Analysis: A cut of 2 percentage points would hit even the large groups fairly hard. Capio has been making much in its results of the fact that it just about managed to counteract the effect of last year’s cuts and a strike through effiiciency savings and shorter AVLOS.  Pulling that particular bunny out of a hat year-on-year will not be easy.

It is a sign of impotence that the sector doesn’t know what it will be and doesnt even know when the price will be announced. EBITDA margins for larger private hospital chains hover at around 17-20%.

Source: Heathcare Europa 2-mar-16