Products and Services
We operate in the supplementary health sector and our strategy is focused on a vertical service structure, pursuant to which we provide services to beneficiaries primarily at our own service network. With this structure in mind, our purpose is to provide quality health care and dental services at a low cost, under one operating segment, whose operating and financial results are regularly reviewed by our board of directors on an aggregate basis. Our board of directors makes decisions based on this review.
Our organizational structure includes hospitals, clinics and other service units that meet the demand of our beneficiaries that purchase the products sold by our health care plan operator under a vertical business model, and whose final objective is to maximize the generation of consolidated value (operator and service units) for our shareholders and to provide quality services to our beneficiaries in general.
We operate through two types of products: (i) Medical Assistance Plans; and (ii) Plans of Dental Care, spread geographically.
Health Care Plans
Our health care plans in the individual/family and corporate categories are sold in all states of the Northeast region and in the states of Amazonas and Pará in the North region of Brazil. We prefer to sell our health care service in cities in which we have our own service network.
We seek new clients that are large regional and/or nationwide companies that have at least 70% of their employees located in cities in which we have our own service infrastructure. We believe that only by operating under this model we can succeed in providing quality services at low costs.
Our clients are divided in two major categories: retail and corporate. Our retail category has a team of sales managers in charge of the relationship with our sales representatives operating in the retail segment. These sales representatives have sales targets for individual/family plans, adhesion group plans and corporate plans for companies with up to 99 beneficiaries. Our experience shows that retail clients have similar profiles, especially clients of individual, adhesion group and small company plans. The corporate category focuses on large companies with at least 100 employees and that already have a more structured human resources department, including an in-depth analysis of companies of the sector.
Our sales network consists of brokers who focus on medium and large corporate clients, and sales representatives who focus on small corporate clients and individual clients. In order to motivate and direct them, their compensation is calculated as follows: (i) brokers who work for large brokerage and sales companies, receive a variable percentage on the total amount of executed agreements for their duration, as brokers add value and intelligence to the management of these clients; and (ii) sales representatives who operate in a less sophisticated market, receive fixed commissions based on the monthly fees of beneficiaries.
We also adopt a certification policy for our sales representatives. According to this policy, the greater the number of sales, the lower the number of cancelations (client loyalty) and the lower the level of default of beneficiaries, the better the rating of our representatives. Our certification has four ratings: Diamond, Gold, Silver and non-rated. Sales commissions range from 2.3 times to 3.2 times the amount of monthly fees, according to the rating of sales representatives.
Additionally, we have a sales team called Adesão. This team is focused on selling our plans to the relatives, neighbors and friends of the beneficiaries of our portfolio in order to expand our operations.
We aim to keep our clients satisfied and loyal to our brand. Accordingly, we have a client relations area that focus on post-sales operations, meeting the demands of our beneficiaries and acting as an interface between us and final beneficiaries.
We have three types of health care plan products:
• Nosso Plano: Nosso Plano is the bestselling product among our health care plans. It provides access to an exclusive service network with 25 hospitals, 74 medical units, 17 emergency units, 72 diagnostic imaging units and 67 collection units. Clients of Nosso Plano may choose between the sick bay and room categories. The sick bay consists of a room with two beds, duly equipped to allow beneficiaries to share during their stay. Under the room category, beneficiaries are entitled to an exclusive room for their treatment, as applicable;
• Mix: our Mix line provides access to our exclusive service network, as described above, and limited access to our accredited network. Our accredited network consists of 1,479 accredited entities, of which 96 are hospitals, 417 are doctors and 966 are clinics; and
• Pleno: our Pleno line provides access to our exclusive service network and our accredited network, which is carefully selected to ensure quality services. This coverage provides beneficiaries with access to our entire accredited network.
Our Exclusive Service Network
We believe that our units are equipped with state-of-the-art technology to provide quality services and ensure productivity. We seek to distribute our units in central areas with easy access to public transport in the cities in which we operate, facilitating the access to our services. In larger capital cities, we also prioritize units located in non-central areas, so that our beneficiaries do not have to travel long distances to be serviced. For example, in the city of Fortaleza, we have four hospitals, two emergency units, 14 clinics, 13 diagnostic imaging units and 12 collection units. In addition to high complexity hospitals, we have two specialty hospitals: Hospital Luis França, which is an exclusive pediatric hospital, and Hospital e Maternidade Eugênia Pinheiro, the first private hospital in the state of Ceará that is exclusively focused on women. Our clinics, diagnostic imaging units, emergency units and collection units are distributed in the city to provide quality and efficient services to our beneficiaries.
Unlike our health care plans, considering the lower complexity of dental procedures and the availability of dentists in Brazil, our dental plans provide services exclusively through our accredited network, as we believe that this is better for our beneficiaries and generates more value for our shareholders. Our dental plans already cover all states in Brazil. As we obtain new clients, we seek to accredit more partner dentists to build a value chain among us, beneficiaries and dentists.
As of December 31, 2017, we had 1.7 million beneficiaries of exclusively dental plans and a network of more than 5,000 dentists located in Brazil. Through our technology and systems, we seek to foster the relationship between Hapvida, dentists and beneficiaries, always offering service options that are close to our clients and fit in the schedules of our dentists. Our beneficiaries can schedule appointments through our app, website or telephone. Dentists can access our system and check their schedules for the following days, organizing appointments and controlling their financial flow.
Similarly to our health care plans, we sell our dental plans through sales teams focused on the retail and corporate areas, independent brokers, sales representatives and alternative sales channels, called Affinity. Affinity sales are made through partners, including benefit clubs and/or mileage programs, such as KM de Vantagens of Rede Ipiranga.
Our dental plans offer four types of products: Prevenção e Urgência, Misto, Pré-Pagamento and Além Rol. Prevenção e Urgência is our cheapest product, according to which only amounts related to prevention and emergencies procedures are billed to beneficiaries. Additional services may be provided to beneficiaries under the post-payment category, in which case they are directly paid to service providers. Misto is our bestselling dental product, which includes nationwide coverage for all procedures listed by ANS. Finally, Além Rol ensures superior coverage compared to what is required by ANS, including orthodontics, orthotic procedures and prostheses.
The accreditation of dentists of our accredited network is based on the sufficiency of our network. We have a georeferencing software that identifies the number of dentist appointments of our Hapvida beneficiaries. When our network requires more dentists, we resort to our on-site team and call center operators to accredit service providers. We review our dentist data base and the recommendations of our accredited dentists. Then, we contact the relevant dentists by phone or pay them a visit to collect the documents required for accreditation. When we complete the accreditation process, the accredited dentist receives the training required to operate our systems and protocols. Finally, the dentist becomes available through our accredited network and beneficiaries can schedule their appointments through our app, website or call center.
Other Products and Services
Our service units are primarily directed to the care of our beneficiaries. However, in some of our hospitals, we also offer services to other health plans or private clients which are served with the same quality of care as Hapvida’s beneficiaries.
We also innovate by offering an app to our doctors, which is a platform that allows them to review all laboratory and/or imaging results, increasing efficiency in their daily routine. We also have a dedicated team to review the surgical standards of our units through an analytics platform, with high speed data processing capability to identify any shortcomings in the main surgical procedures of our hospitals. We developed this platform internally to review treatment standards and related costs.
Unlike our competitors, we are the only health care company that has a fully electronic patient’s chart. We obtain information of each beneficiary of our own network, as every procedure requires biometric confirmation. Additionally, we already have IT platforms in place that obtain information of procedures performed at our accredited network for each beneficiary, which effectively allow us to have the patient’s history recorded in our systems. This innovation is a competitive advantage, as we are able to decrease the number of unnecessary test requests. It also assists us in making the right diagnosis and selecting the best treatment for our clients.
Our beneficiaries will also be able to interact with health care providers and have their follow-up appointment fully online through an app which is being tested in one of our hospitals. The initial appointment is made at the doctor’s office and, if a follow-up appointment is required, it can be made exclusively through our app.
Also, it is worth mentioning that our Board of Directors has two internal technical working groups focused exclusively on process optimization and the quality of our services, namely, the Preventive Medicine Committee and Protocols and the Hospital Quality and Supplies Commission. The work carried out by our technical committees was important to institute various measures that contributed to the quality, innovation and optimization of our processes, such as the specific training of the employees of the Own Network, the elaboration and follow-up of the satisfaction survey of the beneficiaries, as well as the standardization of hotel processes. In addition, the Board of Directors is advised by the Transformation and Innovation Committee, whose main objective is to bring innovative experiences and opportunities to increase the efficiency and quality of our services.