JOSÉ DE MELLO SAÚDE - josedemellosaude.pt · Investment Case IEGRAED REPOR 2017 About José de Mello Saúde Message from the chairman Business model Strategy, achievements and goals

JOSÉ DE MELLO SAÚDE

INTEGRATED REPORT 20172 INDEX

About José de Mello Saúde

Organisational overview

Economic performance

José de Mello Saúde in figures

Clinical performance

External environment

Social performance

Dialogue with stakeholders

Environmental performance

Message from the chairman

Investment Case

Business model

Strategy, achievements and goals

Governance Model

Research, Development and Innovation

Make-up and powers of the governing and supervisory bodies

Risk management, main risks and uncertainties

Performance

Materiality Matrix

Commitment to the Sustainable Development Goals (SDG)

INDEX

01

02 Corporate Governance

Integrated Report

05

06

07

10

12

16

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24

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26

32

37

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44

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INTEGRATED REPORT 2017

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3REPORT PROFILE

José de Mello Saúde’s Integrated Report contains financial and non-financial information of the organization and is drafted according to the guidelines of the IIRC – International Integrated Reporting Council. Regarding the period between 1 January and 31 December 2017, this document includes information about the strategy, management and performance of the main business areas of José de Mello Saúde, S.A. (hereinafter José de Mello Saúde or JMS), the holding company of a private healthcare corporate group, with headquarters at Av. do Forte, No 3, Suécia III building – Floor 2, in Carnaxide. The share capital of José de Mello Saúde is owned by José de Mello S.G.P.S., S.A. (65.85%), by Amélia de Mello Foundation (4.15%) and by Farminveste, S.A. (30%).

José de Mello Saúde’s Integrated Report is published annually and is complemented with the information provided in the (i) Financial Statements Report, (ii) Clinical Quality Report and (iii) Sustainability Report – GRI Appendix. All information is available in the institutional website at http://www.josedemellosaude.pt/

In 2017, José de Mello Saúde revisited its materiality1, listening to its stakeholders and adjusting the expectations to the strategy. In line with this financial year, José de Mello Saúde also evolved to the use of the latest requirements and orientations of the Global Reporting Initiative (GRI), GRI Standards that replace the G4 version used in the latest report, adopting the option “Agreed – Essential”.

José de Mello Saúde welcomes comments on this document or on any matter related to its corporate reporting practices, which should be sent to the Communication and Sustainability Department using the following e-mail address: [email protected]

1Detailed information about José de Mello Saúde’s Materiality Matrix can be consulted in chapter ‘Dialogue with stakeholders’

REPORT PROFILE



01INTEGRATED REPORT JOSÉ DE MELLO SAÚDE

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5ABOUT JOSÉ DE MELLO SAÚDE

ABOUT JOSÉ DE MELLO SAÚDE

Organizational overview

and employees, José de Mello Saúde places ethical issues at the centre of its activity. Governing its conduct by values such as the Respect for Human Dignity and Well-being of the Individual, José de Mello Saúde decided to create a Code of Ethics for all CUF units. An Ethics Council2, an advisory body of José de Mello Saúde’s Executive Committee, was also established.

In parallel with the Ethics Council, the larger healthcare units have their own Ethics Committee, under the law. This Committee is composed by internal staff, alongside external individuals with deep knowledge of the ethical matters.

OrganizationJosé de Mello Saúde develops its activity through a network of CUF private healthcare units and hospitals integrated in the Portuguese National Health Service (Serviço Nacional de Saúde), operated under public-private partnership (PPP).

In 2017, José de Mello Saúde expanded its portfolio with the opening, in October, of CUF S. João da Madeira Clinic, and the acquisition, in December, of Coimbra Private Clinic. This will, in the future, become the CUF Coimbra Hospital.

With the expansion of the network to eight hospital and nine outpatient clinics, CUF is now present in Lisbon, Oeiras, Cascais, Sintra, Mafra, Torres Vedras, Santarém, Matosinhos, Porto, Viseu, S. João da Madeira and Coimbra.

José de Mello Saúde also ensures, via public-private partnerships (PPP), the management of Braga Hospital and Vila Franca de Xira Hospital, both part of the Portuguese National Health Service.

From an organizational perspective, the hospital and outpatient units were grouped into two Coordinating Committees – CUF and PPP. The CUF network is broken down into three geographical clusters – Descobertas, Tejo and Norte – in a rationale of coordination around the three large CUF Hospitals: CUF Infante Santo Hospital, CUF Descobertas Hospital and CUF Porto Hospital.

Who we areFounded in 1945, with the CUF Hospital, José de Mello Saúde operates in the healthcare sector in Portugal.

VisionTo be a leader in deliveringdistinctive quality health care supported by an integrated network of high-performance units, both in the private and public sectors, and presenting growth options in select markets.

MissionTo promote the provision of healthcare services with the highest level of knowledge, respecting the primacy of life and the environment, through the development of the intellectual capital of the organizations, in a permanent search for excellence.

Values

• Respect for human dignity and well-being• Human development• Competence • Innovation

Ethics

Business Ethics is a fundamental value of José de Mello Saúde, both due to the area in which it operates as well as to relevance of the theme for José de Mello Group. As an entity that provides healthcare, governed by principles of good management and transparency, striving for respect for customers, partners, shareholders

2 More information about the Ethics Council can be found in chapter ‘Governance Model’.


RELATÓRIO INTEGRADO 2017 6


ABOUT JOSÉ DE MELLO SAÚDE

From an organisational perspective, the hospital and outpatient units were grouped into two Coordinating Committees – CUF and PPP, with CUF network divided into three geographical clusters – Descobertas, Tejo and Norte – in a rationale of coordination around the three largest CUF Hospitals.

VISEU

COIMBRA

CUFPORTO

INSTITUTOCUF

CUF VISEU

CUF COIMBRA

CUFDESCOBERTAS

CUFINFANTE SANTO

CUFALMADA

CUFBELÉM

CUFMIRAFLORES

CUFSINTRA

CUFSÃO DOMINGOSDE RANA

CUFCASCAIS

CUFAlVALADE

CUFMAFRA

CUFTORRES VEDRAS

CUFSANTARÉM

CUF SÃO JOÃO DA MADEIRA

SANTARÉM

ALMADA

VILA FRANCADE XIRA

TORRES VEDRAS

LISBOA

PORTO

BRAGA

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CASCAIS

José de Mello Saúde


RELATÓRIO INTEGRADO 2017JOSÉ DE MELLO SAÚDE IN FIGURES 7

ONE YEAR IN NUMBERS

ADMISSIONS

EMERGENCIES

IMAGING EXAMS*

CHEMOTHERAPY SESSIONS

RAMI:RISK-ADJUSTED MORTALITY INDEX

SURGERIES

CONSULTATIONS

BIRTHS

RADIOTHERAPY SESSIONS

1,1 MILLION

658 THOUSAND

828 THOUSAND

21 THOUSAND

0,6

93 THOUSAND

2,4 MILLION

7.843

62 THOUSAND

0,48RARI:RISK-ADJUSTED READMISSIONS INDEX

José de Mello Capital

FundaçãoAmélia de Mello

Farminveste, S.A.

66%4%

30%

EMPLOYEES

OPERATING INCOME

DOWNLOAD’S APP MYCUF

HEALTHCARE UNITS

EBITDA

CALLS ANSWERED BY THE CONTACT CENTRE

INPATIENT BEDS

CONSOLIDATED INVESTMENT

OPERATING THEATRES

CONSULTATION ROOMS

8.058637,4M€ | +8,7%

345 THOUSAND

1972,0M€ | +5,3%

3 MILLION

1.543 190,3M€

92

1.165saudecuf.pt

* MRI, Ultrasound, CT and ECG

INSTALL IT NOW

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INTEGRATED REPORT 20178 MAIN INDICATORS

OPERATING INCOME

EBITDA

INVESTMENT IN R&D+I

ENERGY INTENSITY

HOURS OF TRAINING

No. OF VOLUNTEERS

DOCTORS IN MEDICAL INTERNSHIP

637,4M€

72,0M€

1,8M€

45 kgep/m2

133.314

65

485

Financial Capital (€)

Intellectual Capital

Natural Capital

Human Capital

Social Capital

2015

2015

2015

2015

2015

Operating Income

Investment in R&D+I (M€)

Electricity consumption (MWh)

Human Resources Indicators

Investment in the community (€)

Social indicators

Clinical Events and Education for Healthcare Indicators

Training Indicators

560,2

2,6

46.406

586,3

3

48.120

EBITDA

Medical Internship (No. Doctors)

Energy intensity (kgep/ m2)

Number of employees

Donations

63,5

316

47

7.055

212.000

68,4

785

49

7.469

218.537

EBIT

Clinical Trials (No. Trials)

Water Consumption (m3)

Women

Natural gas Consumption (MWh)

Men

No. of Volunteers

Hazardous waste accumulated (ton)

Number of Hires

Number of participants in training activities

Number of Hours of Training

Average hours per employee

42,2

n.a.

323.716

25.632

1.500

53

5.555

21.108

1.561

1.113

1.187

8.756

115.988

16,44

41,5

130

349,342

25.757

1.570

50

5.899

25.838

1.360

1.209

945

8.086

121.748

16,30

Net profit 21,9 23,9

2016

2016

2016

2016

2016

2017

2017

2017

2017

2017

CO2 emissions (tCO2)

Number of Hires

Main indicators 2017

637,4

1,8

50.185

72,0

485

45

8.058

286.746

42,6

124

368.392

22.873

1.683

65

6.375

21.334

1.797

1.252

1.205

16.831

133.314

16,54

22,8



INTEGRATED REPORT 201710 EXTERNAL ENVIRONMENT

3| 4| 5| 6| 8 e 10Portugal Eurosistema – Economic Bulletin – December 2017https://www.bportugal.pt/sites/default/files/anexos/pdfboletim/be_dez20176_p.pdf

7 e 9Autumn 2017 Economic Forecasthttps://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/autumn-2017-economic-forecast_en

External Environment

In 2017, Portugal followed the moderate economic growth trend recorded throughout Europe. The national Gross Domestic Product (GDP) recorded an annual variation rate of 2.6%, an amount that represents a year-over-year increase of 1.1 pp3 and is higher than the GRP’s growth estimate in the Euro area (2.2%). From 2018 to 2020, Portugal is expected to maintain its economic growth, albeit at a gradually lower rate: 2.3%, 1.9% and 1.7%4. Within three years, it is expected that the GDP will be 4% above the levels prior to the global financial crisis5.

Internally, the economic recovery remains supported by the acceleration of exports and growth of domestic demand. In 2017, public consumption grew 0.1% and private consumption grew 2.2% (with a variation of -0.5 pp and +0.1 pp, respectively, in comparison with the previous year). This last change reflects the growth in disposable income and the maintenance of consumer confidence at particularly high levels, resulting from the improvement in the labour market conditions. It should be noted that private consumption grew in line with disposable income, which resulted in a relatively stable savings rate that was up from previous years6.

Economic growth was reflected in a recovery of the labour market, with employment growing 3.1% year-over-year (+1.5 pp vis-à-vis 2016) and growing above estimated for the euro area (+1.5%)7 – the highest variation since 2008. The unemployment rate dropped to 8.9% in Portugal, down 2.2 pp year-over-year8, while it is believed to have been 9.1% in Europe9.

In 2018, Portugal is expected to continue to see growth in the annual employment rate, although at a slower pace, and to maintain the downward trend of the unemployment rate. The persistence of external and internal constraints, namely the burden of the debt, the adverse demographic developments and the inefficiencies in the labour and product markets, has prevented real convergence with the euro area10.

INTEGRATED REPORT 2017 11EXTERNAL ENVIRONMENT

11INE [National Institute of Statistics], Cont a Satélite da Saúde 2014 – 2016Pe https://drive.google.com/file/d/1QCbdSY3diCDaGJ6S90L6BlNYmLUw-eXP/view?pli=1

12Associação Portuguesa de Seguradores [The Portuguese Association of Insurers], Management Indicators – Health 2017.09 https://drive.google.com/file/d/1FajX9YpgAT7TW-D3YrqxtL7XWM8-4q2d/view?pli=1

opening CUF São João da Madeira Clinic and acquiring Clínica Particular de Coimbra, the future CUF Coimbra Hospital, a land in Sintra for the construction of the future CUF Sintra Hospital (which will replace the CUF Sintra Clinic), a land in Leiria for the construction of the future CUF Leiria Hospital and the surface rights of Hospital Ortopédico José de Almeida, in Parede, Cascais. The reinforcement of the growth strategy was also materialised in the construction of the future CUF Tejo Hospital and in the expansion of CUF Descobertas Hospital and of CUF Almada Clinic.

Regulatory and legislative changes with impact on the activityIn 2017 there were no regulatory and legislative changes with significant impact on José de Mello Saúde’s activity.

Healthcare IndustryIn 2015 and 2016, the current expenditure in health grew again in Portugal, recording, in nominal terms, an increase of 3.1% and 2.7%, respectively. In both years, and according to the Portuguese National Statistics Institute (INE), the nominal growth rate was below that of the GDP (3.7% in 2015 and 3.0% in 2016), a trend that has been observed since 2010.

In the same period, the growth ofpublic current expenditure was more pronounced than the private current expenditure. In 2015, public current expenditure grew 3.3%, with current private expenditure at 2.7%. Preliminary results for 2016 indicate a variation of 2.8% and 2.6%, respectively.

From 2014 to 2016, about 64.9% of current expenditure in healthcare was supported through funding schemes from the Public Administrations. In the past two years, the relative value of the public current expenditure grew slightly, standing at 66.2%. In 2016, the public current expenditure per capita was 1,061.15 euros, while the private one was 540.74 euros. To the contrary, the weight of the current expenditure of the Portuguese National Health Service and Health Sub-Regions (58.2% in 2014 and 57.2% in 2016) and households (27.7% in 2014 and 27.4% in 2016) declined slightly. On the other hand, there was an increase in the relative importance of the financing of insurance companies (4.0% of current expenditure in 2016, 0.4 pp more than in 2014)11.

The health insurance market confirmed the expected growth trend, with the number of insured people growing 11.4% between 2015 and 2016. The report from September 2017 recorded a year-over-year increase of 2.7%, with the number of insured people going from 2,262,257 to 2,324,371. This growth is mostly explained by the sharp rise in individual insurances, which grew 4.9%12.

In this macroeconomic scenario, and despite the persistence of external and internal constraints, in 2017 José de Mello Saúde was able to strengthen its aspirations of consolidating the CUF network,

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INTEGRATED REPORT 201712 DIALOGUE WITH STAKEHOLDERS

José de Mello Saúde has several mechanisms to interact with its stakeholders.

Stakeholder ReportingInteraction Mechanism

Main topics for the stakeholders

Shareholders

Funders

Payers

Portuguese Securities Market Commission (CMVM)

Suppliers

Portuguese Health Regulatory Authority

Meeting of the Board of Directors

Regular meetings, contract negotiations

Regular meetings, contract negotiations, administrative interactions

Investor Relations Office

Regular meetings, contract negotiations

Audits, surveys, clarification meetings

General Meeting

Specific meetings and events

Value creation

Financial sustainability

Access to private healthcare, Pricing

Compliance with applicable securities regulation

Contracts and Payments, risk and impact mitigation mechanisms, ethics and transparency

Regulation, Licensing, National Health Evaluation System (SINAS)

Periodic, thorough information

Ethics and transparency

Regular provision of institutional information (Institutional Communication, Integrated Report, Financial Statements Report, Clinical Quality Report and GRI Appendix)

Regular provision of information, Financial Statements Report

Webservices (electronic interaction means), Integrated Report, Financial Statements Report, Clinical Quality Report and GRI Appendix


Internal evaluation report of clinical consumables suppliers

SINAS Portal, Clinical Quality and Safety Report

Dialogue with stakeholders

INTEGRATED REPORT 2017 13DIALOGUE WITH STAKEHOLDERS



Regional Health Authorities (ARS – Ministry of Health)

Employees

Contract manager, annual contracting of the activity and performance indicators, biannual and annual performance evaluation report

Staff meetings

Corporate events

Welcome programme

+Talento Programme

+VIDA Magazine & Newsletters

CUF Academy

Employee satisfaction surveys

Breakfast meetings (with Chief Executive Officer and Directors of units)

Contact visit (with Chief Executive Officer)

Monitoring through people management systems (e.g., Performance Evaluation)

Meetings of Medical Council and Nursing Council

Contract compliance, accessibility, clinical quality and safety of the healthcare provided, continuous improvement of performance indicators

Evolution of José de Mello Saúde and growth strategies

Stability, prospects for professional and personal development, salaries, organization and working conditions

Monthly reports of activity and monitoring of performance indicators, annual patient and employee satisfaction surveys

People management processes within the company (performance evaluation, salaries, careers, training etc.)

Integrated Report, Financial Statements Report, Clinical Quality Report and GRI Appendix

Internal events

Internal channels of communication

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Customers

Customer Care Office, Customer’s Ombudsman

My CUF App

Contact Centre

Institutional and healthcare units websites

Accessibility to healthcare; Clinical quality and quality of service; Integrated offer; Accommodation and safety conditions of the units; Technological innovation

Customer satisfaction surveys

Phone number

Information leaflets

SMS

Institutional releases

+VIDA Magazine

Advertising campaigns

Smartphones

Innovation accelerators and Start-ups

Academic and Scientific Community

Collaboration or service agreements

Cooperation protocols, R&D activities in partnership, negotiation of contracts, clinical trials, observational studies, regular meetings

Channels of communication and marketing of units

Institutional publications

Strategic development challenges, support and investment models

Company’s performance, long-term commitment, Innovation and Sustainability

External events, boot camps, press releases, institutional information

Regular meetings, regular provision of institutional information (institutional communication, Integrated Report, Financial Statements Report, Clinical Quality Report and GRI Appendix)

Media Dialogue with the media Community impact, environmental and social impacts, Innovation


DIALOGUE WITH STAKEHOLDERS

INTEGRATED REPORT 2017 15



Industry associations

General public

Cooperation protocols, regular meetings, participation in working groups

Institutional and healthcare units websites, telephone and online communication channels

Company’s good practices; company’s strategy; Ethics and Transparency; signing of protocols

Portfolio of services, Innovation


Advertising campaigns, Regular provision of institutional information (Institutional Communication, Integrated Report, Financial Statements Report, Clinical Quality Report and GRI Appendix)

DIALOGUE WITH STAKEHOLDERS

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Materiality Matrix

José de Mello Saúde revisited its materiality exercise in 2017, identifying relevant key topics and collecting information that enables aligning the organization’s strategy to the expectations of the consulted parties.

Based on the recommendations of the Global Reporting Initiative (GRI), the process of drafting José de Mello Saúde’s materiality matrix helps to strengthen relationships of trust and dialogue with the stakeholders, to whom it is asked to help identify, select and prioritize the topics relevant to the organization.

The consultation of stakeholders, as well as the benchmark analysis and the analysis of the healthcare sector’s trends, enabled to identify 23 material topics, broken down into six major areas with impact on José de Mello Saúde’s value chain.

MATERIALITY MATRIX

15

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20

25

30

35

40

45

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55

60

65

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20 25 30 35 40

Stakeholders Internos

Saúde e Bem-Estar da População SAÚDE

SOCIEDADE

ORGANIZAÇÃO DA EMPRESA

ECONOMIA

CIÊNCIA

AMBIENTE

Segurança do Doente

Prevenção da Doença

Capacitação do Doente

Desempenho Económico do Grupo

Atendimento das Urgências

Funcionamento em Rede de Unidades

Setor Social e VoluntariadoConsciência Ambiental

Formação dos Cuidadores/ Familia

Parcerias com a Universidade

Plano Integrado ao Longo da Vida

Gestão do RiscoE-Health

Financiamento de Formação Cientifica

Cidadania Empresarial

Atenção ao Colaborador

Conciliação vida pessoal/ vida profissional

Alinhamento com a Investigação Cientifica

Inovação e Investigação Terapêutica

Atenção e Cuidado ao Doente

Tendências Demográficas

Atração e Fixação de Talentos

Stakehold

ers Externo

s

45 50 55 60 65 70

INTEGRATED REPORT 2017 17MATERIALITY MATRIX

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Fornecedores de serviços (imateriais)

Fornecedores de serviços (materiais)

Seguradoras

Banca

Universidades

Comunicação Social e líderes opinião

Associações de Doentes

Outras Associações da Área da Saúde

Setor Social Solidário

Câmaras Municipais

Entidades Públicas do setor da Saúde

Politicos

Grupo José de Mello

Médicos

Enfermeiros

Técnicos de Saúde

Administrativos

Técnicos Superiores

Dirigentes

Auxiliares

Fornecedores de medicamentos, equipamentos e consumíveis

5 10 15 200

Characterization of the StakeholdersFor the analysis of stakeholders’ expectations, the following groups were consulted:

• External stakeholders (customers, suppliers and society): For customers, questionnaires were sent by email to those who visited a CUF unit in the previous month. In the case of suppliers, the largest suppliers per good/service were consulted. In terms of social context, a set of entities/personalities with long relationships with José de Mello Saúde was identified.

• Internal Stakeholders: the Human Resources Department selected the employees considering two criteria: diversity (job category, geographic, tenure in the company) and quality (people with key roles in the organization to help build a structured thinking about Corporate Social Responsibility).

In the process, 119 people were heard in person and 300 valid replies were received for the electronic questionnaires.

Caracterização da Amostra - Número de Participantes por Tipologia

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Commitment to the Sustainable Development Goals (SDG)

COMMITMENT TO THE SUSTAINABLE DEVELOPMENT GOALS (SDG)

The 2030 Agenda for Sustainable Development of the United Nations consists of 17 Sustainable Development Goals (SDG) and 169 targets. Approved in September 2015, it was signed by 193 members, including Portugal.

Considering that companies should also contribute to reaching these goals, José de Mello Saúde prioritized the SDGs, identifying those that can have the greatest impact considering the nature of its activity, and those that can be directly associated with the relevant topics identified by the stakeholders in the preparation of the materiality matrix.

Thus, José de Mello Saúde believes that its activity and strategy can have a greater impact on eight SDGs.

In this report, we identify the chapters/sections with relevant information for each of the eight SDGs. José de Mello Saúde considers, however, that its activity can contribute indirectly to other SDGs (for more information, see the Sustainability Report – GRI Appendix).

In 2018, a more extensive analysis of the strategy alignmentwith the SDGs will be carried out, considering the risks/impacts and opportunities in the value chain of José de Mello Saúde.

ENSURE HEALTHY LIVES AND PROMOTE WELL-BEING FOR ALL AT ALL AGES

ENSURE INCLUSIVE AND EQUITABLE QUALITY EDUCATION AND PROMOTE LIFELONG LEARNING OPPORTUNITIES FOR ALL

PROMOTE SUSTAINED, INCLUSIVE AND SUSTAINABLE ECONOMIC GROWTH, FULL AND PRODUCTIVE EMPLOYMENT AND DECENT WORK FOR ALL

BUILD RESILIENT INFRASTRUCTURE, PROMOTE INCLUSIVE AND SUSTAINABLE INDUSTRIALIZATION AND FOSTER INNOVATION

ENSURE SUSTAINABLE CONSUMPTION AND PRODUCTION PATTERNS

TAKE URGENT ACTION TO COMBAT CLIMATE CHANGE AND ITS IMPACTS

PROMOTE PEACEFUL AND INCLUSIVE SOCIETIES FOR SUSTAINABLE DEVELOPMENT, PROVIDE ACCESS TO JUSTICE FOR ALL AND BUILD EFFECTIVE, ACCOUNTABLE AND INCLUSIVE INSTITUTIONS AT ALL LEVELS

STRENGTHEN THE MEANS OF IMPLEMENTATION AND REVITALIZE THE GLOBAL PARTNERSHIP FOR SUSTAINABLE DEVELOPMENT



INTEGRATED REPORT 201720 MESSAGE FROM THE CHAIRMAN

Continuing its strategy, José de Mello Saúde, in 2017, once again consolidated its leadership in the provision of healthcare of excellence in Portugal. We remain focused on quality and clinical differentiation, on flawless customer experience, on an efficient and sustained operation, on human development and on a growth agenda that generates value, crucial principles for us to serve the Portuguese people, asserting José de Mello Saúde as a partner for the development of the sector and of the country.

We are the largest national player in the healthcare sector, featuring a network with wide geographic coverage, which was reinforced in 2017 with the opening of CUF S. João da Madeira Clinic and the acquisition of Clínica Particular de Coimbra, currently CUF Coimbra Hospital. We have created the conditions to extend our activity to Leiria and Sintra, where we acquired land for the construction of the future CUF Leiria and CUF Sintra hospitals, the latter replacing the current CUF Sintra Clinic. We continued the works to expand the CUF Descobertas Hospital and the construction of the future CUF Tejo Hospital, in Lisbon, an investment of over 100 million euros, designed from scratch to fight and treat the Diseases of the Future.

Since its origin, José de Mello Saúde has been investing in a differentiating clinical project that is materialized daily in the clinical excellence of its units, where it guarantees a response centred on the patient. Annually, we subject the healthcare provided across the network to external evaluation, either by the assessment of the National System for Healthcare Evaluation (SINAS) or by applying clinical benchmarking models that evaluate via comparison the processes of clinical efficiency and quality. Two years ago we put in motion a project to measure clinical outcomes, which allows us to support a provision of healthcare based on results that are relevant for the patient. This project evolved into a clinical management model based on the creation of value in the provision of healthcare, the Value-Based Healthcare, which takes on a strategic role for our organization.

In the coming years, we will work to continue to expand this value cycle, increasing the monitoring of value in healthcare and investing in the Value-Based Healthcare model that contributes to measuring and supporting the results, putting the patient’s perspective at the centre of the decision.

MESSAGE FROM THE CHAIRMAN

Salvador de MelloChairman of the Board of Directors

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21MESSAGE FROM THE CHAIRMAN

José de Mello Saúde is, in fact, an agent of the NHS itself by running, under public-private partnership, the Braga and Vila Franca de Xira hospitals, which, in 2017, once again presented excellent results in clinical quality, being considered, respectively, the first and third Portuguese public hospitals with the highest number of maximum ratings in the National System For Healthcare Evaluation of the Portuguese Health Regulatory Authority.

We are therefore convinced that managing under the PPP model in healthcare is a success recognized by all the involved parties, with quality improvements, better access to healthcare and efficiency gains that are very important for the Portuguese Government and which must, in the future, be balanced between it and the private partner, ensuring the model’s sustainability.

I am elated by the work developed, in 2017, by the organization, which is increasingly prepared to face the challenges coming in the next few years. José de Mello Saúde is in a key moment of its history, with major achievements and a new and greater dimension of performance coming. Due to the corporate project we built and to all we have achieved as a team, I am confident that we will be able to meet the challenges the future will bring.

We also achieved other goals that enable us to consolidate José de Mello Saúde’s differentiating clinical project: CUF Oncology Institute secured the EUSOMA European certification as a Specialized Centre in the treatment of breast cancer in Portugal, and saw CUF Infante Santo Hospital recognized as a National Reference Centre for Cochlear Implants. CUF Viseu Hospital became the first private unit in the Centre of the country to receive the ISO 9001 certification from SGS for all of its services.

2017 also brought us significant achievements in the remaining strategic pillars of José de Mello Saúde’s performance. We continue working to ensure a flawless customer experience, which was once again recognized by the users, with CUF being once more the “Consumer’s Choice” in the Health & Well-being category and receiving the “Five Starts” and “Trusted Brand” awards in the Private Hospital category. Additionally, we reinforced our focus on a growing digital relationship with the customer through the launch of version 2.0 of the MyCUF application, now with more and better features, streamlining the customers’ relationship with CUF.

The efficient and consistent management of the operation, also a strategic pillar of José de Mello Saúde, has secured a solid performance in recent fiscal years and 2017 was not an exception. The operating income reached 637.4 million euros and EBITDA was 72.0 million euros, with growths of 8.7% and 5.3%, respectively, also resulting from a sustained growth trajectory in its assistance activity in the different areas of performance.

We continue to invest on human talent by attracting, training and promoting excellent professionals, one of the aims of José de Mello Saúde’s corporate undertaking. For example, in 2017, we launched the first edition of the Management for Doctors Course, we created the Aging discipline in Nova Medical School, within the scope of Tagus Tank, and we again rewarded research by granting five PhD scholarships in medicine amounting to 100 thousand euros, an unparalleled investment in postgraduate training in Portugal.

We know that an extensive and accessible network of private healthcare is important in the complementarity to the National Health Service, which will be both more efficient and sustainable as the relationship between the public and private services is greater.


INTEGRATED REPORT 201722 INVESTMENT CASE

INVESTMENT CASE

DIFFERENTIATING CLINICAL PROJECT

FLAWLESS CUSTOMER EXPERIENCE

The CUF network was awarded, for the second year in a row, with the “Consumer Choice” (Health & Well-being category), “Five Stars” and “Trusted Brand” prizes (in the Private Hospitals category);

CUF’s brand notoriety is higher than the competitors’ in terms of Top of Mind, Suggested Notoriety and Spontaneous Notoriety, according to studies carried out in June 2017;

Version 2.0 of MyCUF mobile application launched in 2017, with new and improved functionalities: scheduling of several medical acts at the same time, access to prescriptions and information about the nearest pharmacy;

Optimization of the access of CUF’s customers to their units, being possible for example, to perform automatic check-in and payment of medical acts through digital kiosks.

EFFICIENT AND CONSISTENT OPERATION

Through a strong effort to centralize and apply cross-cutting practices, José de Mello Saúde was the first operator in Portugal to implement a centralized purchasing department; In 2017, it created CUF Serviços, which includes Customer, Logistics and Operations areas, which facilitates the interconnection between corporate processes;

José de Mello Saúde’s operating blocks are provisioned via advanced logistics solutions;

José de Mello Saúde implemented a new approach to the development of Information Systems, based on Agile; Braga Hospital has the lowest operating cost per patient among all of the National Health Service’s hospitals, according to ACSS’s national benchmark;

Braga Hospital was awarded for the development, in cooperation with Vila Franca de Xira Hospital, of an innovative project to rationalize energy consumption;

Value Based Healthcare programme and monitoring of the value in healthcare in terms of pathologies: cataract, breast cancer and osteoarthritis of the knee;

EUSOMA certification of the CUF Oncology Institute, created in 2016, to enable an integrated and specialized approach centred on cancer patients and their family members;

ISO 9001:2015 quality certification in CUF Viseu Hospital and ISO 9001:2008 quality certification in CUF São João da Madeira Clinic, both obtained in the units’ first year of activity;

Gamma Knife Centre, equipped with a unique equipment in Portugal, highly differentiating in the treatment of brain tumours, arteriovenous malformations and metastases;

Renewal of the Joint Commission International (JCI) Accreditation at Vila Franca de Xira Hospital;

Recognition by the Portuguese Health Regulatory Authority of Braga Hospital and Vila Franca Hospital as the best and third best national public hospitals, classified through the National Health Evaluation System (SINAS).

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23INVESTMENT CASE

INVESTMENT IN HUMAN TALENT

With over 70 years of experience, José de Mello Saúde governs its performance with values such as Respect for the Person’s Dignity and Well-being, Human Development, Competence and Innovation, which guide the incessant desire to be and do better;

It maintained a close relationship with the academic community through the Tagus Tank consortium, created with Universidade Nova de Lisboa;

It created research programmes in Medicine and launched a set of lectures on Biolaw, promoted by the Associação de Estudos do Biodireito (ABIO), which resulted from the partnership with Nova’s Law School; For the fourth consecutive year, it awarded five PhD Scholarships in Medicine, amounting to 100 thousand euros, to doctors in José de Mello Saúde’s units and who are enrolled in PhD programmes in Medical Schools.

VALUE-GENERATING GROWTH AGENDA

José de Mello Saúde is the largest player in the domestic healthcare sector, having a network with high geographical coverage;

CUF network continued to expand in 2017 with the opening of CUF S. João da Madeira Clinic and the acquisition of Clínica Particular de Coimbra, future CUF Coimbra Hospital; Progressed with the construction ofthe future CUF Tejo Hospital; Designed from scratch to fight and treat the Diseases of the Future, this unit represents an investment of over 100 million euros;

Works to ensure the adaptation of existing units to the different regions’ levels of demand (e.g., expansion of the CUF Descobertas Hospital).

INTEGRATED REPORT 2017BUSINESS MODEL 24


BUSINESS MODEL

José de Mello Saúde provides healthcare supported by over 70 years of experience, based on a model that enables differentiation, through major hospitals which include sub-specialities in reference and convenience areas, via a network of local hospitals and clinics.

To be a leader in distinctive quality healthcare provision, based on an integrated network of high performance units, both in private and public sector, and to present options for growth in selected international markets.

The performance of José de Mello Saúde is governed by values such as Respect for the Person’s Dignity and Well-being, Human Development and Competence and Innovation.

VISION

VALUES

Academic and Scientific Community

Industry Associations

Local communities

Payers Suppliers Employees

Efficient andConsistentOperation

Value-generatingGrowth Agenda

Investment on Human

Talent

Strategic Pillars

OUTPUTS

Generation of shareholder valueThe capture of synergies and a strong focus on an efficient management enabled obtaining dividends of €20.6M.

Promotion and training of professionals:The remuneration of professionals exceeded €357M;

133,314 hours of training, an average of 16.54 hours per employee, were carried out;

Employee satisfaction is high: 75% are happy to be working in the company, according to the annual satisfaction survey.

Outstanding quality of service:Consumer Choice in the Health & Well-being category;

Portuguese Most Trusted Brand;

Five-Star Award in the Private Hospitals category.

Benchmark environmental performance:Braga Hospital was honoured with the EDP Electricity and Environment Prize, which awards good practices in the fields of energy efficiency and environmental sustainability;

Renewal of the ISO 14001 Environmental Certification in Braga and Vila Franca de Xira Hospitals;

Reduction of CO2 emissions by 16.8% in comparison with 2016.

Contribution to knowledge generation:A total of 124 clinical trials were carried out and PhD scholarships in medicine amounting to 100,000 euros were awarded;

€1.8M were invested in Research, Development and Innovation;

485 Doctors carried out their medical internship in José de Mello Saúde’s units.Consórcio

Consortium with Universidade Nova de Lisboa that reconciles hospital practice with teaching and research.

Excellence of clinical services:Award of the EUSOMA certification of the CUF Oncology Institute;Renovada a Acreditação

Renewal of the Joint Commission International (JCI) Accreditation of Vila Franca de

Xira – Recognition of the CUF Infante Santo Hospital as a National Reference Centre for Cochlear Implants;

The Service Quality Management system of CUF Viseu Hospital was certified by SGS under the ISO 9001:2015 standard.

Shareholders

Portuguese Health Regulatory

Authority

Regional Health

Authorities

Funders

DifferentiatingClinical Project

FlawlessCustomer

Experience

Financial capitalManages the activity seeking to optimize efficiency in the management of financing and results.

INPUTS

Human capitalEnsures the promotion and recognition of its 8,058 employees, encouraging collaboration, competence and rigour.

Technological and manufactured capitalUses tangible and intangible technological resources to implement its activities, supported on its own real estate which includes 19 healthcare units, 1,165 consultation rooms, 92 operating theatres and 1,543 inpatient beds.

Social and relational capitalWorks with elements of the scientific and innovation ecosystems (start-ups and others), boosting its research, development and innovation activities to identify opportunities for differentiation.

Natural capitalPromotes the sustainable use of natural resources, namely energy and water, preventing pollution and promoting proper waste management.

Intellectual capitalDevelops education and training programmes with the goal of permanently updating its professionals and the scientific and medical community.

Uses management practices that generate efficiency, such as standardization in the use of consumables across healthcare units and the optimization of a billing alarm system.

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INTEGRATED REPORT 2017STRATEGY, ACHIEVEMENTS AND GOALS 25


STRATEGY, ACHIEVEMENTS AND GOALS FOR 2018

MATERIALIZED IN 2017

PLANNED FOR 2018

DIFFERENTIATING CLINICAL PROJECT

FLAWLESS CUSTOMER EXPERIENCE

EFFICIENT AND CONSISTENT OPERATION

VALUE-GENERATING GROWTH AGENDA

INVESTMENT IN HUMAN TALENT

Excellent clinical performance consistent across the network, with differentiated offer in CUF Hospitals.

High satisfaction indices across the network, maximising the focus on digital as a mean for convenience and effectiveness.

Creation of network synergies, reaching EBIT efficiency levels in line with the most efficient players of the market.

Consolidation of the leadership position in the Portuguese market, leveraging value-generating growth opportunities.

Reinforcement of the value proposition, attracting, creating and promoting excellent professionals.

EUSOMA Certification of the CUF Oncology Institute;

Recognition of CUF Infante Santo Hospital as a National Reference Centre for Cochlear Implants;

Increase in the number of pathologies with single protocol and systematic measurement of clinical outcomes;

Renewal of the Joint Commission International (JCI) Accreditation at Vila Franca de Xira Hospital;

ISO 9001:2015 certification of CUF Viseu Hospital and ISO 9001:2008 quality certification of CUF São João da Madeira Clinic, both obtained in their first year of activity.

Accreditation by the Joint Commission International (JCI) of CUF Porto Hospital;

Value-Based Healthcare: increase in the number of pathologies in measurement and implementation phase.

Preparation of the RGPD (Regulamento Geral sobre Proteção de Dados – General Regulation on Data Protection) audit;

(Award-winning) rationalization of the energy consumption in Braga Hospital;

Renewal of the ISO 14001 Environmental Certification in Braga and Vila Franca de Xira Hospitals.

Centralization of the Logistics Process;

Reorganization of the core systems in a single information system for the entire network, homogenizing procedures and processes;

Maintenance of the ISO 14001 Environmental Certification in Braga and Vila Franca de Xira Hospitals.

Opening of CUF S. João da Madeira Clinic;

Acquisition of Clínica Particular de Coimbra, future CUF Coimbra Hospital

Continuation of the expansion of CUF Descobertas Hospital;

It continued to build the future CUF Tejo Hospital;

Expansion of the CUF Almada Clinic;

Acquisition of land in Sintra for the construction of the future CUF Sintra Hospital (CUF Sintra Clinic);

Acquisition of land in Leiria for the construction of the future CUF Leiria Hospital;

Acquisition of the surface rights for Hospital Ortopédico José de Almeida, in Parede, Cascais.

Opening of CUF Descobertas Hospital’s new building;

Opening of the new CUF Sintra Hospital;

Opening of the new CUF Coimbra Hospital;It continued to build the future CUF Tejo Hospital;

Reinforcement of the interaction with the innovation ecosystem (start-ups and others) to capture differentiation opportunities.

1st Edition of the Management for Doctors course;

Creation of the Aging discipline in Nova Medical School, under Tagus Tank.

Creation of research programmes in Medicine;

Award of 100 thousand euros in medical PhD scholarships.

Launch of the group’s new Intranet portal, optimizing the means of communication and collaboration among teams and professionals.

Launch of version 2.0 of MyCUF, with more and better features;

“Consumer Choice” (Health & Well-being” category), “Five Stars” and “Trusted Brand” (Private Hospitals category) prizes.

Continuation of the focus on a growing digital relationship with the customer, leveraged on the My CUF App;

Reassignment of the consumer awards.

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INTEGRATED REPORT 201726 RESEARCH, DEVELOPMENT AND INNOVATION

Research, Development and Innovation (R&D+I) is as an essential asset in sustaining a competitive offer that exploits new solutions that generate differentiation and value for José de Mello Saúde’s customers and professionals.

Starting from the five strategic pillars of José de Mello Saúde, multiple activities are promoted to foster innovation (incremental, planned exploratory and scientific activity) and training (pre and post-graduate and clinical and educational events for health), the latter being carried out through the CUF Academy, José de Mello Saúde group’s company responsible for research, training and teaching in the group’s healthcare units and in other external entities that deal with it for this purpose.

Innovation, a mission shared by all: José de Mello Saúde’s investment in spreading a culture of innovation with its employees has been materializing since 2012 with the i9+ Programme, which enables any member of the organization to contribute ideas that improve the company’s activities or create products and/or processes. The proposals must fit within the company’s strategic pillars or respond to specific challenges launched each year. The best ideas are recognised at the annual i9 + Innovation Afterhours event, where the authors present an Elevator Pitch to the organization and to a jury that will choose the year’s three best ideas.

RESEARCH, DEVELOPMENT AND INNOVATION

Nº of ideas submitted

2014 101

2015 227

2016 274

2017 346

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27RESEARCH, DEVELOPMENT AND INNOVATION

Vila Franca de Xira Hospital initiated a project designed to monitor, in an articulated and integrated way, children with diabetes under hospital care, in primary healthcare and schools. The programme includes training and support actions for children and families, as well as training actions in the schools directed to professionals who accompany children with diabetes.

Digital access in permanent evolution: MyCUF service, created in 2013, enables an effective and convenient interaction between the customers and the administrative services of CUF. In a personal online area, accessible via Web or mobile (App), customers can safely access a set of features and information about their activity in the CUF units, including scheduling of appointments, receiving results of exams, consulting prescriptions and payments. In 2017, it became possible to carry out simultaneous appointments for several medical acts in the same day, identifying favourite doctors, knowing in real time the waiting times in 24-Hour Service of the several units and/or search on-duty pharmacies.

Promotion of entrepreneurship in the healthcare sector: In 2017, the Grow programme was launched. Operating across all subsidiaries of José de Mello Group, Grow focuses on the areas of Mobility, Health and Chemicals. Seeking to provide a selected set of start-ups with access to the Group’s knowledge, experience and infrastructure. Grow enables the development of joint pilot projects, as well as testing and adaptation of products and services in a real market environment.

In parallel, the creation of a Mentor Pool is useful to start-ups, providing them systematic monitoring by people with considerable experience and expertise in the areas of business management and/or other areas of expertise. Start-ups are chosen based on their ability to respond to challenges and priority areas for the development of the group’s organizations, considering the relevant strategic pillars.

In 2017, three questions were analysed: “how to meet the needs of the chronic patient?”, “how to increase customization in healthcare?” and “how to increase the efficiency of task management in the units?”. The winning idea proposed the creation of a “customer post-operative online channel”, which will enable direct communication between the post-operative patient and the surgical nursing post, supporting the patient during the recovery period. It will be implemented in 2018.

Continuous innovation in the units: Considering the specific day-to-day needs of each unit of José de Mello Saúde, countless innovation projects promoted directly by the clinical teams were materialised throughout the year. Of these, we highlight five projects launched in 2017:

An epilepsy surgery group was created in CUF Descobertas Hospital, covering the entire process in an integrated and multidisciplinary way, with advanced patient monitoring. Under inpatient care, the patient remains under constant supervision, with the brain’s electrical activity and behaviour being recorded continuously via high-definition video;

CUF Infante Santo Hospital has established a protocol of cooperation with Hemocircuitos, Lda., seeking the creation of a centre of excellence capable of implementing Extracorporeal Life Support (ECLS) in its multiple aspects. The centre will be able to transfer patients from other institutions who are candidates for ECLS techniques, with a response time of less than 12 hours, with referrals at country level. There are already two referral poles supporting ECLS within the NHS, with this third centre seeking to be an option in the private national health system;

Intensive online programmes were developed at CUF Porto Institute for cognitive training of patients with memory loss and other cognitive problems. These programmes, created in articulation with Neuroinova, will be complemented by in-person and group sessions, and contemplate the constant supervision of the patients by highly skilled professionals;

The latest ophthalmic technology to treat cataracts was established in CUF Porto Hospital, for the first time in Portugal. In Cataract Surgery with implantation of Trifocal lens, the eye lens is replaced by an intraocular lens that will correct all refractive errors, enabling since at three distances: close, medium and far.



Through Grow Health, the area of the programme focused onthe healthcare area, José de Mello Saúde surveyed 280 start-ups. The detailed analysis of 137 start-ups led to seven mentoring sessions and six pilot projects, with an emphasis on Nutrium and Sword, which developed pilots in some of José de Mello Saúde’s units. Nutrium developed software that simplifies everyday tasks of nutritionists. Complemented by a mobile application which supports and motivates the patients in the execution of their food plan, the software enables remote medical support. As for Sword Health, it created a solution that enables the autonomous execution of physiotherapy exercises, with support from a set of sensors placed on the area of the body that is in recovery and from a tablet that provides the exercise plan in real time. Nutrim’s project is framed by the Efficient and Consistent Operation strategic pillar and they both contribute to a Flawless Customer Experience.

Being a lever for the paradigm shift within the organization, Grow proves to be crucial to guide José de Mello Saúde’s innovation strategy according to current trends, opening the Group up to new domestic and foreign players. In addition, Grow reinforced José de Mello Saúde’s proximity with the start-up ecosystem, namely in the areas of health and well-being, through presence in multiple events of entrepreneurship and innovation (Health Cluster Portugal, Lisbon Investment Summit, Scale Up Porto, Web Summit, GIANT Health Event, for example) and of the academic community, namely via the initiatives promoted by Católica Lisbon School of Business and Economics, Instituto Superior Técnico, MIT Portugal and College of Science and Technology of Universidade Nova de Lisboa. In 2017, partnerships were also developed with Bright Pixel, Impact Hub and Microsoft, leading to the launch of challenges in acceleration programmes and hackathons.

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The number of medical students who interned units amounted to 2,084:

In terms of Postgraduate Training, José de Mello Saúde received 485 internal doctors, distributed as follows:

Continuous investment in training, research and development: José de Mello Saúde’s formative activity is centred in CUF Academy, created to value and reinforce the knowledge and skills of the Group’s healthcare professionals. Based on principles of thoroughness and ethics and in the highest standards of quality and knowledge, CUF Academy positions itself as a Centre of Reference in the healthcare sector and develops its activity with domestic and foreign players.

In partnership with the main universities, CUF Academy promotes training and scientific events seeking the permanent sharing, update and innovation of the medical and scientific community. Within the scope of Undergraduate Training, in 2017, José de Mello Saúde received 3,170 interns:

Professional Group

Medical Students

Internal of the common year

Especiality Interns

Other Interns

Total

922

0

14

0

14

1162

101

221

149

471

2084

101

235

149

485

CUF

CUF

PPP’S

PPP’S

Medical Students

Internal Doctors

Profissional Group

Medical Studentsand Doctors

9 313 322

Other Groups

Total

1 2Administrative

Ther. Diag. Tec

Ther. Health. Tec

Auxiliary

Nursing

Others

78 0

27 196

52 41

181 395

684 843

63 285

1095 2075

3

78

223

93

576

1527

348

3170

CUF PPP’S Number of Trainees




In terms of soft skills, José de Mello Saúde maintained a strong focus on the “Cuidar Mais” Movement, working on communication and empathy skills with all of their professional groups:

Throughout the year, around 17,000 people participated in the 378 events promoted by CUF Academy, including Clinical Events, More Knowledge Sessions and Education for Health Events.

Seeing the relationship with academic community and the scientific community as an essential means of generating and sharing knowledge, José de Mello Saúde has 39 partnerships with multiple R&D+I entities. Similarly, for the fourth consecutive year, five PhD scholarships amounting 100,000 euros were assigned, with this investment in research being the only one of its kind in Portugal.

Number of Events

Number of Events

Number of Events

Number of Events

Number of Participants




76

131

121

328

6028

0

3752

11809

24

0

26

50

2269

0

2753

5022

100

131

147

378

8 297

0

6505

16 831

CUF PPP’S TotalClinical Events

More Knowledge

Education for Health Events

Total

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José de Mello Saúde’s clinical trials started in 2011, having presented a gradual and sustained growth throughout the past seven years. The existence of a Central Legal Department and an Ethics Committee in each unit enables the Academic Research Core of CUF Academy to present very competitive approval periods.

26

32

8

7

71

104

24

2

97

136

32

9

Total CUF Total PPP’S Total

Clinical Trials

Clinical Trials

Observational Studies

Observational Studies

Ongoing

Feasibility

Welcome to new Employees

Integration

Cuidar + | FOCUS

Cuidar + | Train the Trainers (Doctors and Nurses)

Cuidar + | Líder Care

Other (Triagem Manchester e Peri-operatório)

Total

474

307

42

68

3318

349

677

16

0

0

14

2637

823

2441

323

216

42

82

5955

CUF PPP’S Nº de Colaboradores JMS

1764

216

Gazeta Médica: 4 editions

Book “Angiology and Vascular Surgery”by Dr. Armando Mansilha

Indexing Process in SCIELOand DOAJ

Funded by the Active and Assisted Living (AAL) Programme, Clockwork aims to create a support system and to improve the living conditions of the shift workers. Using mobile devices, sensors and intelligent lighting systems, the project seeks to gather parameters of the daily and professional life of its workers, proposing adjustments in lighting and supporting their reflection and self-awareness. The project also has a second Portuguese partner, Fraunhofer Portugal, and partners from Spain, Italy and Hungary.

20 since 2014

97 in progress

32 observational studies in progress

SCIENTIFIC PUBLICATIONS

I&DCONSORTIA

DOCTORALSCHOLARSHIPS

CLINICALTRIALS



INTEGRATED REPORT 201732 RISK MANAGEMENT, MAIN RISKS AND UNCERTAINTIES

José de Mello Saúde’s risk management policy is based on the International COSO (Committee of Sponsoring Organisations of the Treadway Commission) methodology. Clinical risk, specific to the healthcare activity, is added to the four categories defined in the methodology. Through this policy, an integrated and effective risk management strategy is established, ensuring the recognition of the risks and opportunities associated with the organization’s operations.

The identification of the risks allows to develop actions that minimize the negative impacts of possible unfavourable factors underlying these risks in the financial structure and sustainability of José de Mello Saúde. The risk management policy also enables maximizing the effects of the identified opportunities.

By decision of the Board of Directors, the Audit and Risk Management Committee was established in February 2017.

A risk (re)assessment process is on-going and should be completed in 2018. Developed by the business areas, with the sponsorship of the Executive Committee, this exercise aims to: (i) update the risk matrix, (ii) identify and quantify possible impacts, and (iii) strengthen the explicit connection to mitigation strategies.

RISK MANAGEMENT, MAIN RISKS AND UNCERTAINTIES

External and Internal Context

EXTERNAL CONTEXT

INTERNAL CONTEXT

Public-private partnerships Competition Laws and Regulations

Healthcare ProvisionAdmission

Clinical

Liquidity, financingand interest rates

Information security andavailability of the

information systems

Innovation Revenue Recognition

Discharge

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33RISK MANAGEMENT, MAIN RISKS AND UNCERTAINTIES

Reference

1

3

5

2

4

Strategy

Operational

Compliance

Clinical

Financial

Risks associated with the decision-making process/strategic information

Risks associated with infrastructure and processes that support the operation

Risks associated with non-compliance with statutory, legal and fiscal regulations,citizenship, ethics, as well as with policies and procedures of José de Mello Saúde

Risks associated with the social assistance processes (all activities that competedirectly/indirectly for the clinical act)

Risks associated with the management of financial resources, balance sheet,financial/fiscal reporting, taxes and insurance

Category Description

Risk

The risk of non-compliance with legislative and regulatory changes applicable to José de Mello Saúde and/or internal policies can lead to losses, fines and reputational damages.

Innovation, especially in the healthcare market, dictates the organizations’ success. The inability to keep up with the pace of innovation may have negative impacts for José de Mello Saúde, both in terms of clinical quality and in terms of the portfolio of services provided.

There are several operational factors which may lead to excesses or deficits in terms of revenue recognition.

Monitoring by the Legal Department of legislative and regulatory changes and communication to the operational managers of the impacted areas, using external experts whenever necessary.

Strategies for relationship with stakeholders.

Supervision by the Executive Committee and by the Board of Directors

Establishment of the Department of innovation, integrated into the Planning and Management Control Department, seeking to:

Foster cross-cutting innovation;

Coordinate and implement strategic initiatives with impact in the short, medium and long term, seeking to create value for José de Mello Saúde and for the stakeholders.

Creation of the I9+ programme for the capture and implementation of innovative ideas. I9+ provides for the presentation of ideas by José de Mello Saúde’s employees on a dedicated platform. The ideas, whose feasibility will be evaluated, should be in line with the company’s strategic pillars;

Establishment of cooperation agreements with major Portuguese universities, especially in the areas of Medicine and Health Sciences, seeking to create value through synergy maximization.

Creation of the Grow Programme to support start-ups, with the purpose of reinforcing the connection to the innovation and entrepreneurship ecosystem, supporting and accelerating the development of innovative projects in the healthcare and well-being areas, through the access to unique knowledge, experience and infrastructure of José de Mello Saúde.

Establishment of the Business Assurance Department, currently integrated in the Operations Department, whose main objectives are: Monitoring of operations at the transaction level (use of alert software);

Assessment, design, and control over the implementation of billing and registration procedures, with the support of the Commercial Department which evaluates the suitable context for the contractual arrangements in effect with the responsible financial entities (insurers and subsystems), as well as other relevant impacts in the relationship with individuals.

1

5

1

2

3

3

Description Mitigation strategies Category

Legal and Regulatory

Innovation

Recognition of revenue



Risk

The provision of healthcare services, in accordance with the best practices, technological excellence, and the latest and proven scientific developments in the prevention, diagnosis and treatment of the disease have an increasingly greater level of complexity and therefore a greater risk of causing damage. Damage whose clinical result deviates from the plan, and may prolong hospitalization and temporarily or permanently affect the patient’s functional state.

In hospitals, the risk of worsening sickness, including the risk of cardiorespiratory arrest is real, both for hospitalised patients and for those in outpatient care. An immediate start of basic life support and, when indicated, defibrillation upon detection of a cardiorespiratory arrest, significantly decrease the risk of associated morbidity and mortality.

Infections associated with healthcare are a risk present in the activity to which the utmost vigilance is given in order to provide proper prevention and treatment.

The possibility of critical situations such as epidemics, disasters and accidents with multiple victims are risks sized according to the type, characteristics and location of each unit.

Constitution of the Safety in Health Programme;

Consolidation of the implementation of the national programme for patient safety 2015-2020;

Evaluation of the culture of patient safety in the hospitals according to regulation 025/2013 DGS;

Promotion of the notification system for adverse events;

Adjustment of processes based on near-incidents;

Analysis of root causes for adverse events with damages;

Risk assessment of major processes (HFMEA – Failure Mode and Effect Analysis);

Monitoring of clinical indicators of process and outcomes;

Morbidity and mortality meetings;

Implementation of the early warning scale for adults and children;

Training of all employees in basic life support;

Internal emergency team trained in adult and paediatric advanced life support that ensures defibrillation in 3-5 minutes after collapse, both in inpatient and in outpatient contexts, including not only for the patients but also for people accompanying them, visitors and employees.

Establishment of the Local Coordination Groups of the National Infection and Antimicrobial Resistance Prevention and Control Programme;

Epidemiological surveillance;

Monitoring of the basic precautions regarding infection control and of the precautions based on the routes of transmission;

Implementation of the infection prevention bundles associated with medical devices;

Promotion of proper usage of antimicrobials.

Outbreak and epidemic management protocol;

Internal and external emergency plan;

Execution of simulacra;

Training of the teams.

2

Description Category

Clinical

Mitigation strategies


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Risk

The information and security of data are critical success factors. The risks, including cyberattacks, are related to improper access to information systems and the integrity and confidentiality of the data. The breach of information systems, as well as other factors, can lead to their unavailability, which may prevent their use and interrupt the normal course of operations.

José de Mello Saúde manages under PPP the Braga and Vila Franca de Xira Hospitals, whose contracts expire in 2019 and 2021, respectively. The renewal of these contracts depends on the will of third parties and of contractual conditions to be negotiated.

Inadequate management of treasury needs, impossibility of accessing external funding and exposure to variable interest rates may result in the failure to ensure the commitments entered into with third parties.

The pressure and uncertainty generated by competitors already in the market and by those that may appear with their own strategies to approach the market.

Access management controls;

Definition of development/change management processes; •

Monitoring of compliance with service level agreements signed with third parties;

Monitoring and supervision;

Project management teams with experience;

Implementation of the Business Continuity and Disaster Recovery policy.

Implementation of a programme for alignment to the General Data Protection Regulation

Development of a culture of clinical excellence, through the definition of the processes necessary to ensure the provision of top quality healthcare services;

Permanent monitoring by the management with a focus on maximising the efficiency of the operation;

Careful assessment of the impacts of the decision;

Strategies for relationship with stakeholders.

Permanent monitoring of treasury forecasts through active management of the business plan, which allows comprehensive mapping of the treasury needs and surpluses in the short, medium and long terms;

Permanent relationship with financial partners;

Selection of the strategies suitable for every business area in order to ensure that the exposure to variable interest rates does not affect negatively their respective operational capacity;

Use of financial derivative instruments to cover the risks of variation in interest rates;

Funding sources diversification.

Strategic planning;

Proactive monitoring of the market;

Development of a culture of clinical excellence, through the definition of the processes necessary to ensure the provision of top quality healthcare services;

Permanent monitoring of the operation with the goal of maximising its efficiency levels.

3

1

4

4

1

Description Mitigation strategies Category

Information security and availability of the information systems

Public-Private Partnerships

Liquidity, financing and interest rates

Competition




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37PERFORMANCE

Operational performance

Healthcare service provision indicators of José de Mello Saúde

Consultations 2.434,12.208,6 10,2%

Emergencies 658,2638,2 3,1%

Patients operated on

Days of hospitalisation

92,886,3 7,5%

Discharged patients

Births

75,273,8

470,0461,7

7,87,8

2,0%

1,8%

0,9%

20172016* Var %(thousands)

It does not include patients discharged from UCIPs*Pro-forma values based on the current activity accounting methodology

13Considers gross financial debt less cash and cash equivalents and other financial instruments

In 2017, José de Mello Saúde maintained a trajectory of sustained increase across its healthcare activity in the different fields of action. Over 2.4 million appointments were recorded (10.2% increase versus 2016), 92,800 surgeries (+7.5% year-over-year) andapproximately 75,200 patients discharged from hospitalisation (+2% more than in the previous year). There was also a slight increase in the number of births , which improved by 0.9% vis-à-vis the previous year.

CUFIn the private sector, JMS registered over 1.8 million appointments (increase of +12.6%), 52.9 thousand surgical patients (improvement of +10.4% year-on-year) and 36 thousand patients discharged from hospitalisation (+6.7% than in 2016) were recorded.

Public-Private PartnershipsIn the public sector, hospitals managed under public-private partnership, there were around 596 thousand appointments (+3.4% vis-à-vis 2016), 39.9 thousand surgical patients (+4.0% in comparison with 2016) and 39.2 thousand patients discharged from hospitalisation (-2.0% vis-à-vis 2016).

PERFORMANCE

Economic performance

Executive summaryThe 2017 financial year was characterised by a strong operating and financial performance, with an emphasis on the following facts:

Operating income was 637.7 million euros, an increase of 8.8% vis-à-vis 2016; in the private activity, we recorded an increase of 9.9% over the previous year, to 408 million euros. In the public sector, operating income was 227 million euros, growing 4.4% in comparison with the previous year;

EBITDA was 72.0 million euros, an increase of 5.3% versus 2016, driven by growth in the healthcare activity;

EBITDA on the private activity grew from 56.6 million euros to 60.9 million euros (+7.5%);

In the public sector, despite growth in operating income, EBITDA decreased by 1.5 million euros, to 7.8 million euros. EBITDA margin was 3.4%, a decrease of 0.8 pp;

Consolidated net profit was 22.8 million euros, a decrease of 1.1 million euros in comparison with 2016;

Total assets increased by 242.5 million euros (+48.2%) compared to the end of 2016, a consequence of the increase in tangible fixed assets (+188.6 million euros);

José de Mello Saúde’s consolidated investment was of 188.3 million euros;

On 31 December 2017, net financial debt stood at 338.6 million euros, resulting in a Net Debt to EBITDA ratio of 4.7x..


INTEGRATED REPORT 201738 PERFORMANCE

Consolidated results

Income Statement

Operating Income

EBITDAR

EBITDA**

EBIT

EBT

Net Profit

Net profit attributable to José de Mello Saúde shareholders

Operating Costs*

Margem EBITDAR

EBITDAR Margin

EBIT Margin

Depreciation and Provisions

Financial Results

Taxes

Net profit attributable to non-controlling interests

637,4

83,8

72,0

42,6

32,1

23,3

22,8

586,3

79,4

68,4

41,5

32,6

24,2

23,9

8,7%

5,6%

5,3%

2,5%

-1,7%

-3,8%

-4,6%

51,2

4,4

3,6

1,1

-0,5

-0,9

-1,1

(565,4)

13,2%

11,3%

6,7%

(29,4)

(10,5)

(8,8)

0,5

(517,9)

13,5%

11,7%

7,1%

(26,8)

(8,9)

(8,4)

0,3

-9,2%

-9,6%

-18,0%

-4,3%

67,1%

(47,5)

-0,4%

-0,4%

-0,4%

(2,6)

(1,6)

(0,4)

0,2

20172016 Var. %Var.(Million Euros)

*Total menos Amortizações e Provisões** Resultados Operacionais mais Amortizações e Provisões

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The operating income of José de Mello Saúde reached 637.7 million euros, increase of 8.8% versus the same period in 2016, following the strong performance across all areas of healthcare activity. Operating costs amounted to 565.7 million euros, 9.2% more than in the previous year, mainly due to the 10% increase in personnel costs and fees.

As a result of this growth in operating income, especially in the private sector, EBITDA and EBIT improved to 72 million euros (+5.3% compared to 2016) and 42.6 million euros (+2.5% compared to the previous year), respectively. However, there has been a reduction in EBITDA (-0.4 pp) and EBIT (-0.4 pp) margins’, since the increase of operating income did not yet compensate for the increase in the fixed costs structure, as a result of the opening of new units in the past two years (CUF Viseu Hospital and CUF Almada Clinic in 2016 and CUF São João da Madeira Clinic in 2017).

CUFIn the private sector, Operating income reached 408.1 million euros (+9.9% than in 2016), as a result ofgrowth acrossall healthcare activities, with an EBITDA of 60.9 million euros and EBITDA margin slightly decreasing by 0.3 pp, now standing at 14.9%.

Public-Private PartnershipsVila Franca de Xira Hospital maintained its positive operating performance, with a 1.6% growth in operating income vis-à-vis 2016. However, EBITDA decreased 1.4 million euros, as well asthe EBITDA margin, which was 7.4% in 2017 (-2.3 pp vis-à-vis 2016).

Operating income of Braga Hospital reached 161 million euros (+5.6% vis-à-vis 2016) whereas the EBITDA margin fell to 1.8% (-0.1 pp vis-à-vis 2016). 2017 was the second consecutive year in which Braga Hospital presented a negative result of around 4 million euros. This situation is driven by ARS North’s non-renewal of the vertical funding programmes for HIV and Multiple Sclerosis, with an approximate value of 7.5 million euros per year. A Request for Financial Recovery was cautiously lodged at the end of 2016 for the purposes of clause 127, paragraph 9, subparagraph (b) of the Management Contract, seeking the beginning of an arbitration process for the settlement of this dispute. We believe a favourable result for Escala Braga is very likely to come from this arbitration process, with our estimate of this contingent asset being 15 million euros.

Indicadores Assistenciais da José de Mello Saúde

Consolidated financial results (10,5)(8,9) -18,0%

Financial income 1,00,5 83,2%

Income/costs for Financial Assets 0,70,7 10,7%

Financial Costs (12,2)(10,1) -20,9%

20172016* Var %(Million Euros)

As a reflection of the strong investment taken place during 2017, and the subsequent increase in financial costs, financial results were negative by 10.5 million euros (1.6 million increase versus 2016).

Thus, José de Mello Saúde’s net profit was 22.5 million euros, which represented an annual decrease of 1.4 million euros (-5.7%) in comparison with 2016.

PERFORMANCE



InvestmentThe total investment carried out in 2017 was €190.3 million. The most relevant investment amounted to €142 million and was due to the acquisition of real estate operated by José de Mello Saúde, belonging to the ImoSaúde Closed Real Estate Investment Fund and to the ImoSocial Closed Real Estate Investment Fund. In addition, 7.6 million euros were invested in the acquisition of four companies that provide healthcare in the regions of Almada, São João da Madeira and Coimbra, and in another company holding a property in the region of Sintra.

The expansion investment, both organic, with the expansion works in CUF Descobertas Hospital, CUF Torres Vedras Hospital and CUF Santarém Hospital, and geographical, with the opening of CUF Almada Clinic and with the construction of CUF Tejo Hospital, totalled 27.9 million euros.

Recurrent investment, mostly for technological replacement and update, reached €12.9 million (+0.9 million euros than in 2016).

Financial Situation

Fixed Assets

Current Assets

Total Assets

452.5

292,9

745,4

43,9

14,2

13,4

122,9

378,4

3,3

16,7

0,2

47,7

0,8

35,3

8,3

52,7

3,8

3,7

252,5

250,4

502,9

33,4

11,3

12,9

95,4

189,8

5,1

13,5

0,2

16,1

0,5

48,7

8,3

60,4

4,3

3,2

200,0

42,5

242,5

10,5

3,0

0,5

27,5

188,6

-1,8

3,2

0,1

31,6

0,3

-13,3

0,0

-7,7

-0,5

0,6

20172016 Var. %(Million Euros)

Goodwill

Stocks

Intangible

Clients

Tangible

Other Debtors and Creditors

State

Other investments

Other Financial Instruments

Deferred Tax Assets

Investments in Subsidiaries

Cash and Cash Equivalents

Other MLP Assets

Other Current and Non-current Assets

Assets Held for Sale

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Total Liabilities

Equity

Financial Liabilities

92,4

653,0

53,0

26,5

22,8

-14,1

4,2

421,6

351,6

70,0

81,7

421,2

53,0

12,2

23,9

-11,4

4,0

219,6

150,0

69,6

10,8

231,8

0,0

14,3

-1,1

-2,7

0,3

202,0

201,6

0,4

20172016 Var. %(Million Euros)

Capital + Additional Payments

Retained Earnings + Reserves

Net Profit

Interim Dividends

Leasing

Minority Interests

Loans

Non-Financial Liabilities

Liabilities + Equity

231,4

745,4

1,4

12,3

94,5

10,8

22,0

11,7

78,7

201,6

502,9

1,5

14,0

87,5

8,5

19,3

2,9

67,9

29,8

242,5

-0,1

-1,8

7,0

2,3

2,7

8,9

10,8

Pension fund

Provisions

Suppliers

Other debtors and creditors

Deferred Liabilities

State

Accruals and Deferrals (liabilities)

Total assets increased 242.5 million euros (+48.2%) in comparison with the end of 2016, reaching 745.4 million euros. This variation was largely due to the increase in tangible fixed assets (+188.6 million euros), on the back ofthe various expansion works and the acquisition of properties belonging to the ImoSaúde Closed Real Estate Investment Fund and to the ImoSocial Closed Real Estate Investment Fund, namely the buildings operated by CUF Porto Hospital, CUF Porto Institute, CUF Belém Clinic, CUF Cascais Hospital and CUF Torres Vedras Hospital.

The decision to acquire the buildings was taken in a context of opportunity and anticipation:

These are strategic properties for José de Mello Saúde, making their control a relevant factor;

The funds holding the properties entered into liquidation;

The maintenance of interest rates at all-time lows enabled the contracting of funding at competitive conditions, which allowed for relevant cost savings (amortisations and financial charges versus the previously contracted rents) and in cash flows (financial charges and debt service vis-à-vis the previously contracted rents);

The mandatory application of IFRS 16 in January 2019 also implies the recognition of the operating leases in the balance sheet, recording the right of use in assets and the underlying responsibilities in liabilities. With the acquisition of the properties, it was possible to anticipate what would be the balance structure from 2019 onwards.

PERFORMANCE



Financial Sustainability

Financial debt profile of José de Mello Saúde

Others

CP

Financial Leasing

MLP

Bonds

Bonds

Others

CP

MLP

Financial Leasing

2,1%

10,9%

31,6%

10,0%

45,4%

35,6%

0,2%

11,5%

36,1%

16,6%

2016 2017

José de Mello Saúde closed 2017 with an equity increase of around 10.0 million euros, from 2016, to 91.6 million euros. On 31 December 2017, net financial debt stood at 338.4 million euros, 183.5 million more than at the end of the previous year, reflecting the investment carried out throughout the year.

In 2017, José de Mello Saúde maintained the focus on maintaining a sustainable financial policy and solid capital structure, in line with its growth strategy, as one of its strategic goals. This policy has undergone active management of its debt profile in recent years both in terms of source diversification as well asextension of its maturity profile.

As a result, José de Mello Saúde has been able to access diverse funding sources, having finished 2017 with a similar weight of bank funding (MLP) and bond loans raised in the capital market in the mix of its gross financial debt.


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421,6

338,6

4,08

2,77%

219,6

154,9

3,04

3,18%

20172016(Million euros)

Gross financial debt

Net financial debt*

Average maturity of debt (years)**

Average spread

*Considers gross financial debt less cash and cash equivalents and other financial instruments **Excluding leasing


In 2017, José de Mello Saúde was once again able to reduce its average cost of funding as well as extend its average maturity.

Despitehaving presented a robust operational and financial activity in 2017, the performance of JMS’ financial ratios translates the strong investment effort in the multiple expansion works in course across the network and on the acquisition of relevant real estate assets during the year. For those reasons, and even considering the increase of EBITDA, there is a growth of the Net Debt/EBITDA ratio to 4.7x. José de Mello Saúde has included a financial covenant of Net Debt/EBITDA ratio below 6x in all its bond transactions placed in the financial markets. On 31 December 2017, José de Mello Saúde, S.A. complied with the financial covenants defined in all bond loans.

Main Financial Ratios

12,4%

14,2%

4,7

3,5

16,2%

19,4%

2,3

4,1

-23,7%

-27,0%

107,5%

-15,2%

20172016 Var. %

Financial Autonomy

Solvency

Net Financial Debt1 /EBITDA

EBIT/ Financial Charges

PERFORMANCE



/

Clinical performance

Clinical QualityOrganised around an integrated network of high-performance units, grouped into large hospitals with subspecialties in reference areas, and a network of local clinics and hospitals that focus on the users’ convenience, José de Mello Saúde presents a differentiated clinical project.

On a continuous basis, José de Mello Saúde evaluates the healthcare provided in its units, submitting them to the external assessment of the National Health Evaluation System (SINAS), which acknowledges the fulfilment of the quality parameters established by the Portuguese Healthcare Regulation Authority (ERS) (Entidade Reguladora da Saúde – ERS). Through clinical benchmarking models, the clinical efficiency and quality processes are identified and evaluated, which is translated into learning for the organisations involved.

The Clinical Outcomes project, launched by José de Mello Saúde in 2015,which allows emphasising the provision of healthcare based on relevant results for the patient, evolved in 2017, to the Value-Based Healthcare Programme.

Value in Healthcare – Value-Based Healthcare Programme In order to implement a clinical management model based on the creation of value in healthcare, and assuming a strategic role for the organisation, the Value-Based Healthcare Programme assumes the involvement of multidisciplinary teams that define and implement the standard sets and analyse in an integrated way the clinical and management information. The presence of multidisciplinary teams in the measurement of outcomes enables the transversal reorganisation ofhealthcare based on pathologies, reinforcing a patient-centered viewand its clinical pathway and allows for progressively more informed decisions of doctors and patients.

In 2017, and in partnership with The International Consortium for Health Outcomes Measurement (ICHOM), José de Mello Saúde consolidated the processes of monitoring clinical outcomes in cataracts, breast cancer and knee osteoarthritis. The monitoring of these pathologies occurred at the CUF Descobertas

Hospital in 2016 and 2017, with the measurement of the value of cataract disease being extended to the CUF Infante Santo and CUF Cascais hospitals. In addition to the collection of clinical information, it was chosen tocollectinformation reported by the patient based on validated measurement tools (PROMs – Patient Reported Outcome Measures).

The internal validation of the measurement of outcomes for cataract surgery was accompanied by the international approval of the results through the ICHOM-GLOBE International Benchmarking. The first ICHOM preliminary reports confirm the clinical management model of José de Mello Saúde, since they place the group in the category of excellence in healthcare provision worldwide, with a star rating, by the quality of results, in four of the six dimensions evaluated by the programme.

Clinical Quality ManagementIn 2017, CUF Santarém and CUF Viseu hospitals received the ISO 9001:2015 certification, given by the SGS, for the first time, thus following the continuous and updated development of the culture and practice of José de Mello Saúde’s values. In addition, all CUF units successfully renewed the certification of their quality management systems in ISO 9001:2008.

Braga Hospital was accredited again and received the ISO 9001:2015 certification for all support services. At the same time, the maintenance of the Environmental Certification was confirmed (the

Star rating according to results above expectations in four of the six evaluated dimensions

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Certification was renewed and transitioned to ISO 14001:2015), as was the Organisational Health and Safety Certification (renewal of the certification according to the OHSAS 18001:2007 standard by the Société Générale de Surveillance (SGS)).

The Vila Franca de Xira Hospital, in 2017, after an annual reassessment, had its accreditation from the Joint Commission International (JCI) renewed. The Environmental Certification, according to the ISO 14001:2015 standard, the Certification of the Organisational Health and Safety System according to the OHSAS 18001:2007 and the certification of the Quality Management System in clinical and support services, according to ISO 9001:2015, were also confirmed.

National Health Evaluation System (SINAS)José de Mello Saúde reaffirms its commitment to the National Health Evaluation System (SINAS) which, through adequate and intelligible information, favours more informed decision-making by patients, while promoting the continuous improvement of the quality of provided care.

All of José de Mello Saúde’s units receive the maximum rating and were given a star in the quality dimensions of the first level of evaluation.

In the evaluation of Clinical Excellence, Braga Hospital and Vila Franca de Xira Hospital were once again considered by the Portuguese Health Regulatory Authority as leaders in their peer groups for the benchmark of the Portuguese National Health Service hospitals. The former received the maximum rating for Clinical Excellence in five areas (Neurology, Obstetrics, Intensive Care, Outpatient Surgery and Venous Thromboembolism). As for Vila Franca de Xira Hospital, it received the highest rating in four areas (Neurology, Obstetrics, Orthopaedics – Surgical Correction of Proximal Fracture of the Femur – and Outpatient Surgery. Additional emphasis on the high rating for the area of Outpatient Surgery at the CUF Porto Hospital, CUF Cascais Hospital and CUF Torres Vedras Hospital, as well as for the area of Orthopaedics (Hip and Knee Replacement) of CUF Descobertas Hospital.

ClinicalExcellence

Patient Safety

Comfortof Facilities

UserSatisfaction

User FocusHospital

CUF Descobertas Hospital

CUF Torres Vedras Hospital

CUF Infante Santo Hospital

CUF Santarém Hospital

CUF Porto Hospital

CUF Viseu Hospital

CUF Cascais Hospital

Braga Hospital

Vila Franca de Xira Hospital

The provider meets all quality parameters required.Dimension not evaluated.

PERFORMANCE



Clinical Quality IndicatorsJosé de Mello Saúde’s units with inpatient care and outpatient surgery are involved in benchmarking models, making it possible to evaluate and compare the performances of these units in variables such as clinical efficiency and quality.

By participating in the IAmetrics, which enables monitoring of results via models which adjust to the complexity of the cases and the execution of benchmarking with equivalent hospitals in Portugal and Spain, allows José de Mello Saúde to achieve greater efficiency and quality in the provision of healthcare. The performance assessment system is based on the comparison of performance with standard values (indexed to risk), in which a better performance will have values between 0 and 1.

Patient SafetyPatient Safety is a strategic priority for José de Mello Saúde, which thus establishes its commitment to a differentiating clinical project, materialised in the clinical excellence and in the response focused on the patient.

The Safety in Health Programme, which is transversal to all of José de Mello Saúde’s units, is guaranteed by multidisciplinary teams representing the risk management committees and the programme for the prevention and control of infections and resistance to antimicrobials. Operating under medical coordination, the programme aims to establish common policies and lines of action, ensuring the continuous improvement cycle and reinforcing the single-operator model.

The 2015-2020 National Plan for Patient Safety, created by Decree No. 1400-A/2015, of 10 February 2015, includes the activities carried out by José de Mello Saúde under the Safety in Health Programme and its respective goals.

Adverse Event Reporting System The World Health Organisation and the European Commission recommend to Governments the development of notification systems for safety incidents that promote learning from errors and the subsequent implementation of improvement actions. An Adverse Event Report System (HER+, Health Event Risk Management) is implemented across José de Mello Saúde with the support of top management, which reinforced the organisation’s learning process with incidents at the expense of the identification of their auditing, consolidating a non-punitive culture, crucial to reinforcing the safety of the patients.

Efficiency indicators

Quality indicators

AAPDI

RAMI

RACI

RARI

0.17In process consolidation in 2017, stemming from the transition from the ICD-9 to the ICD-10 coding reference

0.60

0.69

0.48

CUF Units PPP Units

Caption:Standard = 1.0 | Risk adjustment: Adjusted calculation of the likelihood of a given event occurring based on patient characteristics, type of admission, pathology and Healthcare Unit. Values resulting from the average between units.

AAPDI: Adjusted Average Pre-operative Delay Index Adjusted (programmed + urgent) | RAMI: Risk-adjusted Mortality Index | RACI: Risk-adjusted Complication Index | RARI: Risk-adjusted Readmission Index.

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Recording a relevant volume of notifications, the management of the HER+ platform has contributed significantly to collect, aggregate and analyse clinical information with a focus on the risks, hazards and vulnerabilities of the patients. The findings of this analysis and the undertaken corrective measures are reported to the notifier for the cause which motivated the incident to not happen again.

CUF Oncology Institute (I.C.O.)The CUF Oncology Institute (I.C.O.), CUF’s national cancer care network, ensures an integrated offer, a differentiated and experienced clinical staff, and an innovative technological complex prepared to respond to all needs presented by the cancer patient, from diagnosis to treatment.

Maintaining the focus on external quality recognition by certification and accreditation systems specific to the approach to cancer, I.C.O. saw the Breast Integrated Diagnostics and Treatment Unit be certified, in 2017, by EUSOMA a reference in Breast cancer. This certification recognises the clinical excellence and the safety in the diagnosis and treatment of patients, confirming full compliance with strict guidelines in services provided to patients, in the entire organisation and in the experience and structuring of multidisciplinary teams. I.C.O. wasalso recognised by the Ministry of Health as a National Reference Centre for the Treatment of Rectal Cancer.

2015 1456

11932016

2017

Total Reported Events - JMS Evolutionary Analysis

1246

CUF PPP

PERFORMANCE



As a national platform that brings together all CUF’s units, the CUF Oncology Institute articulates all necessary network’s resources – professionals, equipment and facilities – in a care model centered by pathology. I.C.O.’s network consists of 15 diagnostics and treatment units (IDTU), including breast, lung, colorectal, prostate, gynaecology, head and neck IDTUs, among others. I.C.O. maintains a strong commitment of cooperation with the National Cancer Registry, thus contributing to the epidemiological study of cancer in Portugal and continuously evaluating and monitoring the survival rates of patients treated entirely by the I.C.O.

Aware of the role it plays in the country, José de Mello Saúde is structuring a Corporate Citizenship Programme. In line with the principles of Social Responsibility, this will be a public statement of its social, economic and environmental commitment. With implementation planned for 2018, the Corporate Citizenship Programme will be materialised at a time of expansion of the organization and opening to new challenges and a new dimension of intervention.

Also in this context, José de Mello Saúde joined GRACE – Grupo de Reflexão e Apoio à Cidadania Empresarial (Group for Reflection and Support to Corporate Citizenship), being represented in the current board and participating in the mission to reflect, promote and develop Corporate Social Responsibility in Portugal.

Throughout the year, José de Mello Saúde promotes and cooperates with local development, maintaining an ethical and transparent relationship with its different audiences through a set of initiatives that include:

The Education for Health Programme, dedicated to the communities of the geographies in which there are José de Mello Saúde hospitals – with an emphasis on schools, public bodies and social welfare institutions, with which there is a close relationship – made it possible to raise the awareness of over 6,505 people in 2017. Our healthcare professionals carried out 146 training actions in several topics of prevention. Within the many initiatives carried

out, we highlight the training in Basic Life Support (BLS) provided to 215 students from schools in Viseu. Affected by the dramatic consequences of the fires that devastated the centre of the country in October 2017, namely in the region of Viseu, José de Mello Saúde created a bank account with 100 thousand euros to support the affected populations. In addition to the monetary contribution, CUF Viseu Hospital provided free care to the population affected during the period of the fires.

Under the partnership between José de Mello Saúde and Instituto Marquês de Valle Flôr (IMVF) for the “Health for All” programme, CUF regularly sends, since 2009, healthcare professionals to São Tomé e Príncipe, who provide care to the populations. In

Social Performance

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recruits employees who become volunteers in social welfare institutions with whom partnerships exist for this purpose: Associação Coração Amarelo (Lisbon and Porto Cores), ATL da Galiza, Community Centre and Parish of Carcavelos, Movimento Defesa da Vida, Obra do Frei Gil, Junior Achievement Portugal and, more recently, Refood, Associação dos Albergues Noturnos do Porto and Bebés de S. João. The Volunteer Programme is managed by a Steering Committee, composed of representatives from each of José de Mello Group’s business platform, joined by a member of José de Mello family and a representative from Amélia de Mello Foundation. In September 2017, the event Caring is Sharing, which brought together all the employees of the corporate centre and shared services for a volunteer action in Alcobaça, which allowed to raise four metric tons of apples for the users of Leiria’s Food Bank.

In 2017, Vila Franca de Xira Hospital joined the agents in charge of the Social Action of the five municipalities it serves to identify the institution most in need of an intervention. The chosen institution was Residência da CERCI Flor da Vida, which promotes the adaptation and integration of people with disabilities into society.

the field of otolaryngology, for example, CUF Infante Santo Hospital has been providing teams of doctors, technicians, nurses, audiologists and therapists since 2011, who operatebetween 20 to 30 patients per mission and carry out an average of 100 to 150 appointments. In 24 missions, over 1,000 screenings and over 500 surgeries were carried out. The teams from CUF Infante Santo Hospital also developed special programmes for deaf children, namely for their social integration, as well as sign language programmes.

In addition to the presence in the archipelago on missions, the team from the Dermatology Centre of CUF Descobertas Hospital, a pioneer on this programme, promotes in-person training events with doctors from São Tomé in Lisbon, as well as remote training. The Centre of Orthopaedics and Traumatology of CUF Descobertas Hospital also carries out annual missions since 2009, with the next one scheduled for March 2018.

José de Mello Saúde’s employees also integrate the Volunteer Programme of the José de Mello Group, which aims to transfer the Group’s knowledge and skills to the supported institutions. The programme

PERFORMANCE



The living and dining rooms of the institutionwere recovered, a new kitchen was offered and the façade was renovated.For the fourth consecutive year, CUF supported financially and was a partner in disseminating the Health Marathon, an initiative dedicated to funding scientific research in Portugal. In 2017, the Health Marathon supported the fight against cardiovascular diseases, having raised around 50 thousand euros for research in this area.

Projeto Ser Solidário (Be Supportive Project), transversal to the José de Mello Group, in which each employee voluntarily contributes with a minimum of one euro per month of their salary, allowed to support Comunidade Vida e Paz (Life and Peace Community), Lar S. José Home and the Raríssimas Association.

The actions of internal social responsibility allowed to distribute benefits of around 155 thousand euros among the employees and their families. Among the developed actions, we highlight the Holiday Camps for children between 7 and 18 years old, the award of school books scholarships – 511 grants, amounting to 72 thousand euros, to co-finance expenses in school supplies. For the Holiday Camps, developed to occupy the time of the employees’ children during the summer holidays, José de Mello Saúde gave around 60 thousand euros, supporting the accommodation, food, insurance and transport of 162 children. In celebration of the Christmas season, José de Mello Saúde distributed 2,333 Christmas Baskets to employees with the lower salaries, an initiative worth 71 thousand euros.

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Environmental Performance

José de Mello Saúde acknowledges the importance of environmental protection to business sustainability and believes that its benefits are clear for current and future generations. Although the provision of healthcare presents a reduced consumption of natural resources and raw materials, José de Mello Saúde seeks to minimise the environmental impact associated with its activity, regularly controlling the sources of environmental degradation in its units. In 2017, José de Mello Saúde maintained its growth trajectory, expanding its installed area by 1,606 m2, with the inauguration of the CUF São João da Madeira Clinic, and registering an increase in activity in all units, which had animpact on the consumption of utilities and the production of waste. However, the increase in production(the days of hospitalisation grew by 2% and the appointments/month indicator rose 10% in total, and 13% in the private units), was once again not reflected in the group’s energy consumption. As a result of the effort for energy rationalisation, there was a 5.5% reduction of consumptions in the analysed units for similar periods of operation.

José de Mello Saúde systematically monitors the consumptions of energy, water and hospital waste for each of its units. This evaluation is performed via comparison metrics for the consumption between units, in part equal to those used by the Ministry of Health in the ECO.AP project of the Energy Agency.

In 2017, José de Mello Saúde maintained the ISO 14001 Environmental Certification of Vila Franca de Xira Hospital and of Braga Hospital. The latter was also honoured for its Eco-Efficiency Project in the 10th edition of the EDP Electrical Energy and Environment Award, with the “Absolute Winner – Services and Other Activities” prize, which honours the Portuguese companies with best practices in the field of electrical efficiency and environmental sustainability. The measures implemented in Braga Hospital in the last four years have already reduced energy consumption by over 26%, which also represents a saving of emissions and costin the largest unit managed by José de Mello Saúde.

The experience gained in the current energy efficiency projects will be predominantly used to ensure the best possible performance in José de Mello Saúde’s new units, expected to open in 2018-2019.

PERFORMANCE



02CORPORATE GOVERNANCE

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53GOVERNANCE MODEL

GOVERNANCE MODEL

José de Mello Saúde is composed of a set of companies and complementary groups of companies (Agrupamentos Complementares de Empresas – ACE) that operate in the healthcare area.

Headed by José de Mello Saúde, S.A., which holds shares in the companies that manage and operate each of the operating, hospital and outpatient units, and shares in other companies that develop ancillary activities, the governance model of José de Mello Saúde Group follows a matrix logic.

José de Mello Saúde S.A. takes on the definition of the strategy and the social, economic and financial planning, and the coordination of the management of the ACE and subsidiary companies, through binding instructions and/or through the exercise of its shareholder rights.The Board of Directors is responsible for managing José de Mello Saúde, delegating the day-to-day management of the company to an Executive Committee. This is assisted by the corporate and shared-services departments and by a set of advisory bodies in their corresponding fields of expertise.

The subsidiary companies are, in turn and in corporate terms, managed by their corresponding Boards of Directors, with members of José de Mello Saúde’s Executive Committee, which, depending on the nature and size of the company, delegate day-to-day management to an Executive Committee or a Managing Director.

From an organisational perspective, the hospital and outpatient units were grouped into two Coordinating Committees: CUF and PPP. The CUF network is divided into three geographical clusters – Descobertas, Tejo and Norte – in a rationale of coordination around the three large CUF Hospitals, which are managed by Executive Committees made up of a CEO, an Assistant Director and an Operating Director.

The establishment of the Coordinating committees for CUF and PPP aims to implement a single-operator model in strategic alignment, standardisation, operational control and risk management, reinforced in 2017 by the creation of CUF Services, which includes the Customer, Logistics and Operations areas.


INTEGRATED REPORT 201754 GOVERNANCE MODEL

INFRASTRUCTURE PROJECT TRACKING COMMITTEE

AUDITING AND RISK MANAGEMENT COMMITTEE

ETHICS COUNCIL

ADVISORY COUNCIL

MEDICAL COUNCIL

SUPERVISORY BOARD

Executive Committee

Board of Directors

GENERAL MEETING

STATUTORY AUDITOR

REMUNERATION COMMITTEE

COMPANY SECRETARY

NURSING COUNCIL

PHARMACY COMMITTEE

Customer Ombudsperson

Corporate Centre CUF PPP’s Participadas

Internal AuditAdministrative and Occupational AccidentsCommercialProcurementCommunication and SustainabilityPharmacyFinancialInfrastructuresLegalStrategic Marketing and Brand ManagementOrganization, Quality and SafetyStrategic Planning, Management and Innovation Control DepartmentHuman ResourcesInformation Systems

CUF DescobertasCUF TejoCUF NorteCUF of Oncology InstituteCUF Services

Braga HospitalVila Franca de Xira Hospital

SAGIESImoHealthInfraHealthDigiHealthAcademia CUFLoja Saúde CUF

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MAKE-UP AND POWERS OF THE GOVERNING AND SUPERVISORY BODIES

BOARD OF DIRECTORS

Salvador de MelloChairman of the Board of Directors and CEO

Chairman of the Board of Directors and CEO of José de Mello Saúde (since 2001) and member of the Board of Directors of José de Mello Capital, (he is responsible), is responsible for the strong growth momentum and expansion of the network to its current 19 healthcare units. Salvador de Mello holds a degree in Economics and Business Administration from the University of Neuchâtel, Switzerland.

Pedro de MelloDeputy Chairman of the Board of Directors

Pedro de Mello holds a degree in Textile Engineering and he is also Vice-President of José de Mello Capital, member of the Board of Directors of CUF Consultoria and Services and Chairman of the Board of Directors of MGI Capital.

João Gonçalves da SilveiraDeputy Chairman of the Board of Directors

Deputy Chairman of the Board of Directors of José de Mello Saúde since 2001, João Gonçalves da Silveira holds a degree in Pharmacy from Universidade de Lisboa, Chairman of the Board of MONAF (Montepio Nacional da Farmácia).



INTEGRATED REPORT 201756 MAKE-UP AND POWERS OF THE GOVERNING AND SUPERVISORY BODIES

Rui DinizDeputy Chairman of the Executive Committee

Deputy Chairman of the Executive Committee of José de Mello Saúde, Rui Diniz holds a degree in Economics from Universidade Católica de Lisboa. He is also an Executive Director of José de Mello, SGPS.

Rui Assoeira RaposoExecutive Director

Rui Assoreira Raposo holds a degree in Pharmacy from Universidade do Porto; he is a Specialist in Pharmacy Industry by the Portuguese Pharmacists’ Association and a Postgraduate degree from IMD-Lausanne/Switzerland and from the AESE Business School – Lisbon/Portugal.

Guilherme MagalhãesExecutive Director

Holds a degree in Mechanical Engineering from Instituto Superior Técnico and an MBA from Universidade Nova de Lisboa; is also the Chairman of the Board of Trustees of Fundação do Gil.

Inácio BritoExecutive Director

Inácio Brito holds a degree in Economics from Universidade Católica de Lisboa, with postgraduate studies in Actuarial Sciences.

Vasco Luís de MelloExecutive Director

Vasco Luís de Mello holds a degree in Mechanical Engineering from the Catholic University of Leuven – Belgium, later obtaining a Master’s Degree in Business Administration from the same University.

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Paulo Cleto DuarteNon-Executive Director

Paulo Cleto Duarte holds a degree in Pharmaceutical Sciences from the Universityof Lisbon and an MBA in Information Management from Universidade CatólicaPortuguesa. He is Chairman of the Portuguese Association of Pharmacies andCEO of Farminveste, SGPS.

Luís Brito de GoesNon-Executive Director

With a degree in Law by Universidade Católica Portuguesa, Luís Brito de Goes he is also an Executive Director at José de Mello Capital, member of the Board of Diretors of Brisa and CUF Consulting and Services and President of the Board of Directors of MGI Capital.

Raúl Galamba de OliveiraNon-Executive Director

Raúl Galamba de Oliveira holds a degree in Mechanical Engineering from InstitutoSuperior Técnico, an MSc in Systems and an MBA from Nova School of Businessand Economics, is currently a senior partner at McKinsey in Portugal and Spain,and leads McKinsey’s Risk Management area.

Celine Abecassis-MoedasNon-Executive Director

Céline Abecassis-Moedas holds a PhD in Business Strategy, from ÉcolePolytechnique, Paris, a Master’s degree in Management, from École NormaleSupérieure and Université Paris Dauphine and a degree in Economics andManagement from the Sorbonne. She is an Associate Professor in the areas ofStrategy and Innovation at the Universidade Católica Portuguesa. Additionally,she is a member of the Board of Directors of CTT and Europac.

Vera Pires CoelhoNon-Executive Director

Vera Pires Coelho holds a degree and a master’s degree in Economics with anMBA from Universidade Nova de Lisboa and a postgraduate degree in ActuarialSciences from Catholic University of Lisbon; she is currently the ManagingDirector of the subsidiaries of Grupo Vendap in Angola, Mozambique and Brazil,Director of the Serralves Foundation and Deputy Chairman of the GeneralCouncil of Universidade Nova.




EXECUTIVE COMMITTEESalvador Maria Guimarães José de Mello (Presidente)Rui Alexandre Pires Diniz (Vice-Presidente)Rui Manuel Assoreira Raposo Vasco Luís José de Mello Inácio António da Ponte Metello de Almeida e BritoGuilherme Barata Pereira Dias de Magalhães

OFFICERS OF THE GENERAL MEETINGChairman:Vasco Vieira de Almeida

Secretary:João Vieira de Almeida

SUPERVISORY BOARDChairman:José Manuel Gonçalves de Morais Cabral

Members:José Luís Bonifácio Lopes João Filipe de Moura-Braz Corrêa da Silva

Deputy:Miguel Luís Cortês Pinto de Melo

STATUTORY AUDITORErnst & Young Audit & Associados – SROC, S.A., representada por Luís Miguel Gonçalves Rosado

REMUNERATION COMMITTEELuís Miguel Cortes Martins (Presidente)Pedro Norton de MatosMaria Luísa José de Mello Amaral CabralVasco Guimarães José de MelloPedro Maria Guimarães José de Mello

CORPORATE SECRETARYRui Manuel da Costa Ramalhal


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ETHICS COUNCILPaula Cristina Ruivo Duarte Martinho da Silva (Presidente)Maria Isabel Semedo Carmelo Rosa Renaud João Paulo Mouro Rosa Camilo MaltaNuno João Amador Silvestre CarlosRita Maria Lagos do Amaral CabralPresidente do Conselho de Enfermagem da José de Mello Saúde, Fátima FariaPresidente do Conselho Médico da José de Mello Saúde, João Carlos Lopes Simões Paço

ADVISORY COUNCILAntónio Manuel Bensabat Rendas (Presidente)António Manuel de Carvalho Ferreira VitorinoAntónio Bernardo Aranha da Gama Lobo XavierPaulo Jorge Cleto DuarteSalvador Maria Guimarães José de MelloRui Alexandre Pires Diniz

INFRASTRUCTURE PROJECT TRACKING COMMITTEEVera Margarida Alves Pires Coelho (Presidente)Pedro Maria Guimarães José de MelloRui Manuel Assoreira Raposo

AUDITING AND RISK MANAGEMENT COMMITTEERaúl Catarino Galamba de Oliveira (Presidente)Paulo Jorge Cleto DuarteLuís Eduardo Brito Freixial de Goes

MEDICAL COUNCIL:João Paço, Diretor Clínico do Hospital CUF Infante Santo (Presidente)Piedade Sande Lemos, Diretora Clínica do Hospital CUF CascaisJorge Mineiro, Diretor Clínico do Hospital CUF DescobertasVitor Correia da Silva, Diretor Clínico do Hospital CUF PortoAlberto Bessa Peixoto, Diretor Clínico do Hospital de BragaCarlos Rabaçal, Diretor Clínico do Hospital Vila Franca de XiraEduardo Pegado, Diretor Clínico do Hospital CUF Torres VedrasJoaquim Pedroso da Costa, Diretor Clínico do Hospital CUF SantarémEduardo Jorge Mendes, Diretor Clínico do Hospital CUF ViseuJosé Fragata, Consultor Clínico da José de Mello SaúdeCláudia Simões, Diretora de Qualidade e Desenvolvimento Organizacional da José de Mello Saúde




NURSING COUNCIL:Fátima Faria - Hospital de Braga (Presidente)José Coelho - Hospital CUF Infante SantoCarlos Costa - Hospital CUF DescobertasHelena Valentim Abrantes – Hospital Vila Franca de XiraBenilde Folgado - Hospital CUF Torres VedrasSara Martins - Hospital CUF Porto e Instituto CUF PortoCélia Leitão - Hospital CUF CascaisHelena Conduto - Hospital CUF SantarémDuarte Mendonça - Hospital CUF Viseu

PHARMACY COMMITTEERui Manuel Assoreira Raposo (Presidente)Abel Rua - Hospital de BragaCarla Ferrer - Hospital Vila Franca de XiraIsabel Queirós - Compras José Neves Luisa Fontes - Hospital CUF DescobertasLuis CaldeiraMaria Teresa Aires Pereira - Paulo Bettencourt - Hospital CUF PortoRita Oliveira - Hospital CUF Ifante Santo

CUSTOMER OMBUDSPERSONJosé Carlos Lopes Martins


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POWERS OF THE GOVERNING BODIES:The functioning of the Board of Directors, the Executive Committee and the rules of conduct of its members are governed, in addition to the Law, the Statutes and the Code of Ethics of José de Mello Saúde, by their respective Regulations. The supervision of José de Mello Saúde is under the purview of a Supervisory Board and the Statutory Audit firm.

BOARD OF DIRECTORSThe Board of Directors is responsible for defining the strategy, the major policies and the social, economic and financial planning of José de Mello Saúde, ensuring their application in its subsidiary companies. To that extent, it is responsible, namely, to decide on:

The acquisition of real estate and movable goods, including equity interests, as well as to sell or encumber such property by any acts or contracts, even if they serve to establish real guarantees;

Budget approval, preparation of the balance sheet and financial statements of the accounting period and preparation of reports on José de Mello Saúde’s activities and economic situation, as well as the proposal for distribution of profits, to be submitted to the General Assembly;

Amicable or judicial settlement of questions regarding rights and interests of José de Mello Saúde;

Appointment of people, among thosewho do not belong to the governing bodies, of those who will be responsible for top-level executive management of all of José de Mello Saúde’s technical and administrative services the establishment of representatives for any other purposes;

Contracting of internal or external funding required by José de Mello Saúde in order to carry out its corporate purpose;

Decision on the issuance of bonds and/or other securities;

Preparation and approval of all regulations that detail the exercise of social rights, as well as those that concern practical aspects of the operation of the Board of Directors or of other bodies, such as regulations concerning the exercise of the right of information; vote by mail and the use of long-distance communication for participation in meetings, including the exercise of the right to vote.




EXECUTIVE COMMITTEEThe Executive Committee assumes a set of responsibilities, delegated by the Board of Directors, from which stand out the following:

Proceed to the current management of José de Mello Saúde, with the ability to deliberate on all matters related to the exercise of its activity with respect to its corporate purpose, by the resolutions made by the Board of Directors and by the General Assembly;

Preparing and submitting to the Board of Directors the main policies of José de Mello Saúde, namely the remuneration policy, the staff management policy and the commercial and pricing policy;

Preparing and submitting to the Board of Directors, for approval, the Business Plan and the Budget of José de Mello Saúde for the following year, as well as to propose subsequent amendments;

Coordination and monitoring of the day-to-day management of the companies, directly and indirectly owned by José de Mello Saúde (“Subsidiaries”) by issuing, in the case of Subsidiaries in a group relation, i.e., whose share capital is wholly owned by José de Mello Saúde, mandatory instruction with the ability to, namely, deliberate on the definition of the strategy and economic and financial planning of the Subsidiaries; the approval of any business plan, as well as any changes and updates to it; the approval of the annual budget and any updates to it and the contracting of any funding or the signing of relevant contracts;

Signing all acts and contracts inherent to the activity of José de Mello Saúde, as long as their value does not exceed an amount equivalent to fifteen million euros;

Entering into bank loans or similar operations, granting shareholders’ loans and other forms of providing capital to Subsidiaries, as long as the corresponding amount does not exceed the equivalent to fifteen million euros,

To propose the holders of the governing bodies of the Subsidiaries on whose Boards of Directors all or part shall participate of the members of the Executive Committee of José de Mello Saúde will participate.


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The activity of the Board of Directors and the Executive Committee of José de Mello Saúde is supervised and monitored by the Supervisory Board, the Statutory Auditor, the Remuneration Committee and by the Company Secretary.

SUPERVISORY BOARDThe Supervisory Board is responsible for:

Supervising the management of José de Mello Saúde and monitoring compliance with the rules governing its operation;

Participate in the meetings of the Board of Directors of José de Mello Saúde where financial statements for the accounting period are evaluated;

To request the Chairman of the Board of Directors to convene the Board of Directors to evaluate facts that it considers relevant to the supervision of José de Mello Saúde’s management;

To verify the correctness of the accounting information, the accuracy of accounting documents and evaluate the accounting policies and the underlying valuation criteria;

Prepare annually the report of its activity and give an opinion on the management report and accounts submitted by the Board of Directors;

Monitor the effectiveness of the risk management system, the internal control system and internal audit system;

Supervise the preparation and dissemination of the financial information;

Supervise the auditing of accounting documents;

Supervise the independence of the statutory auditor.




STATUTORY AUDITOR In accordance with the Law and the Articles of Incorporation, it isresponsibility of the statutory auditor to examine the accounts of José de Mello Saúde, namely:

Verify the good standing of the books, accounting records and documents that support them;

Verify the extent of cash and stocks of any types of goods or values;

Verify the accuracy of the accounting documents;

Verify whether the accounting policies and the valuation criteria adopted by José de Mello Saúde lead to a correct evaluation of the assets and of the results.

REMUNERATION COMMITTEEThe Remuneration Committee is responsible for the definition of the remuneration policy of the members of the statutory bodies, to be approved by the General Meeting, as well as the setting of the remunerations of the members of the statutory bodies.


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CORPORATE SECRETARYThe Company Secretary is in charge of advising the Governing Bodies, according to the powers established in the Law, in the Articles of Association and in the Regulation of the Board of Directors, acting in order for the performance of the administrative and management bodies to be in accordance with the applicable legislation, with the Articles of Association and with internal regulations.

The Board of Directors and the Executive Committee are assisted by the corporate and shared-services departments and by a set of advisory bodies in their corresponding fields of expertise.

ADVISORY BODIES:

ETHICS COUNCILThis advisory body has, among its main tasks, the responsibility to analyse, on an ethical level, the questions raised by scientific advances, social developments and legislative activity in the fields of biology, medicine or health in general.

ADVISORY COUNCILThe Advisory Council is responsible for:

Analysing and discussing topics related to the industry, market and health policy;

Supporting the Board of Directors in the definition of José de Mello Saúde’s development strategy;

Preparing written opinions on questions raised by the Board of Directors of José de Mello Saúde.

INFRASTRUCTURE PROJECT TRACKING COMMITTEEThe Infrastructure Project Tracking Committee is responsible for:

Supervising the suitable execution of the projects in terms of quality, costs and deadline, namely in the technical and financial aspects;

Being consulted on new projects in their technical and financial aspects;

Assessing the key execution risks of the projects and proposing corrective and/or mitigating measures.




AUDITING AND RISK MANAGEMENT COMMITTEE The Auditing and Risk Management Committee is responsible for:

Evaluate and monitoring the Risk Management system;

Evaluate and monitoring the Internal Control system;

Evaluate and issue an opinion on the Annual Audit Plan;

Propose improvement measures to the Risk Management and Internal Control systems.

MEDICAL COUNCILAdvises the Board on clinical issues and continuous improvement of the services provided to all customers of José de Mello Saúde, with the following main tasks:

Advise on the definition of José de Mello Saúde’s clinical development strategy;

Propose the launch and follow-up of clinical projects common to José de Mello Saúde’s units;

Foster the development of clinical protocols applicable across all of José de Mello Saúde’s units;

Assist on the development of clinical innovation projects which simultaneously ensure clinical differentiation and increased efficiency;

Assist on in the definition of recruitment criteria and evaluation of medical professionals, for application across all José de Mello Saúde’s units.

NURSING COUNCILAdvises the Board on issues concerning nursing within the clinical activity of José de Mello Saúde, with the main responsibilities of:

Define the strategy of talent development and Nursing performance standards;

Consolidate the culture of evidence-based best practices;

Develop innovative projects that promote technical differentiation, improving efficiency of the processes of care and their respective levels of service;

Develop clinical quality and patient safety, based on the principle of continuous improvement; and,

Monitor the CUF Academy activity.


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PHARMACY COMMITTEEAdvises the Board on issues concerning pharmacy within the clinical activity of José de Mello Saúde, with the main responsibilities of:

Develop policies for use of medication in the context of José de Mello Saúde;

Develop therapeutic protocols for application across José de Mello Saúde;

Acts as a liaison entity between the Pharmacy and Therapeutic committees of José de Mello Saúde’s different units;

Annually approves José de Mello Saúde’s Medication Form, issuing a minute with such document attached, signed by the Chairman and by the Pharmacy Board of José de Mello Saúde;

Ensures compliance with the Medication Form of José de Mello Saúde (list of medications used in all units);

Issues opinions on the proposals for introduction of new medications in José de Mello Saúde’s form;

Promotes good pharmaceutical and therapeutic practices in José de Mello Saúde;

Promotes training in the medications area;

Selects the medications to be used in José de Mello Saúde’s units, ensuring the best cost-benefit and cost-effectiveness relationships.




CUSTOMER OMBUDSPERSONThe Customer Ombudsperson will carry out his/her functions with independence and impartiality, being responsible for

Receive and consider conflicts and complaints made by Clients, directly related to the activity developed by José de Mello Saúde’s units;

Mediate disputes and potential conflicts between Clients and José de Mello Saúde’s units;

Submit to the Executive Committee proposals for the resolution of conflicts or complaints from Customers;

Draft and present recommendations for improvement of Customer services to the Executive Committee;

Issue opinions on matters concerning the service provided to the Customers, when requested by the Executive Committee or by the boards of directors or executive committees of José de Mello Saúde’s units.


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Documents

JOSÉ DE MELLO SAÚDE - josedemellosaude.pt · Investment Case IEGRAED REPOR 2017 About José de Mello Saúde Message from the chairman Business model Strategy, achievements and goals