Paying for health

Newsroom 11/09/2007 | 15:30

Bucharest options for those who want to escape the public heath system in search of more tailored health services are limited at the moment. Only two private hospitals are functional in Bucharest. The first opened in 2006 and the second just last week.
The private hospitals are accompanied by several private clinics which round out the total private options. Despite the still meager selection, the private health services market is estimated by pundits at between EUR 200 and 400 million at the moment, with prospects to increase by 15 percent along with the revenues of those disgruntled with the public health system.
The private healthcare system needs general economic growth, a legislative framework to allow the development of insurance mechanisms, specialists, patients satisfied with the services and powerful investors, says Bogdan Pana, commercial director with Euroclinic.
“Unfortunately, Romanians don't have the habit of preventive medical care, but they will reach it in time. […] We don't expect major changes in the retail healthcare market, but we hope for the corporate market to be more open, mainly if the legislation system offers enough fiscal advantages to companies,” Pana goes on.
Foreigners seem to be an important part of these hospitals' clientele. Euroclinic private hospital reported foreign patients totaling 35 percent of the total last year.

Two hospitals share a virgin market
Although “everybody in the world is poor when they have to pay for quality health services” according to Guy Ellena, director for health and education with the International Financial Corporation, there are enough possible customers for private health services in Bucharest. “There is a high demand for such services on the Romanian market. Bucharest has a layer of people with the means and the will to pay for private services and their alternatives are limited at the moment,” said Mihail Marcu, president of MedLife upon the opening of its first private hospital.
Marcu is planning to invest $25 million in a chain of six private hospitals around the country in the following years, but the amount doesn't include medical equipment. The recently opened hospital, Life Memorial, needed some EUR 10 million in investment, with an additional EUR 3 million in equipment. The sum invested in each of the following hospitals MedLife will open should be recouped in seven years, according to Marcu.
Opening such hospitals will create a model and eventually boost the creation of a health insurance market, says Ellena. In his opinion, private hospitals will ultimately compete with the public sector.
“No country in the world can aim at providing for healthcare only from the state budget,” the IFC official believes. IFC controls 20 percent of MedLife's capital.
MedLife, soon to launch private health insurance to go with the new hospital, hopes to sell 10,000 insurance policies by the end of this year. The company is in talks with Allianz, ING and Generali over tailored health insurance policies.
The insurance division, to be called AsiLife, will offer five insurance packages for corporate clients varying between EUR 15 and 100 per month. The company will also launch two insurance packages for individuals, with costs between EUR 100 and 200 per month.
Life Memorial Hospital, built on some 10,000 sqm, has a 100-bed capacity, and can host up to 50 operations per day at maximum capacity, said Marcu.
The first private hospital in Bucharest, Euroclinic, was opened last year following a EUR 10 million investment. A third of the hospital's patients in recent years were insured through Medisystem, part of Interamerican insurance group. Medisystem and Interamerican are both part of Eureko group.
The hospital received more than 8,200 patients last year, according to Pana, an average of 30 patients per working day. The hospital is planning to attract an increasing number of patients – 20,000 this year – based on an aggressive development plan.
Euroclinic was set up as a public-private partnership with the Emergency Hospital, which offered the plot on which the private hospital was built.

Maternity services, most sought after
A night in the Euroclinic private hospital may cost between a little more than EUR 100 and almost EUR 200 for a VIP room. MedLife announced a EUR 50 tariff per night in a double room at Life Memorial Hospital, while a single room will cost EUR 100 per night.
Apparently, the most sought after services in these hospitals are maternity services. A normal birth procedure costs around EUR 1,600, which includes all the services and three nights in the hospital – while a Ceasarian section runs to around EUR 2,200. General medical investigations were also among the most sought after services in Euroclinic hospital, followed by general surgery.
Surgery costs between EUR 470 and 1,320. Of the 800 procedures performed by Euroclinic's doctors last year, 24 percent were general surgery, according to Pana.
One of the least expensive services in the private hospital is a normal visit to the doctor, which runs to approximately EUR 20.

Corina Saceanu

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