Analysis. Private medical players find market fit for growth

With private medical providers making large investments in their infrastructure, more Romanians now have a valid alternative to the dysfunctional public healthcare service.

By Anda Sebesi

At present, Romania’s public healthcare system comprises 366 public hospitals, down by 12.5 percent since the mid-90s. Meanwhile, the number of Romanians who needed hospitalization increased from 3.8 million in 1995 to more than 4 million in 2016, according to Digi24.ro. Furthermore, since the liberalization of the labor market in Europe, the public system has been powerless to halt a massive exodus of doctors: over 40,000 have left Romania in the last ten years, according to data provided by the Ministry of Health.

Poor infrastructure and management in the public healthcare sector combined with the low quality of medical services and corruption sowed the seeds for the development of private medical networks. As a result, players like Regina Maria, MedLife, Medicover and Sanador have managed to attract Romanians with medium and high incomes, through the higher standards of their services. And their strategies have borne fruit, as the data reported by Ziarul Financiar, based on the most recent figures issued by the National Institute of Statistics, show that the number of patients hospitalized in private hospitals grew by 20 percent in 2016 on 2015. The increase was generated both by the development of private healthcare networks and Romanians’ growing preference for private hospitals over those run by the state. According to the same source, at present private hospitals represent about 35 percent of the total number of hospitals in Romania.

Read more about

Analysis Gebrüder Weiss Romania: Transport and logistics market in 2024 – from challenges to opportunities

read more

With more private medical networks focusing their investments on expansion, Fady Chreih, CEO of Regina Maria, told Business Review last year that there is plenty of room for the expansion of private medical networks, as currently a quarter of Romanians do not have sufficient access to basic healthcare services. “And this is not only a business strategy, but a social need. We are making efforts to cover the gaps where the public system has delayed investments in new medical units or staff,” he said.

What’s next for the healthcare system

According to a study conducted by Deloitte, 2018 Global Health Care Outlook – The Evolution of Smart Health Care, change is coming to the medical system. Exponential technologies are helping to drive that change by making care delivery less expensive, more efficient, and more accessible on a global basis. For example, in 1999, scientists spent five months and approximately USD 300 million to generate the first initial “draft” of a human genome sequence. The cost of generating a human genome sequence is now less than USD 1,000 and could eventually drop to less than USD 1. In the coming years, exponential technologies have the potential to dramatically disrupt the systems and processes that have historically defined the industry.

The same source says that with aging infrastructure in some developed countries and a lack of robust infrastructure in emerging markets, governments and private healthcare providers are rethinking how to optimize inpatient and outpatient settings, and are planning how to integrate digital technologies into traditional hospital services to reduce costs, increase access, and improve patient care in the future. In the coming decade, many US and European hospital executives plan to renovate or rebuild outdated infrastructure. Similarly, increasing healthcare demand in emerging economies should drive considerable hospital planning and construction.

Demographic and economic trends, coupled with advancing technologies, could have significant implications for how hospitals of the future will be staffed, sized, and designed. For example, more healthcare services are taking place in outpatient settings and in the home, although some types of patients – for example, complex cases and the very ill – are still likely to require inpatient hospital care.

In Deloitte’s view, the future of work is likely to be powered by technological advancements and an augmented workforce that combines people and machines to get things done in a way that’s not only more productive, but also more rewarding. From a hospital or health system perspective, it means addressing pain points including a dispirited workforce with growing staff shortages and high levels of burnout, a reduced ability to attract and retain top skills, a reduction in the quality of care, and a loss of position as a patient’s provider of choice.