Private healthcare blooming

Those with a hunger for good news have to read a lot to find a piece that fulfills their desire. However, there is a sector that stands out from the series of decreasing markets, negative expectations, and budget cuts. The private healthcare supplier sector is just blooming in Hungary.  

“The economic environment is falling off indeed, which results in some rearrangements, but life continues to be the most important,” Dr. Elemér Ilanitz, the medical director of Dr. Rose private hospital, told the Budapest Business Journal explaining the reasons why their clinic shows resistance to the crisis. People are living longer and longer and want to stay active, he said. “Private healthcare is on the rise and remain so for a long time.”

The almost 30% growth that healthcare provider Medicover reached last year might support sector-wide optimism as well, while Telki Kórház also has no reason to complain. Although due to the crisis, cheaper diagnostic tests and smaller surgeries have recently outgrew the more complex and more expensive interventions, this negative trend is balanced at Telki by the appearance of patients who, after the tax authority NAV revealed some misuses, have lost confidence in the smaller private healthcare suppliers. “As we see, there is a circle in Hungary that knowingly stays away from any type of grey or black economy,” Kornéla Boda, marketing director of Telki Kórház, told the BBJ. “These people want a more reliable, experienced institution that works with transparent prices,” she said.

State vs. private

Worsening conditions in the state healthcare system also work in favor of private market players. The more crippled the state service is, the more popular private services become. And it is crippled beyond doubt. “The long waiting lists and the many shortcomings of state healthcare make patients insecure and finally pushes them to our doors,” Telki’s Boda pointed out. “More and more people got fed up with the state health service,” Ilanitz of Dr. Rose agreed, proudly adding that the five-star services of their clinic are said to be unique in Hungary.

But desire for luxury is not even necessary to see the fields where the state service is not competitive with private assistance. Meeting twelve patients in a single hour, the capacity required in the state healthcare system, often does not allow time for basic duties such as fully informing the patient about the possibilities, not to mention “extras” such as giving them confidence, talking about their fears, or establishing a good doctor-patient relationship, which is otherwise considered as a fundamental component of the recovery process.

“I cannot blame state-employed doctors for not being remarkably patient and open for personal aspects, when they work like a mule and have no time even to sleep,” Főnix-Med’s commercial manager Gábor Zsolnay said, referring to the extreme level of state healthcare staff’s overloadedness. “Here, patients arrive in a nice environment, and do not even have to wait to get into the office of a calm and co-operative doctor who focuses only on the case of the given person,” he pointed out the main difference between the state and the private healthcare services. Dr. Rose’s Ilanitz shares this opinion. “The diagnosis is the same as it would be in a state hospital, but here the doctors explain what all those Latin words mean,” he asserted briefly.

The length of waiting lists is another crucial point. While some types of surgery, or even a free hospital bed, are available only after months of nerve-wrecking waiting in the state system, things obviously go much smoother in the private sector where even the special tests or interventions can be made without any time wasted.

“Besides quickness, the fact that there is no need for parasolvency is what we consider the most important,” Telki’s Boda said. Mónika Herczku, career advisor at job portal Profession.hu agrees saying that “No months-long waiting lists, no parasolvency – these are the biggest advantages of the private to the state healthcare system.”

Becoming visible

Increasing health consciousness, which was reported by all market players surveyed by the BBJ, also strengthens private suppliers, but what probably counts even more is that, according to modifications in the Personal Income Tax Act that took effect on January 1, 2012, employers can provide their workers with health insurance free of charge and contributions.

The benefits of such insurance are obvious. “Health insurance packages make health expenditures predictable and calculable while also providing security as patients at Medicover can get any outpatient specialist care in unlimited amount for a fixed flat rate,” Péter Grossman, managing director of Medicover, told the Budapest Business Journal.

“Providing health insurance is a good instrument to keep workers – or at least the key employees – busy,” Herczku from Profession.hu pointed out. “Contrary to the slow service at the state system, private insurers, who are contracted with the healthcare providers, can quickly arrange and finance everything needed to get the employee back to the gears.”

Also, health insurances are not only able to boost efficiency but can support the company’s image as well. “Providing employees with high-quality health insurance as an extra benefit is a good tool for companies to differentiate themselves from other employers,” Medicover’s Grossman said.

At the same time, while Főnix-Med’s Zsolnay said that “the regulation is promising,” and other suppliers also reckon on an increase in their turnover as a result of the tax law modification, this might be the point where the economic circumstances interpose slightly. “Compared to last year, almost 10% of employers have abolished cafeteria benefits in 2012,” Profession.hu’s Herczku pointed out, adding that mostly SMEs had to cut back such figures.

However, apart from the economic environment, any kind of new tendency evolving from the modified regulation will be clearly visible only in 2013. According to Mónika Herczku, “by the time the regulation was made, companies already had their cafeteria budget plans for this year, which, as a result, excluded this benefit.”