Market Talk: Private Medical Care an Increasingly Healthy Market

Competition

The private healthcare sector appears to have reached a tipping point, and what earlier used to be the privilege of a few, now attracts ever-growing numbers of patients, while businesses are also sprouting up.

Dennis A. Diokno, FirstMed-FMC Kft.

“The private healthcare provider market in Hungary has gone through a great evolution in the past three to four years. The market has very recently reached a turning point. Companies have become more active in marketing and brand building and five or six investor groups have created a vivid M&A activity in the sector,” György Leitner, president of the Primus Private Healthcare Providers’ Association, tells the Budapest Business Journal.

Patient numbers have also been on the rise in the private sector. At this point, almost two-thirds of Hungarian citizens have taken private healthcare services, which is not anymore the privilege of the rich, but ever more lower-middle class people are opting to pay privately for medical services.  

Petra Kelemen, PR and marketing manager at Swiss Medical Services Kft., quotes figures that appear to confirm the growing tendency.  

“The market is growing by 10% year-on-year; large providers like Swiss Medical grow by around 15%. The competition is getting fiercer, large investors are entering the market,” Kelemen says.

She adds that in the past half a decade the market size has tripled, salaries have doubled while profits have stayed around 12-14% of gross income.  

“Nevertheless, the market is hugely fragmented due to the so-called ‘flat clinics’, practices operated in a block of flats,” Leitner points out.  

“These practices usually operate in the grey zone from a taxation point of view. Such practices account for 80% of the total private healthcare market. The market has been on double-digit growth, performing consolidation, and private health spend will soon reach EUR 1 billion,” Leitner adds.

Dr. Gyula Csermely, Rózsakert Medical Center

Growing Demand

In parallel with this growth, comes increased demand. “In Hungary, a third of expenditure in health comes from the private money of patients (while these individuals also make tax contributions to public healthcare). Hungary’s improved economic performance means that there is greater demand and also more money available: people are able to spend more on their health,” Dr. Gyula Csermely, medical director and managing director of Rózsakert Medical Center tells the BBJ.

“With growth comes improved quality, which supports the high expectations patients have of their private healthcare. Because the number of service providers on the market has grown dramatically, there is more choice and when it comes to their health, and people want the best quality. We constantly monitor our customers’ needs and feedback to ensure we are always able to supply the highest possible level of healthcare,” Csermely adds.

Dennis A. Diokno, the CEO and founding partner at FirstMed-FMC Kft., confirms the view of his colleagues and competitors.  

“The private healthcare sector is growing. There are a lot of new entries, M&As. It is also worth mentioning that demand is growing as people increasingly turn to the private sector for smooth, high-quality services,” Diokno says.

“Healthcare in Hungary — as in all parts of the world — is one of the most dynamic industries in which to be. It is interesting to see how digital transformation is redefining patients’ expectations as well as opening up new horizons for customer care as well as healthcare services,” Diokno adds.

The market seems to be a lively one; investments are growing, which is well-represented by the mergers and acquisitions activities. This sentiment leads to strong competition.

“Individual institutions are becoming increasingly specialized in certain areas and are able to provide an even higher level of service, while there is also tremendous competition to get the best specialists in their field,” says Csermely.

More Services

Service providers and private clinics who offer comprehensive healthcare are looking to improve, offering their patients an increasingly wide range of services with an emphasis on excellent quality.

“We are a founding member of the Primus Association of Private Health Service Providers. One of the association’s primary objectives is to create a set of quality standards. If a provider meets these standards, it can receive the Certified Private Health Service Provider Trademark,” Csermely adds.

Private healthcare providers are also paying special attention to customer experience. “We believe that the highest level of expertise, human-centered treatment and attentive, constantly evolving services are the foundation of growth,” Csermely explains.  

This echoes president Leitner’s view. Talking about the differences between the private and public sectors, Leitner mentions the customer experience of patients as one of the main drivers for people transferring from the public sector to private care. (See a more detailed comparison of the sectors on page 15.)

“It is also clear that the patients themselves now want more than what an ‘apartment clinic’ can provide. They want comprehensive healthcare, first class patient management, constant availability, convenient services and a bill after receiving their treatment. This is what a professional institution can offer,” Csermely concludes.

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