Pay-as-you-go medical care and private health insurance are becoming more popular, helping to build a new market.
Limited access to surgeries and long waiting lists are causing ever more Hungarians to turn to private health care. Effectively they are choosing to pay out of pocket for medical services instead of using the state care for which they have already paid through their taxes.
A legal change in 2012 allows private insurers to capitalize on the weakness of the state-run system and create a parallel, private healthcare market. Hungarians are taking out private health insurance plans in increasing numbers. Meanwhile the number of private health centers is growing, and there appears to be a demand for even more of these clinics.
Réka Kun decided to switch to private health care after she had been mistreated at a public surgery. “I lost faith in public facilities and went to see a private physician on friends’ recommendations,” she told the Budapest Business Journal. “In public health care, they don’t care about you and there is too much waiting.”
Working on the administrative staff of the Budapest branch of an international firm, Kun earns no more than the average wage, yet she is willing to pay extra for better treatment. She belongs to a growing group of individuals who, despite their modest earnings, set aside money for private health care. Many of them are young adults who have finished at least high school, and most are women, apparently because women tend to be more health conscious than men, according to people working at the private clinics. A large proportion of these private patients apparently keep paying state medical insurance while seeing a private physician.
Private health care has long ceased to be the privilege of the rich. In fact, the most well off do not get treatment in Hungary at all. It is the middle-class that makes up the clientele of these private facilities, Edit Schranz, head of press at Róbert Károly Private Clinic, told the BBJ. Hungarians account for 90% of its patients, two-thirds of whom live in Budapest or nearby; most (80%) use out-patient services, and the proportion of in-patients is low (20%), according to Schranz. Annually, she said, physicians at the clinic treat 30,000 patients, perform 3,500 operations, deliver 700 babies and provide 600 fertility treatments. The latter two fields have seen the most dynamic expansion, Schranz said. Every year, the number of its patients increases by 15-20%. The growth is steady despite several new private surgeries/clinics opening in Budapest.
Buda Health Center, a private healthcare facility in Buda has also seen a double-digit growth in recent years. Its target group, the upper middle class, was less impacted by the crisis thus it did not see its clientele shrinking, even in 2009. The center says it has 1,000 new patients every month, and since opening in 2002 it has treated 170,000 clients.
The center has a solid base of Hungarian patients, who outnumber corporate clients and foreigners. According to Buda Health Center, the typical customer pays in cash for the various fee-for-services packages that it offers, as opposed to the flat-rate policies offered by some other companies. Except for the unemployed, nearly all the customers at the center use some kind of private healthcare insurance, even if it is only modest coverage for an annual fee, said András Kiss, the center’s marketing director.
The market for private health insurance really took off in 2012, when legislation allowed employers to give their employees private health insurance tax-free. This helped widen the circle of privately insured patients and allowed people with a lower income to use private healthcare. It also made business sense for firms who originally insured top-level management only. Growth is steady, but the boom the market expected three years ago is yet to come. In Hungary, 1-2% of the population has private health insurance, calculates Gábor Karai, managing director of Advance Medical Hungary Kft. This compares with 25% of the population (or more than ten million people) in Spain, where Advance Medical is headquartered.
Advance Medical Hungary Kft. acts as an agent, finding the best doctors, hospitals and clinics for the clients of private insurance companies. The company said it first checks whether the insurance covers the patient’s needs, then looks for the best doctor, hospital, etc., makes the appointment and takes care of all the rest, so a patient only needs to show up at the hospital. Few people have heard of this service, as the segment is in an early stage, and there is a lot of room for growth, Karai said.
Beyond offering more time and care to patients, a pleasant environment in clinics and lounges, and less time in the waiting room, private health firms are attracting customers through a market-driven mindset.
People, especially the young, treat health care like any other service they use, said Kiss of Buda Health Center. They go online and compare packages and prices, just as they would when booking a hotel or a flight. The center, therefore, relies heavily on online advertisement like Google Adwords, SEO, blogs, and Facebook. “We think in patient lifecycles from the moment they visit our webpage until after their care/treatment ends, and they can check their test results online. We have a strong marketing approach and wish to be very visible online,” Kiss said. A market-driven mindset is reflected in the way it uses resources – for instance seeking to ensure that medical equipment is used to its full capacity. To keep the clinic busy, it fills potential downtimes resulting from, say, someone cancelling an appointment, by offering the vacant places at a discount of up to 30%. “We currently have 1,000 people signed up for our ‘last minute list’,” Kiss noted.
With the demand for their services rising, all major private health care facilities are expanding: Some have opened new branches, as Medicover did this year in Paks and Székesfehérvár, others are considering expanding existing facilities. The business potential is high in these services, which involve far less risk than complex operations or intensive care wards, which in Hungary are run only by state-run hospitals. From an insurer’s viewpoint, there is room to grow. According to Karai, people insure their cars and homes; compared to these, the penetration level of health care is far behind.