Nevertheless, in the recent years, its influence has significantly decreased due to both closing of a number of hospitals, process set to continue under IMF protocols, and with a rapid growth of the private players.
The private healthcare system has steadily increased the number of units in the past decade. Initially, it started with single clinics and laboratories, it has later constructed chains of both, while recently it has boomed in hospital-type units – a trend which is expected to continue at a high speed for at least two more years.
Much of 2012 has been plagued with mostly one-way discussions on how to create revenues and control expenses within the public healthcare system. Debates have included the budget allocations, public services rendered free of charge, but also the co-payment of a series of services.
In respect of the co-payment of a selected list of health services, the entire process of assigning costs for the patients has been placed under review at the end of the summer, with more decision making being expected in the first half of 2013. Under the current IMF mandate, there is no set out date for the conclusion of the co-payment, creating possibilities for the deadline to further slide.
2012 – the year of deeper cuts
The healthcare sector in 2012 has continued the trends constituted since 2008, with its most important ones proving to be:
• Continuous decrease in public budget allocation for healthcare – 4% of GDP in 2012 , against 5% in 2011
• Restructuring of the public sector services – closing a number of hospitals or turning them into nursing houses (67 hospitals were closed in 2011), limiting the free of charge access to services to a few social classes and introducing co-payment for the rest of the population
• Increased impact of the private insurance in the detriment of the public insurance, therefore further limiting the effects of public insurance in expanding capacities and adding investments
• Increasing private investment in developing chains of clinics and adding hospital capacities – 54 private hospitals currently offer more than 3,000 beds, mostly in generalist units
• Increased competition and general margin decrease in the clinic chains, with significant potential for restructuring – top 5 players have posted decreasing margins in 2011 versus 2009
• Decreasing number of medical specialists in the market, with a significant number leaving for Western Europe
2013 – 2014 – the years to decide the decade
The following couple of years have the potential to be decisive in how the healthcare sector will shape for the upcoming decades.
A number of crucial elements for the industry will have to be finally defined, such as the business models for private clinics, for private insurance and for private generalist hospitals. At the same time, the public sector covering all these markets will need to reshuffle, along with specialist hospitals and the emergency hospitals.
On the business model side, it is important for most players torealize that the risks posed by increased reliance on the state budget’s reimbursement of services is probably too high to be assumed as a working model going forward. Currently the models which work are based on private subscription and payment for service.
Given the increasing importance of the private actors in all of these markets, the influence they will have over the state-run system is set to increase. Trends like increasing revenue per customer, additional investments in specialty hospitals (pediatrics, orthopedics, urology, obstetrics, cardiovascular and oncology), opening new major hospitals also outside Bucharest and second tier cities will exert direct changes in the public sector’s services.
Significant changes are expected in the private insurance, now the market presenting only a few accepted products – life insurance with medical coverage and check-up insurance, but little plain vanilla health insurance. In 2013-2014, with the opening of 18 more privately operated hospitals, the stock of beds should surpass the 4,500 threshold, which in turn would enable a better national coverage for medical insurance services.