Private Hospitals Account For 21% of All Hospitals in Romania, Says PMR

29 Mar 2013 • by Natalie Aster

The share of non-public facilities as a proportion of the total number of hospitals is at its most substantial in Poland, Bulgaria, the Czech Republic and Slovakia, between 33% and 37%. There are many investments in new private hospitals in Romania, and private hospitals account for 21% of all hospitals. In Hungary they account for 7%. The reason is that healthcare (hospital) privatisation is at different stages in the various countries, described comprehensively in the latest PMR report “Non-Public Hospitals Market in Central Europe 2013”.

Report Details:

Non-Public Hospitals Market in Central Europe 2013
Published: March, 2013
Pages: 186
Price: US$ 3,500.00

Reductions in numbers of public hospital beds – a crucial factor in the CE countries

  • The public hospital system in the CE region faces underfunding. Expenses have been growing more rapidly than healthcare budget income, and hospitals are drowning in debt. The facilities are managed inefficiently and employ too many medical personnel, which is typical of healthcare in the post-Soviet countries. One way of improving the situation is a reduction in the number of public hospitals and hospital beds. 
  • In Romania the number of public hospitals fell by almost 15% between 2009 and 2011, whereas the number of beds during this period fell by over 9%. 
  • In Bulgaria the public hospital network lost eight facilities (4%) between 2008 and 2011. 
  • In Poland the number of public hospital beds fell by 7.5% between 2008 and 2011. Between 1999 and H1 2012, the ownership of more than 130 hospitals changed, and these became non-public facilities. 
  • In the Czech Republic there were no substantial fluctuations in the number of public hospitals and hospital beds between 2008 and 2011, but the ministry’s plans suggest that the number of beds at public hospitals will be reduced by 6,000 in 2013. 
  • In Slovakia the number of public hospitals was reduced from 115 in 2006 to 108 in 2008, and the figure remained unchanged in 2011 (a 6% reduction in the years analysed). 
  • The number of public hospitals in Hungary fell from 138 in 2007 to 134 in 2010. At the same time, there was a 10% reduction in the number of public hospital beds between 2005 and 2010. The number was reduced by 9% in 2006 and 2007 alone.

“Sometimes the shrinking public hospital network in the CE is creating an empty space which could be filled by private investors, particularly given the fact that in all of the countries analysed private hospitals have the opportunity to sign contracts with a national insurance fund.” Monika Stefanczyk, the Head Pharmaceutical and Healthcare Market Analyst said.

Different faces of hospital privatisation in CE

Another solution is the commercialisation and privatisation of hospitals. The process of hospital privatisation remains at different stages in the various countries. In Poland and Bulgaria the non-public hospital market is developing in two directions. Private concerns are investing in the construction of new establishments which provide commercial hospital services and/or have a contract with the national insurance fund. The second direction is the transformation of public hospitals into joint-stock and limited liability companies in which private shareholders can potentially participate along with the local authorities. In theory transformation is the first step toward the privatisation. In practice investors are often not interested in old hospitals which require considerable financial outlays. In the opinion of the market players operating in Poland surveyed by PMR specifically for the purposes of this report, it would be better to close rather than privatise transformed public hospitals burdened by debt, mainly because the construction of a new establishment is more profitable than investment in existing facilities (for example, such an opinion has been issued about the Slovakian hospital in Razsochy).

There is a different situation in the Czech Republic, where in recent years many state-run hospitals have been taken over by private operators (mainly as 20-30 year concessions). In terms of concession agreements, companies are able to negotiate funds for renovation from the budgets of local authorities and, as a result, many existing non-public hospitals have been refurbished.

A draft new healthcare law was presented for public discussion in Romania in January 2012. This would have allowed the privatisation of all hospitals and public clinics but it was widely criticised and withdrawn after protests. Despite this, the Romanian private hospital market has been developing extensively and independently of the public facilities.

Hungary and Slovakia present two similar situations. Hungary, which made some progress in boosting the efficiency of its hospitals and reduced the number of beds in the 2000s, has not seen major developments in recent years. The privatisation of hospitals, which was attempted in the past through the tentative handover of management to private entities, and which failed badly, is now halted. Hungarian hospitals have recently been centralised, and there is no likelihood of their privatisation in the next few years. The private hospital market is also in a very poor condition.

In Slovakia, the process of commercialisation stopped at the end of 2011. Thirty Slovak healthcare facilities were to be transformed into joint stock companies by the end of 2011, a process that was supposed to be preceded by the reduction of their debts. The transformation did not take place as in mid-December 2011 the Slovak parliament adopted an amendment to the Slovak law on healthcare providers that stops the process of transformation of public hospitals into joint stock companies. The former health minister pointed out that the petition against the transformation process had been signed by nearly 100,000 citizens. In April 2012, when the question of hospital privatisation was raised once again, Robert Fico, the Prime Minister of Slovakia, confirmed that public hospitals would not be transformed into joint-stock companies. Strict controls on hospitals, rather than privatisation, will take place, in order to avoid the inefficient spending of funds and the accumulation of hospital debt.

More information can be found in the report “Non-Public Hospitals Market in Central Europe 2013” by PMR.

To order the report or ask for sample pages contact ps@marketpublishers.com

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