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Healthcare: KEYFIN ESTIMATES: The ROMANIAN private health care SERVICES, RECORD LEVEL in 2021
The turnover of the Romanian private medical services market rose by 11% compared to 2019 and exceeded the 2011 level by 312%, reaching lei 15.4 billion in 2020, according to the latest KeyFin analysis. For 2021 KeyFin analysts estimate lei 17 billion threshold to be exceeded, due to the testing process and the increased demand for private services, in the context of re-directing efforts of public hospitals to treating COVID-19 patients.
Moreover, the net result (net profit minus loss) of private health care providers increased by 16% compared to 2019 and was 312 times (+31,080%) higher than the historical minimum from 2011, reaching lei 2.6 billion in 2020, due to the better conditions the Romanian patients find in private hospitals: from the quality of services offered, performing equipment, consultation, treatment, and interventions facilities to the professional workforce.
"In the context of an overwhelmed public health system, which focused on the management of the COVID-19 pandemic and that had put aside the other patients, the private health operators came to support the citizens and responded precisely to these needs. The sustained growth trend in this market, based primarily on investments and professionalism, will continue in the medium term. The public health system should follow more effective Western models and start to place much more emphasis on education and prevention, for example through national screening programs, and via a public-private funding scheme, as the pension system model, but also supported by European funds, to take advantage of this rare opportunity so that Romania rebuilds its health care infrastructure. A proactive approach should include the existence of know-how in both software and medicine and cover the new healthcare segment that is currently being defined by the advance of technology, telemedicine, and artificial intelligence," said Diana Florescu, KeysFin economic analyst.
The private health care market is one of the few where the number of companies increased substantially, by 9% compared to 2019 and by 125% from 2011, to nearly 23.1 thousand companies in 2020.
The workforce also increased by 1.3% from 2019 and was 75% above the 2011 level, reaching almost 78 thousand employees in 2020.
ROMANIAN PRIVATE HEALTH CARE LEADER BOARD: REGINA MARIA REMAINS MARKET LEADER
The top of the largest companies by turnover remained unchanged in recent years but all 3 players have increased their market share, so that CENTRUL MEDICAL UNIREA SRL, known to the public as REGINA MARIA, is in the first place, after the highest annual advance (both nominal and as percentage) of the top 10, with a turnover of lei 733 million and 4.8% of the total, MED LIFE SA ranks second, with annual revenues of lei 509 million and 3.3% of the total, and SANADOR SRL is third, with lei 410 million and 2.7% of the total in 2020.
Overall, the top 10 companies offering private health care services concentrate almost 22% of the value of this market locally.
MED LIFE SA (second player by turnover in 2020) was the most profitable company, after the highest annual advance in Top 5 of 651%, reaching lei 41.8 million in 2020. The company recently announced the acquisition of a 60% stake in Pro Life Clinics, with the new company to be integrated into the Sfanta Maria network.
ROMANIAN PUBLIC SPENDING ON HEALTH, IN THE BOTTOM 5 EU MEMBER STATES
According to the latest Eurostat data, government spending on health was around euro 12 billion in the year of the pandemic, thus placing Romania in 15th place with 1.1% of the EU total.
Germany, France, and Italy were leaders with euro 287, 207 and 130 billion, and respectively 26.7% and 19.3% and 12% of total public health spending in the EU in 2020. In terms of share in the Gross Domestic Product, however, Eurostat data puts Romania among the last 5 European countries with only 5.5% of GDP, far from Austria, the Czech Republic and France, all 3 spending almost double on health, meaning over 9% of GDP in 2020.
While initially Romania and the other European States were caught on the wrong foot by the COVID-19 pandemic when it comes to providing protective equipment, the number of beds, ventilators or medical personnel, a number of mechanisms have been developed that can be implemented quickly in the event of similar new health developments, KeysFin analysts conclude.
Note: KeysFin's analysis is based on annual, non-adjusted, aggregated financial data reported by companies to the Ministry of Finance (at the end of the period) that had as main scope of active one included in the 86 NACE group: Human health-related activities. All figures are expressed in lei and the data was extracted at the beginning of 2022.
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