The coronavirus pandemic will have a negative effect on the private healthcare market, and this is reflected in the newest PMR forecasts for 2020, published in the report entitled “Private healthcare market in Romania. Market analysis and development forecasts for 2020-2025”. PMR expects increases in GDP and its components for 2021, and respectively in private healthcare market value.
Telemedicine: the market driver of private healthcare market in 2020
The Romanian private healthcare industry has developed considerably over the last few years, attracting substantial numbers of international investors and local entrepreneurs.
Opportunities on this market include:
- Growing popularity of telemedicine services in the time of pandemics.
- A reduction in the levels of satisfaction of patients with public services.
- The slowly changing mentality of patients, who are becoming increasingly better informed and requesting integrated and personalised medical services. These can be offered only by the private sector, which is, therefore, attracting these patients.
- Extensive M&A activity, an increase in the power of the largest players, which will help them to develop their offers and dictate prices.
There are also negative issues which impede the development of the private sector:
- The coronavirus pandemic will definitely have a negative effect on the private healthcare market, and this is reflected in our forecasts.
- The cultural barrier. Romanian customers are used to having healthcare costs covered by the state, and they do not envisage themselves paying for protection because the state has always supplied healthcare services free-of-charge.
- The fact that healthcare legislation is affected by politics.
- Barriers to the development of private hospitals, including the limited purchasing power of the public: in recent years this market has grown in the arena of same-day facilities, and the private hospitals market still accounts for a negligible proportion of the overall hospital market.
- The current public healthcare environment and the comprehensive basic package offered in the public system.
- The occurrence of informal payments, instead of other, more transparent, payment mechanisms, in the public sector.
Suspension of medical services to lead to a deterioration of private healthcare market in 2020
The spread of the coronavirus pandemic in Europe and, as a consequence, the slowdown of the major European economies, is expected to impair Romanian economic growth. At the date on which the report was being prepared we envisage a negative rate of GDP (gross domestic product) growth for 2020. Persistent uncertainty (which may harm private investments), combined with a worsening of exports (caused by limited external demand, particularly in Italy, as one of Romania’s key trading partners), unusual government actions taken in order to stop the spread of the virus (the introduction of a state of emergency and the temporary lockdown across the country, including the suspension of schools, the closure of hotels, restaurants and entertainment facilities, the partial closure of borders and the suspension of international travel) will, along with the reduction in household consumer spending (particularly in terms of non-essential products) lead to a deterioration in the macroeconomic situation in Romania. This will have a direct negative effect all kinds of private healthcare funding – fee-for-service and the purchase of subscriptions and insurance by companies and individuals. The suspension of many medical procedures other than the treatment of coronavirus cases and the testing of potential patients will also contribute to the negative growth of the private healthcare market in Romania.
Positive rate of growth on the private healthcare market in 2021
If the coronavirus problem will calm down this year, PMR expects increases in GDP and its components for 2021. This will reflect, in part, a low reference point in the statistical data, along with the gradual renewal of optimism among enterprises and consumers. This is why PMR forecasts a positive rate of growth on the private healthcare market in 2021, although it could be much lower than those of previous years (prior to 2020), as it will take time for the market to recover.
However, it should be noted, that, because of the rapidly changing situation on the date on which the report is being prepared, the further direction and intensification of the pandemic’s development remain an important risk factor for forecasts.
Pharma and Healthcare Business Unit Director
Tel. +48 12 34 05 135