The market of private medical services could reach 890m euros by around 2011, more than double the 350m euros forecast for this year, a period during which cities other than Bucharest will come to generate around 70% of the value.
The almost 7 times increase compared with that of GDP is turning the private medical sector into one of the "stars" of the economy. Growth, which is expected to stay around these values, has lured both investment funds and entrepreneurs more or less experienced in this field.
At present, demand for such services is heavily concentrated in Bucharest, and generates around 158m euros of the overall 350m-euro market. However, over the next 3 years, we will witness a dispersion in demand, with cities other than Bucharest to hold an over two times higher bigger share than the capital, according to the data provided by Cristian Sas, Bucharest manager of Polisano clinics network, a top ten player on the market.
"One must take into account the substantial shift of demand toward other cities starting in 2010 as the market in Bucharest becomes saturated," says Sas.
Another trend to become increasingly visible will be growth on the segment of fee for service, namely for services directly paid by patients. Then, the next natural step is private health insurance. Despite Romania lacking the legislation that allows for the development of such packages at this moment, market players say this type of insurance will shortly become attractive.
The market of private health insurance was put at some 9m euros last year, with players on this market including Interamerican, Aviva, AIG Life or Allianz-Tiriac.
At the same time, investments in private hospitals are also tied to the development of private health insurance. Meanwhile, most major operators of private clinics have moved their expansion plans outside Bucharest. In cities other than Bucharest there really are acquisition opportunities because two or three years ago there were several players with 0.5m-euro turnover in a county, and now the value of their business has climbed to several million euros.
"Whereas three years ago there were 25 medical centres in Constanta county, with turnover of below 1m euros, at present there are 53, of which 5 derive turnover worth between 0.5-1m euros and 10 with turnover worth between 0.2 and 0.5m euros," said Petre Diculescu, a shareholder in Avamedica, which expects an 0.68m-euro turnover this year.
Medici's clinics, with turnover put at 1.2m euros this year, have a significant presence in Timis and neighbouring cities.
Caras Severin and Hunedoara are, according to Adrian Badescu, CEO of Medici's & Clinics, two areas in full development that could post increases following the arrival of new companies.
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