By Gergely Szakacs

BUDAPEST (Reuters) – Csilla Balla became anxious after her doctor told her she would need surgery to remove a benign skin growth on her face, and she decided to go back to see her to discuss other options.

“They told me the next available appointment was two weeks later,” said the 46-year-old teacher from Budapest. “It would have taken two weeks just to have another discussion on whether surgery was really necessary.”

Frustrated with the public health service, Balla sought a second opinion from a doctor at a private practice, where she was offered an appointment within a few days. The doctor told her she did not need surgery and burned off the growth in five minutes.

The treatment cost Balla 15,000 forints ($51) and she hasn’t had any problems since.

Her experience reflects a broader trend in Eastern European states, from Hungary and Poland to Romania, where growing numbers of people are opting for faster access to medical care at private clinics and hospitals.

The change is being driven by low public health spending as a share of the economy – which has often led to staff shortages and longer waiting times for tests and surgery – coupled with rising wages, which is making private care a viable alternative.

Employers are increasingly offering private medical cover as a perk to attract or retain employees at a time of falling unemployment and record labor shortages.

As a result, business is booming for private healthcare providers.

“This is a period of conquest for private clinics,” said Peter Pal Varga, director of Budapest’s Buda Health Centre, in which billionaire investor Sandor Csanyi acquired a majority stake in 2017.

Varga told Reuters his company planned to build a new general hospital in Budapest, and modernize its one existing hospital which specializes in spinal surgery, at an estimated total cost of about 20 billion forints ($70 million).

“Our current private inpatient capacities are no longer sufficient,” he added.

There are no comprehensive figures for the size of the private healthcare market in Eastern Europe, but four of the biggest players in the region had combined revenues of almost $660 million last year, up by nearly a fifth on average, and forecast similarly strong growth in 2019.

Like Buda Health, all five major healthcare providers interviewed by Reuters said they were expanding their operations to keep up with demand.

Poland’s top private health player Lux Med, for example, has recently acquired two hospitals, in Warsaw and the southern city of Katowice, which will bring its total to nine, pending regulatory approval of its latest acquisitions. Romanian market leader MedLife is meanwhile looking to make acquisitions this year or in early 2020.

However the healthcare business is fraught with risk, with companies having no guarantee of recouping the large initial investments required for hospitals and clinics as the market becomes increasingly crowded and competitive.

Major challenges include finding and retaining staff, due to an emigration of doctors and other medical workers to western Europe, and rising costs for equipment and maintenance.

In the social context, meanwhile, some analysts warn the private healthcare boom could widen inequality in a region where, in many parts, those on lower incomes already have lower life expectancies.


Poland’s health ministry said it was working to improve access to medical services and cut waiting times, adding that spending on state healthcare was expected to rise by nearly 9% this year. The Romanian and Hungarian health ministries did not respond to requests for comment.

Public health spending in Eastern Europe is well below the EU average according to the latest European Commission surveys in 2017, which said the health systems of Hungary, Poland and Romania were underfunded.

Total health expenditure stood at 7.2% of GDP in Hungary, 6.7% in Poland and 5.2% in Romania compared with an EU average of 9.6%.

Many Eastern Europeans, whose net wages pale in comparison to Western Europeans’, even after rapid rises in recent years, have responded by shelling out their own money so they can cut waiting times for procedures or screening services.

Private health spending amounted to 2% of GDP in Hungary and 1.8% of GDP in Poland last year, comparable or outstripping wealthier nations like Germany at 1.7% and France at 1.9%, according to data from the Organization for Economic Co-operation and Development.

There is no comparable OECD data for Romania, the poorest of the eastern trio. However, private clinics there have also seen a surge in demand for services ranging from check-ups to complex surgery.

Romania’s private healthcare industry reached an estimated turnover of 11 billion lei ($2.6 billion) last year, up 13.8% from 2017, according to consultancy KeysFin.

MedLife, a barometer of the Romanian private health market because it operates the largest network of clinics, said it expected to exceed 200 million euros in revenue this year after making 170 million euros in 2018.


Lajos Fabian, chairman of Hungarian group MedAlliance Holding, which acquired the Robert Karoly Private Hospital in Budapest last year and plans further acquisitions, said private health was expanding at a “break-neck pace” in Eastern Europe.

“Patients are voting with their feet,” he added.

Vienna Insurance Group’s Hungarian division, Union, said private health cover was becoming an essential benefit for many employers to offer.

“In the current labor market environment, companies cannot afford risking the loyalty of their workers,” said Union board member Gabriella Almassy.

However the EU Commission says the high private health spending in Eastern European countries is leading to inequality in access to medical services.

This is deepening divisions in a region where lower-income people already have poorer health, according to analysts.

Life expectancy in Poland, Hungary and Romania remains below the EU average according to the latest health survey, which said inequalities in life expectancy by education level were “particularly large” in Central and Eastern Europe.

In Hungary, Poland and the Czech Republic, 30-year-old men with a low level of education, which the EU says is the most widely available socioeconomic indicator, can expect to live over a decade less than those with a high level of education.

“There is a layer of society, which will not be able to afford this (private health),” said Akos Ujlaki, an adviser at the Boston Consulting Group in Budapest. “If hot and cold water are not blended together in a structured manner, that will rip society apart.”

The gulf is more pronounced in Romania, where only a fraction of the population can afford private services. Private clinics in Bucharest are overrun with patients, while access to even state-funded care is limited in rural areas – home to almost half the population.

However, for many of those Eastern Europeans who can afford private care, it has become a necessity.

Michal Szolucha, a 29-year-old computer programmer in Warsaw, said private healthcare insurance was a crucial benefit for him to secure when negotiating with an employer.

“A while ago I suffered from persistent stomach pain and despite several appointments in the public service over a six-month period, no one carried out the tests I needed,” he said.

“However when I went to a doctor in a private clinic, within 48 hours all the tests were conducted and I got a diagnosis.”

(Reporting by Gergely Szakacs; Additional reporting by Alicja Ptak and Angelika Meczkowska in Warsaw, and Radu Marinas and Luiza Ilie in Bucharest; Editing by Pravin Char)