By Cristian Hotoboc, Président of the Romanian association of private health establishments (Palmed)
According to the most recent EY study which PALMED performs each year, Romania’s healthcare system is underfunded, at 6% Romania ranking amongst last in the EU in terms of percentage of GDP or level of healthcare expenditure per capita. The country’s health system is based on the social health insurance model, with the state having a major financing role through the National Health Insurance House and the Ministry of Health. The largest share of health expenditure comes from public sources (approx. 80%). The private segment finances approx. 20% of the health system, through direct payments by the population for access to health services, but also through medical subscriptions or voluntary insurance.
The system is mainly treatment-oriented, with prevention playing a secondary role. However, thanks to rising incomes, access to education and accurate information, prevention services have developed at a rapid pace in recent years. The private healthcare sector has played a significant role in promoting and raising public awareness of the importance of prevention through increased access to healthcare services and campaigns, especially during and after the pandemic period.
PALMED members represent significant players in the local market and subsequently in the national economy. Members have a wide geographical reach through their own locations and partner clinics, with an estimated market share of over 30% in 2022 (updated 2023 information will be available in February 2024).
Apart from the direct effects, private healthcare providers also have an indirect and induced impact on the Romanian economy. Thus, for every Euro generated in turnover, private healthcare providers generate €4.5 in turnover for the whole economy, for companies downstream or upstream in the value chain. Each Euro of gross value added created at the level of private healthcare providers generates an additional 1.8 Euro of gross value added in the Romanian economy, and for each additional million Euro of revenue, 55 new jobs are created in the Romanian economy.
The economic footprint of private healthcare providers extends beyond the directly observable effects based on company-reported figures. In terms of contribution to Romania’s Gross Domestic Product (GDP), if we consider the effects on the whole value chain (downstream or upstream companies), private healthcare providers generated approx. 2.5% of Romania’s GDP in 2020. Each job created by private healthcare providers results in 1 additional job being generated in the national economy, and the contribution to total taxes collected to the State Budget was €684 million (approx. 1.3% of 2020 tax revenues).
PALMED members contribute, through their social initiatives, to the improvement of the medical system in Romania, through the development of health services and the training of theoretical and practical skills of professionals which ultimately contributes to patients’ equality of access, quality of care and the sustainability of a challenged healthcare system.
Our Organization’s main priorities in 2024 are surely the kind any of our peers would relate to. As we assumed the organization of the EPHA2024 Gala in Bucharest, we intend to ensure a successful outcome of the event which would align with UEHP’s primary role of promoting the interests of the private healthcare systems in Europe as a alternative that has become indispensable… and we want to entertain all our visitors as well, while doing that 🙂
Secondly, contributing to the overall improvement of the Romanian healthcare system and related legislation by developing and promoting new legislative measures, best practices, procedures, innovative methods and ensuring adequate financing is one of our Organization’s permanent objectives.
Nevertheless, we intend to encourage the extensive use of AI solutions throughout all our members and partners, not only as a technological trend, but a transformative force that brings significant health benefits. AI can improve diagnostic efficiency and accuracy. Machine learning algorithms can quickly and accurately analyse medical images, identifying abnormalities that might be overlooked by the human eye. AI can help personalise medical treatments. By analysing patient data, AI can help identify the most effective treatments for each individual patient, thereby improving outcomes and reducing costs. AI can also improve operations management and cost efficiency. AI-based systems can optimise schedules, manage workflows and even predict staff and equipment needs, saving valuable time and resources. It is an opportunity that private healthcare providers cannot afford to miss.