The private healthcare sector across CEE has been expanding at a remarkable pace, reshaping the way people access and experience medical care.
Article contributors:
- Darius Paulikas, Head of Medical and Pharmaceutical Law, Widen
- Doina Doga, Head of Life Sciences, ACI Partners
- Elena Todorova, Counsel, Schoenherr Bulgaria
- Indrikis Liepa, Partner, Cobalt
- Roman Pecenka, Partner, PRK Partners
- Zrinka Vrtaric, Attorney at Law, Deloitte Legal
Willingness To Pay for Premium Services
Demand for private healthcare services has surged over the years, fueled by rising incomes and growing health awareness. In Bulgaria, it has been driven by “a rising standard of living and increasing demand for high-quality medical services, shorter waiting periods, and more personalized care,” Schoenherr Counsel Elena Todorova explains. “Private healthcare facilities are equipped with modern technology and offer a broad range of specialized treatments, many of which are unavailable in public hospitals.”
A similar trend can be observed in the Czech Republic, where the demand for services outside the public health insurance system has grown steadily. According to PRK Partners Partner Roman Pecenka, “the aging population plays a significant role, as it increases the demand for healthcare services in general and particularly for chronic disease management, long-term care, and rehabilitation services.” Additionally, people are showing a “willingness to pay for premium and personalized healthcare services.”
Digital transformation is another significant driver. “Innovations like telemedicine, electronic health records, and AI-driven diagnostics are becoming increasingly integral to healthcare delivery,” Pecenka notes. The shift toward preventive and personalized medicine is further reshaping the industry. “We are seeing greater emphasis on wellness programs and treatment plans tailored to the unique needs of individual patients.”
“Although public medical assistance in Latvia is meant to be available to all residents, this is far from the reality,” Cobalt Partner Indrikis Liepa highlights. “Insufficient public funding and questionable efficiency result in interminable queues for popular diagnostic checks and medical procedures.” Meanwhile, private healthcare institutions are appealing to “more demanding customers who are willing to pay for quality service or prompt attention.”
Similar gaps exist in countries like Lithuania, Moldova, and Croatia. In Lithuania, “while public institutions often struggle with long waiting times and operational inefficiencies, private providers offer faster, more tailored services,” Widen Head of Medical and Pharmaceutical Law Darius Paulikas says. “Many patients, particularly from urban areas like Chisinau, prefer private clinics to avoid long waiting times, outdated equipment, and impersonal care often associated with public healthcare,” ACI Partners Head of Life Sciences Doina Doga adds on Moldova.
Yet, both Paulikas and Doga stress that private healthcare remains primarily accessible to those with higher incomes. “As per the last available data, around 84.2% of the population relies on public healthcare services, while only 15.8% uses private healthcare facilities,” Doga says.
In Croatia, on the other hand, Deloitte Legal Attorney at Law Zrinka Vrtaric highlights that “the government collaborates with private providers to reduce the strain on public facilities, and more Croatians are purchasing private health insurance, which makes private care more accessible to the middle class.”
Health Tourism: A Catalyst for Growth
Health tourism is emerging as another significant growth factor. In Croatia, the affordability of private healthcare compared to Western Europe is a major draw for both local and international patients. “Private healthcare in Croatia remains much cheaper than in Western Europe, making it an attractive option for both locals and medical tourists,” Vrtaric explains, adding that the sector’s growth is evident, with private healthcare accounting for 12% of the total market and expanding at a double-digit rate annually.
Bulgaria, too, has become a hub for medical tourists. “Bulgaria attracts around 50,000 medical tourists a year, many of them from neighboring countries or the Middle East,” Todorova adds. Similarly, Moldova is “a destination for international patients seeking high-quality, affordable services, particularly in dental care, fertility treatments, plastic surgery, and ophthalmology,” Doga notes. “The establishment of the Moldovan Medical Tourism Association in 2021 has further bolstered this trend, actively promoting Moldova’s medical services.”
The Czech Republic is “recognized for its affordability and high-quality services in areas such as dental care, plastic surgery, and spa treatments,” Pecenka points out, adding that “this reputation will likely continue to attract international patients, further boosting the sector’s growth.”
The Growing Pains of a Thriving Sector
Despite robust growth, the private healthcare sector faces some challenges. Todorova notes that challenges are typically related to “shortages of qualified medical professionals and low wages for young professionals.” She emphasizes that “according to media reports, around 1,500 medical students graduate each year in Bulgaria,” yet “around 60% of graduates choose to stay to practice in the country, while the remaining 40% seek opportunities abroad.”
Doga and Pecenka draw attention to the disparity between the public and private sectors. In Moldova, “the public sector often struggles to retain medical professionals due to less competitive salaries and working conditions, leading many specialists to transition to the private sector,” Doga notes. Likewise, Pecenka says that in the Czech Republic, workforce shortages lead to “intense competition for doctors and nurses between public and private providers further straining the system.”
In Croatia, “many doctors work in both sectors, but since private clinics often pay better, they prioritize their private patients,” Vrtaric adds. “This means fewer resources and longer waiting times for those relying on public healthcare.” Croatia also “struggles to retain qualified doctors and nurses, many of whom leave the country for better pay and working conditions abroad.”
“The gap in access to healthcare between urban and rural areas is also a challenge,” Todorova highlights, as “most private facilities are concentrated in the large cities.” Doga also stresses that “approximately 75.8% of private medical institutions are located in cities, particularly in Chisinau, the capital. Consequently, rural populations and individuals with limited financial resources face significant barriers to accessing private healthcare.”
In Lithuania, “young doctors and nurses are increasingly choosing major hospitals in bigger cities and are less likely to work in regional hospitals, exacerbating staff shortages in rural areas,” Paulikas adds. “This imbalance, combined with a declining interest in nursing as a profession, poses long-term challenges for both public and private healthcare providers.”
Consolidation: A New Chapter
Across the region, consolidation is the name of the game. Over the past ten years, in Latvia, “the consolidation of private healthcare providers has become evident,” Liepa points out. “It began with pharmaceutical wholesalers acquiring independent pharmacies, creating vertically integrated pharmaceutical product distribution chains. This was followed by a few of these distribution chains expanding into the healthcare services sector by acquiring existing or establishing new private healthcare institutions.”
In Bulgaria, “this is typically driven by the need to achieve economies of scale, to expand service provision, and to improve operational efficiency,” Todorova says.
The Czech Republic is also seeing a significant shift toward consolidation. “First, economies of scale play a significant role,” Pecenka says. “Larger healthcare groups can achieve cost efficiencies by streamlining operations and negotiating better terms with insurers and suppliers. Additionally, the sector is attracting interest from private equity firms and strategic investors.”
Another key driver is market positioning, Pecenka adds. “By consolidating, providers can expand their geographic reach, diversify their service offerings, and strengthen their brand recognition.” Lastly, he says, “regulatory pressure is also a factor. Larger, well-resourced organizations find it easier to meet stringent healthcare regulations and quality standards, giving them a significant advantage over smaller, independent providers.”
In Croatia, the consolidation trend is motivated by the need to streamline operations and invest in advanced technology. “Consolidation allows providers to offer a wider range of services under one roof, making them more appealing to patients,” Vrtaric concludes.
This article was originally published in Issue 11.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
