Analysis of the medical services market

Medical services could only be obtained in state institutions and, of course, free. But, of course, if the patient wanted to be treated more carefully and attentively, and the services provided faster and better, he could get it for money. Another thing is that such payments were completely shadowy and were legalized only during the next decade.

In the zero years, patients’ interest in private clinics and the gradual introduction of bills regulating the activities of commercial healthcare facilities formed the market for paid medical services in the form we know now.

Over the past two decades, stagnation processes have taken place, but in general, consumer demand has steadily increased every year. Currently, the share of private clinics is about 40% of the total number of medical institutions in the Federation.

In this article, we will talk about the current realities and trends in the Russian commercial medicine market and how it has been affected by the COVID-19 pandemic.

Factors in the development of the medical services market

According to experts, the commercial medicine sector will develop shortly due to the following factors:

  • active investment in the opening of new multidisciplinary centers;
  • development of traditional health care providers in large cities;
  • expanding the range of services in existing commercial clinics;
  • enlargement of networks of private clinics, opening of new branches;
  • consolidation of small players with large-scale network companies.

Even though the COVID-19 pandemic is currently ongoing, the owners of national networks are not afraid to invest actively. The bet is that investments are guaranteed to pay off many times over thanks to the expansion of the presence in the compulsory health insurance system – the state will increase the number of quotas and reduce tariffs.

An increase in the number of mergers of small players with federal companies is predictable since it is becoming increasingly difficult for single small clinics to compete with networks.

The so-called retailization of medical services deserves special mention. With the development of telemedicine, patients can receive many medical cares remotely. Even though the list of diseases that do not require a face-to-face meeting with a specialist is extensive, this forecast no longer seems utopian.

Advantages of private clinics over public healthcare facilities

The constant sustainable development of the commercial medicine market is also due to the strengthening of the competitive advantages of private clinics over state healthcare facilities, including:

  • expanding the range of medical services provided, including rare, highly specialized areas;
  • development of diagnostic capabilities;
  • introduction of new treatment technologies with proven high efficiency;
  • provision of remote consultations;
  • training and expanding the qualifications of full-time specialists;
  • improving the quality of service;
  • development and popularization of medical and health tourism, which today is possible only on a paid basis.

The obvious advantage of private clinics over budget healthcare facilities, which should be taken out in a separate paragraph, is their obvious demand among the young solvent generation. Its representatives lead a healthy lifestyle, take care of their health, want to receive high-quality medical services, and are ready to pay for them. In this context, paid medicine is prepared to offer much more than state institutions.

The active participation of retail clinics in the system of compulsory medical insurance in the direction of high-tech care also contributes to the development of the paid medical services market. Here it should be taken into account that this is ensured through the active participation of the state itself.

The access of commercial organizations to the system of state guarantees is being simplified, and the pricing within the CHI is becoming more and more transparent.

New directions and trends in the development of the commercial medicine market

Below we list the main directions for the development of the paid medical services market and related industries:

  1. The emergence of new medical specialties, therapeutic and diagnostic techniques, and the active demand for them. In this regard, Russia is in line with the global trends declared by the WHO.
  2. Many Russian doctors are regular participants in leading domestic and foreign conferences and respected members of the international medical community. Also, our specialists actively participate in dialogues in the fight against rare, difficult, and incurable diseases.
  3. “Rampant” digitalization. With the popularization of the healthy lifestyle trend, Russians are becoming increasingly literate in improving quality and life expectancy.
  4. Here, we can talk about the development of telemedicine and the growth of personal portable gadgets that will allow you to monitor vital health indicators online. In other words, people can control their health on the go. Diagnosis of diseases at the same time will improve and be more timely.
  5. Development of gerontology and care for elderly patients with limited mobility at home. As life expectancy increases, so does the demand to maintain its high quality for as long as possible.
  6. This region is underdeveloped compared to the United States and most European nations. However, commercial nursing homes, rehabilitation centers, and palliative care clinics are growing yearly. To date, these services are designed for a very limited audience segment; in the US and Europe, these services are paid for by the state.
  7. However, the demand for such services is slowly growing and far outstrips supply. Active cooperation between specialized commercial organizations and the state will help solve the situation and meet the market’s needs.
  8. Development of biohacking. There is a growing interest of a young solvent audience in lifestyle products that improve the quality of life and slow the aging process as much as possible. This is fitness, the preparation of proper nutrition programs, and following current trends in healthy lifestyles in general. The main idea is to maintain the state of health at a consistently high level and not be treated.
  9. In addition, already today, in some pharmacy chains, high-traffic shopping malls, railway stations, airports, and mobile points, you can quickly make some types of diagnostics, check your eyesight, and even undergo mandatory vaccination. With the development of this trend, it is expected that the range of screening services that can be obtained at any convenient place (not in a specialized clinic, but just on the way to the cinema) and within an hour will expand significantly.
  10. Re-profiling “non-core” facilities into large-scale medical and diagnostic centers. It sounds somewhat romantic, but some experts note the promise and special logic of profiling medical institutions in the shopping mall with high traffic.
  11. With the development of online trading, shopping centers will no longer be of interest to tenants, many of which will go into the format of online stores. The logical decision for the owners is not to sell the empty areas but to convert them into large-scale medical centers. Convenient location, high transport accessibility, and spacious parking are not fundamental but important factors that will attract many patients.
  12. Employers own private medical centers. Many large companies within the framework of VHI organize high-quality medical examinations and screenings for their employees, depending on their health status and age. The next step is to open our medical clinics.

Impact of the COVID-19 pandemic on the medical market

During the acute period of the coronavirus pandemic, most patients avoided visiting medical facilities, particularly multidisciplinary ones, due to the high risk of infection. This circumstance strongly impacted attendance at public healthcare institutions, which implemented state programs to prevent and treat COVID-19. In addition, people who had not been ill were afraid of contact with possible infected people and temporarily refused planned free medical care.

In addition, many public health facilities were redesigned as COVID hospitals, whose employees underwent emergency training and were sent to fight COVID-19. Due to this forced measure, there was a shortage of free narrow specialists for some time.

The pandemic of coronavirus has also affected retail clinics. According to open-source data, until the widespread introduction of the state of high alert in the spring of 2020, the medical market was confidently outperforming its development indicators over the past year. But in April 2020, the demand for paid medical care collapsed by half.

Many were left without work or lost part of their income and could not afford paid treatment. In addition, even regular paying patients temporarily refused to attend retail clinics that provided CT and MRI services for patients with severe COVID symptoms.

However, precisely since due to profiling, there was a shortage of narrow specialists in public health facilities, and retail clinics still offered all types of medical services, coupled with high-quality anti-COVID prophylactic measures, the development indicators of the paid medicine market began to recover gradually.

Today, every fourth citizen of the Russian Federation prefers you paid medical care to be free.

Demand statistics for different types of assistance

With the introduction of the high alert regime, the demand fell primarily for planned medical care – outpatient and inpatient. At the same time, the services of commercial laboratories have become very popular.

According to PwC statistics, paid medical care has risen in price over the past year by an average of 7.6%. Due to the widespread refusal to visit medical facilities during the height of the pandemic, private clinics experienced a decrease in revenue. In addition, some heads of commercial medical facilities note that the number of patients of retirement age has especially decreased.

The pandemic has activated the mechanism of deferred demand in patients with chronic diseases in remission and non-acute conditions. As a result, many of them have postponed scheduled and preventive medical examinations from March to September 2020.

It is not surprising that the almost six-month lull, coupled with the regime of self-isolation, provoked a surge in the “popularity” of the services of dentists, oncologists, gynecologists, psychotherapists, psychiatrists, neurologists, rheumatologists, and orthopedists. The latter were mainly treated by elderly patients. whose chronic diseases of the musculoskeletal system became exacerbated due to forced long sitting at home.

Instead of a conclusion

Consumers of paid medical care are becoming more and more demanding. Therefore, in addition to the impeccable quality of patient services, the quality of service, time savings, and the possibility of using digital solutions have become important.

The paid medical services market suffered significant losses due to last year’s self-isolation and lockdown, and the commercial dentistry sector was especially affected.

However, in most medical industries, visits to specialists in the middle price segment and economy class returned to pre-pandemic levels by autumn. Premium services, aesthetic medicine, and plastic surgery are still experiencing some decline in demand. However, in the absence of economic cataclysms, there is every chance that by 2022 the situation will even out.

The forecast for the further development of the paid medicine sector is as follows: in the long term, it will be represented by a moderate number of multidisciplinary medical centers in the premium price segment and a large number of highly specialized clinics (ultrasound studios, family planning centers, dentistry, etc.).