How to reduce pressure on Hungary's public health care - Turkish manager proposes an alternative
How would you assess Liv Hospital Group's consolidated results for last year? Which figures would you highlight?
It is important to note that Liv Hospital Group is part of the listed holding company MLP Care, which owns 33 hospitals. Two of these are located outside Türkiye, one in Baku, Azerbaijan and the other here in Budapest.
The company, listed on the Istanbul Stock Exchange, is currently valued at USD 1.5 billion and the clinic in Hungary is our first step into the European market.
By the way, in 2023 we opened six new hospitals, a very successful year.
Are there any plans for further expansion?
We have ambitious plans to expand further in Europe, e.g. in Kosovo, where we have just opened a private hospital.
We expect to open hospitals in Austria, Germany and the UK by the end of the year.
We also plan to open units in Dubai and Georgia in the near future. So, the Budapest operation is an important step, but only the first in a series.
How would you assess your performance in the few months since the takeover?
Actually, not even a full year has passed since we entered the Hungarian market in October last year. According to the figures, we have managed to further increase our revenue growth and
professionally, one of the most important things we have achieved is that we have 24/7 patient care.
Previously, one of the biggest problems was that the hospital closed at 8pm and was also closed on weekends, with only maternity services operating. The motivation behind starting a 24/7 service was to ensure that patients could reach us at any time with their problems, that
if they were unwell at night, they could still get answers.
As for our patients, we can say that we are talking mainly about Hungarians, not about health tourists from abroad or expats working here. So our services are primarily provided to Hungarian people.
How has the range of services expanded since the takeover?
laboratory service. We have opened new departments and increased the number of physicians. Meanwhile, to talk about the business numbers:
our EBITDA margin almost doubled. But for the time being, it is far from a figure we would be satisfied with.
Turning to the Hungarian healthcare system, and within that the specificities of private healthcare, what would you highlight, given that there are experiences from other countries within the chain?
What I would highlight is that doctors in Hungary can work in several units at the same time, so they are not assigned to a single hospital.
There are many doctors who are on call at a clinic on certain days, working for a few hours. But this trend is not good for the quality of patient care.
Because if, for example, a patient comes in on a Tuesday and gets their care and comes back on a Friday, they can't see the same doctor.
This complicates the patient care process,
as it is possible that a patient may receive different professional instructions and ultimately be unable to decide which of the recommendations to accept in order to recover.
This is an area where you would like to see changes, am I right?
We need a patient-focused atmosphere and process organisation.
We need to have a doctor, and I say more, even a team of doctors standing by. After all, what happens when multiple risk factors are identified in a given patient. Then your doctor should be able to consult specialists in other areas in-house. For this reason alone it is reasonable to have specialists available within the walls of the institution.
So that's why I'm pushing for a full-time employment model, which will lead to higher quality patient care, higher revenues and therefore profitability.
What I would like to see is that a doctor in a particular department should always be available in the hospital, but there should not be just one.
However, I think this comes at a high price. Or are there other ways to change this behaviour of doctors?
This was also the case in Türkiye 20-25 years ago. They worked in the public hospital and did not like to commit themselves to a single private hospital. However, this situation began to change with the emergence of highly advanced private hospitals in Türkiye. I think this is also to be expected in the Hungarian market.
Are there any means that can move this forward?
Possible changes to the funding system and the introduction of a co-payment system.
This would allow patients to use their state contributions in private hospitals, and the private hospital could charge extra for the extra services,
but in return the doctor would be able to provide the same high level of care in the private hospital as in the state system.
I also think that
the number of places where a doctor can work at the same time should be limited to a maximum of two institutions.
In the current system, the patient needs to follow the doctor, this must be reversed. Of course, a prerequisite for this is that the hospital must be able to offer a high level of complexity in the quality of the services it offers to patients.
Do I understand that a high level of infrastructure and the investment to ensure that is essential?
Yes, this is a crucially important condition. The equipment, the technology used is key, but the doctor also needs to know that if he goes to a private hospital, in case of a complication, what specialists can help him in-house.
A skilled, trained medical staff is needed. Imagine going to a café and asking for an espresso. The barista says, "No espresso today, only cappuccino, come back in the afternoon". That's no way to deliver quality.
When I give this example of the coffee shop, it seems funny at first, but if you look at private healthcare, it's similar. In other words, you have to be able to offer all kinds of coffee, and the equivalent of this for our market is that
we have to have doctors from different specialties on standby at all times.
All of this needs to be done with a complex management system to guide the patient through the treatment.
Based on this, what would you consider to be the optimal number of staff?
Based on its capacity, this hospital could accommodate 100 full-time doctors.
Our hospital could generate EUR 4 million per month at its maximum capacity, a level we could reach. But I am aware that there are limits to this.
In doctor's hours worked, or do you mean something else?
What I mean is that private providers cannot provide services in all areas, such as oncology, chemotherapy or IVF [in vitro fertilization].
Any other interesting, unique phenomena you have noticed in the Hungarian market?
The other main surprise was how specialised the professionals were and how focused their care and knowledge was. The level of this is encouraging and surprising, but there are consequences. In other places, a doctor can provide and evaluate several types of care and activities, but here it works differently.
But the number of specialists is very limited, so I think that has to change.
One professional should be able to perform multiple professional tasks, be able to evaluate multiple imaging results. If we can make changes in this area, we can deliver patient care faster and ultimately benefit people.
You mentioned the use of co-payments. How does it work in Türkiye?
If the patient receives care in a private clinic, the private clinic has the option to charge the patient an additional amount of up to 90% of the state funding in exchange for extra services.
Therefore, it is in the private hospital's interest to take on the patient's care from a financial point of view.
The system has been sophisticated in that different categories of hospitals have been differentiated according to their level of quality, and some have been allowed to charge an extra 200%, while others have charged only 50%.
It is important to note that the patient still pays less than if he or she had used the service at market prices without the state subsidy. This has opened the door to private hospitals and at the same time
reduced the strain on the public health system, which is reflected in a reduction in waiting lists.
At the same time, it has further boosted competition between private providers and clinics have begun to compete more vigorously with each other in terms of quality of service.
Do you expect this kind of shift in health financing to happen in Hungary too?
This is inevitable.
People should be given a choice.
The example of Türkiye can serve as a good model and is successful.
It is worth mentioning that for some services, the full cost is paid by the state, for example for important organ transplants. This has also increased the number of patients treated and given doctors more experience and practice. The system has evolved to the point where Turkish doctors now train or advise doctors from other countries.
On the private provider side, is it not a barrier if the state says it will not increase funding for patients on social security, i.e. it will not bill private companies at actual cost?
Such a new model could be introduced in two ways. If the state says that it will only fund a small part of the real costs, i.e. it does not update the funding items, hospitals could ask for extra fees in exchange for care. Hospital management then calculates the realistic price.
In many cases, these services may be loss-making because they are not priced too high by hospital management, which values the increase in patient volume as an important factor. Another way is that the government restores funding for care, funding interventions at a level close to the real cost to patients, but limiting take-up.
The private health care provider will look at the amount of money it receives for the care, and if it is an economically viable amount, it is worth taking the plunge.
The government simply needs to reduce the pressure on the state system and this is a quick fix to that.
Make no mistake, private market players have to be made interested in this.
What investments do you plan to make in the private clinic in addition to the current ones?
All developments are made so that when a patient comes to the hospital, they know that they will be cared for here, they don't have to go elsewhere for whatever health issues they might have. Once the patient comes through the door, they should be kept here for any care that is medically necessary.
That's the key, patient retention.
We must therefore have all the departments that the law allows. And an important aspect is that we need to have doctors working here full-time. All this is supported by basic systems, our own laboratory, and radiology departments, for example.
Overall, we want to be the hub for one-stop healthcare solutions.
In this respect, the primary investment for us is not the infrastructure, but the people, the highly skilled professionals working here. Hungarian people should be able to access complex services such as cardiology, oncology and infertility treatment in private hospitals.
We are planning a comprehensive tumour centre with weekly oncology team meetings to determine the best possible treatment plan tailored to the patient.
We also plan to establish centres of excellence in different departments.
Among our investments, we have also invested in robotic knee and hip surgery, and we became the first private hospital in Hungary to perform robotic knee prosthetics.
How focused are you on foreign patients in your business?
No hospital can be successful until it meets the needs of local people.
Hungarian patients must be satisfied first and foremost. This is the basis on which we can become a respected and reliable hospital, which is the basis on which we can attract international patients.
Talented doctors are available, and we are working to lure back more doctors from abroad to return to the Hungarian healthcare system. Of course,
this would also require the state to grant licences to private clinics to provide additional services.
Do you have a personal goal for the clinic?
I have a dream: to publish at the end of each year a book evaluating the professional performance of our departments according to various indicators: success rates, number of special operations, publications, number of international articles. These can also show in time where we have progressed from over the years.
Such transparency would change the state of the race. There are already examples of this in our hospitals in Türkiye, and I would like to do the same in Budapest. We can start this gradually, even with a few departments this year.
Another important goal is to obtain an international accreditation, such as JCI Accreditation. For international patients, such recognition is a sign of real achievement.
I am optimistic and hopeful that this private hospital will be a model that will set an example for other players in the private healthcare market.
Ultimately, the winners in this process will be Hungarian patients.
This clinic in Budapest is the first important step in a long process in Europe, so I attach great importance to this hospital.
Cover photo: Valter Berecz, Portfolio
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