Stalwart Turkish player enters Hungarian private clinic sector with special plans

The key players in the private healthcare market will all be present at the Portfolio Private Health Forum 2024. The event will be announced soon on the Portfolio Conferences page, but in the meantime, mark your calendars for 26 September (Thursday), Marriott Hotel.

Let's start with why the Hungarian market might be interesting for a Turkish hospital chain. How has private healthcare in Turkey evolved so that it is now expanding further west?

I started my professional career in the health sector in 1990, and in the 34 years since then I have been mainly in management. I mention this because it was the period when private healthcare started growing in Turkey. At the time, Turkish private healthcare did not provide every service, especially for high-risk cases, and not many types of diagnostic care were available privately.

At that time, I had the privilege to follow the life of a professional private clinic in Istanbul as a manager, supported by an American consulting firm, and through this we learned a lot about healthcare management, while I also did an MBA course in healthcare management. This led to the first major hospital chains in the country, and we are now part of the largest of such networks.  

How big is the hospital network and what should we know about it?

In Turkey, 29 hospitals are run by MLP Care, to which the Medical Park and Liv brands belong to. Within that, the Liv network operates 19 hospitals – Liv Duna Medical was the 19th hospital opening for me.

We launched the first hospital on the European side of Istanbul from scratch in the life of the Liv network, and since then we have not only expanded in Turkey, but in 2022 we entered the Azerbaijani market, building a private clinic in Baku.

The group employs 22,000 people and we work with 2,900 doctors. 12% of our patients come from abroad, but they account for 40% of our revenue.

So, if I understand correctly, the Turkish private healthcare sector started to develop sooner - there may be similarities with the development of the Hungarian market.

Yes, the Turkish private healthcare market started to develop earlier: until the 1980s, private providers were only able to perform minor interventions. There were smaller clinics, operating with very few services, diagnostic capabilities and treatment options. However, when international hospitals arrived in this market, the expansion really took off thanks to increased competition – we are now talking about the early 2000s.

Why was the Turkish market attractive to foreign investors at the time?

It was attractive because of the private healthcare sector, a large population, the demographic trends, as well as the ageing population. Significant growth was seen in this sector by those involved at the time. Private hospitals started to develop, more and more licences were obtained, they made all types of advanced diagnostic care and treatments easily available, and at the same time, private hospitals became more and more attractive for doctors and surgeons.

After 2005, the established brands, and the advanced infrastructure and care they provided became attractive to international patients alike. Health tourism has taken off.

And not just hair transplantations either – over time, advanced care as well: cancer treatment, obesity surgery, stem cell treatments, transplants, robotic surgery. Initially, only patients from neighbouring countries came to Turkish private clinics, but now patients from the United States and Canada are also coming, partly because of the new technologies and innovative treatments, but also because the legal framework is more permissive for certain treatments than in their own country, for example stem cell transplants.

Is there a price advantage to a Turkish private clinic?

It is true that

our prices are more competitive than in Europe or in the United States.

It was an important aspect during the years of the Covid-19 pandemic that Turkey did not close its doors like other countries, so the Turkish hospital infrastructure became the choice of many international patients. This gave new momentum to the development of the Turkish private healthcare market.

Why did you choose Hungary, and Duna Medical Center in particular?

Hungary is famous for its outstanding doctors, specialists and medical education. We also saw that

Duna Medical Center was built as a private hospital from the get-go, there are no other functions in the building, everything is dedicated to patient care.

It is an infrastructure that can be successful with our management skills and the network behind us, and of course with our Hungarian doctors. If all this is readily available,

why not bring advanced and high-risk care to the private hospital scene in Hungary - for example, cancer treatment or even emergency care.

Would you build on this for the care of foreign patients?

Yes, if these strong foundations are in place, it could certainly attract foreign patients. We are targeting certain local and international markets in the initial phase of launching the new brand. We can indeed compete for foreign patients with the Hungarian clinic against private hospitals abroad.

Was it important for you to enter an EU Member State for international expansion?

It wasn't our focus, but rather finding a good location, a suitable infrastructure, and a trained professional staff.

Eastern Europe is a good target because we see a lot of opportunities in this market, the privatisation of healthcare in these countries is not yet complete, and the take-up of private healthcare is only just beginning.

In the meantime, we can see that there are long waiting lists in Hungary within the public healthcare system, and the Hungarian private healthcare system does not offer a holistic approach to services.

Is this how Liv Duna plans to differentiate itself from existing participants in the Hungarian market, by offering new benefits that have not been available at private providers so far?

Yes, our aim is to offer patients the widest spectrum of care, and this building is perfectly suited for that. The goal is to be able to treat high-risk cases, with an in-house multidisciplinary team. This is important, because the current situation is that in many cases, if something goes wrong during an intervention in a private hospital, the patient ends up in the public health system.

Our aim is to have every speciality under one roof with us; this way, anything the patient needs is available, and the doctors involved work together as a team in order to get the best outcomes. Patients won't have to go to several places for one problem, they can get the care for their condition in one place.

If, for example, an elderly patient has a hip replacement surgery with us, but in the meantime, it comes to light that they also have diabetes and heart problems, it's no longer just orthopaedic care. We also need support from a cardiologist, a diabetologist, and a dietician during the stay in the ICU.

It's a long and complex process and we want to ensure that on this patient journey, the patient receives the highest quality of medical care, all in an environment you would expect from a five-star hotel.

And in the meantime, I suppose time is of the essence for the patient.

Yes, because patients also prefer private hospitals – whether for neurosurgery or paediatric surgery – because the expertise, the high quality and the comfort of care are almost immediately available.

Does Liv Duna also have the necessary licences for these new procedures?

We are already licensed for many procedures, but

we are planning to obtain licences from the state authorities for additional services, which will allow us to open new departments,

such as the paediatric outpatient department, new surgical departments and emergency care.

The more complex, high-risk cases are obviously more expensive for an investor, so the question arises whether there will be sufficient demand from private patients in Hungary and how the return works out.

We are experienced investors in the Hungarian market who can and do think long-term.

This comes from our professional background and history. We do not want to rush anything, we are not in a hurry; we want to create more value in Hungarian private healthcare, and to do this, we need to invest more time, money and energy.

Healthcare is not about short-term investments

– nevertheless, there are payback figures of course. We are also ready to enter into new partnerships to serve the public as much as possible.

Do you also expect to eventually receive public funding for the patients you treat at LIV Duna?

Should this happen, we are ready for it; we have the capacity and the knowledge to do so.

This system already works in Turkey, where a patient can receive state-funded care in a private clinic at the expense of social security.

This also prevents waiting lists from getting out of hand. There are many details here that need to be clarified, but for example, if the state social security system pays the state hospital $1,000 for the care of a patient, why not pay this to the private clinic and then it is up to the clinic to decide what extra charge to make for the extra services. Ultimately, the patient pays less privately because the private hospital also receives public funding for the patient. This is good for the public funder as well, since the private clinic’s capacity is better integrated into patient care, thus resulting in less strain on the public system: it is worth looking at private health care as a complementary service in this respect. The more licences private providers are given to do this, the more infrastructure there is available to care for patients.

Private Health Forum 2024
The key players in the private healthcare market will all be present at the Portfolio Private Health Forum 2024. The event will be announced soon on the Portfolio Conferences page, but in the meantime, mark your calendars for 26 September (Thursday), Marriott Hotel.

Let's return to the Hungarian market for a moment. What surprised you the most about Hungarian private healthcare?

Perhaps the most surprising thing for me was that it is not so common for doctors in Hungary to work full-time in private clinics. Professionals go from one hospital to another. In Turkey, 95% of doctors spend their full time in one hospital, which makes the service faster and more reliable. Our aim is to achieve the same in Hungary, which is to be available for certain services 24 hours a day, 7 days a week. Continuity of service is very important to us.

What do you think is the reason for this?

I think some doctors do not trust private providers, and in many instances, high-risk cases and interventions are only found in public health care. We also have to recognise that in many cases, the public infrastructure is very good – in some specialties, it is quite excellent and could be competitive in Europe too. Our aim is that the doctor, even if they split their time between the public and private systems, preferably sticks with a single private provider.

Let’s talk about patients: is it a goal to fill the clinic’s capacity with international patients?

We would like to serve both local demands, as well as the international market. Hungary, especially Budapest with this beautiful riverside location is the perfect infrastructure for providing excellent, high-quality care for patients from Western Europe, too.

Will there be competition for Hungarian doctors or will specialists from Turkey also come to the Liv Danube?

We want to employ Hungarian doctors, but it is not unprecedented that we are attracting Hungarian doctors from Western Europe, because they recognise that a similar service can be provided here. We want to reverse the exodus.

What is the capacity of the hospital, what are the plans for Budapest?

In the outpatient department we can treat a total of 120,000 patients a year, and our aim is to fill this capacity.

What is the background to the operation of the hospital, how does the Turkish investor relate to the existing owner?

The Ukrainian owner still owns 100% of the shares in Duna Medical, we have only taken over the management of the building and the hospital.

Cover photo: Ákos Stiller, Portfolio