HBI Deals+Insights / Healthcare Reform

FROM “it’s private it must be bad” to “Hmm, this is a strategically important industry”

The way politicians and policymakers view the private healthcare sector is likely to change quite dramatically over the next five years.

We shall see a move away from “It is private, it must be bad” to “maybe this could save us money” and even to “Hmm, this is a strategically important industry which is important to the economy.”

Today most academics (and academics are usually the folk who inform policymaking) are fairly left wing. In Spain, France and the UK, most academics have a default position that the private sector is bad. The idea of someone making a profit out of healthcare remains morally suspect.

It is interesting to note, for instance, that no Spanish academic has been prepared to conduct an objective review of the Alzira experiment, where an entire region was taken over by a private consortium led by healthcare insurer Adeslas. Alzira has been going on for over a decade and it is frustrating that academe, which should be open-minded, is not even prepared to seriously measure what has happened. Recently, the Valencian government has initiated such a study, but the politician behind the study has pre-empted its findings by saying that the objective is to demonstrate that the public sector works best!

I think that this view is changing in Germany and the Netherlands – Maastricht University and the Institute for Healthcare Economics in Munich are prepared to look at private healthcare dispassionately.

Currently, I would say that no government in Europe looks at private healthcare in the way in which they look at, say, IT, biotechnology or film-making.

Take Hungary. I recently tried to find someone (anyone) in the Hungarian government who was prepared to talk to me about its huge private dental business which is worth €400-500m a year. No one seemed aware of the sector or its importance to the failing Hungarian economy. They knew about the much smaller biotech and medtech industries, but dental tourism was a complete vacuum. In the same way, I doubt that many German politicians appreciate the size of the private sector in Munich, now Europe’s capital of acute care, having long ago left London’s Harley Street in its wake. Yet it must be worth several billion euros a year in exports to East Europeans and the Middle East.

The catalyst for real change is when governments wake up and smell the coffee as recession bites.

This will change over the next decade as governments start to appreciate the importance of healthcare tourism. Of course, the Thai government, which claims 1 million healthcare tourists a year, is already well aware of this already. And I hear that the Turkish government is beginning to pump money into promoting its hospitals as a regional hub. So is Cyprus and Malta. A Hungarian told me the other week of a conversation with a government minister, who when told how much export sales the dental business really generated (“what you really mean billions of Hungarian florints, not millions?!”) started to understand its importance.

But we also need some dispassionate, apolitical evaluations of the claims made for private healthcare and whether they are really true.

I talked today to Arturo Alvarez, a former academic, now at Tecnicas de Salud, the foremost consultancy on healthcare in Spain and he told me that a Pan-European book on private/public healthcare projects is now in the works which will probably include a look at Alzira alongside private/public projects in Portugal, the Ukraine and elsewhere. He is writing this with Richard Saltman, a US academic at the Rollins School of Public Health of Emory University in Atlanta, Georgia who specialises in private healthcare in Europe. Sadly, the aim is not to measure efficiency, but to merely look at how stakeholders work together in such projects. I guess it is a start.

We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.