Unregulated markets: red flag or opportunity?
We hear that Europe’s biggest unregulated healthcare market is overhauling its healthcare system to clamp down on ‘pirate’ operators in the legally grey area of nursing homes. But the problem is seen across many sectors and many emerging markets generally where regulation is lacking.
The Russian government is rolling out a system of tariffs and quality controls nationwide while the capital is replacing its Soviet-style nursing home stock with new facilities provided by for-profit operators. Implementing barriers to entry will put an unwelcome spanner in the works for Russia’s ‘pirate’ nursing home market, which exploded when the government made it legal for non-state operators to build homes.
Big, cheap operations run by tax-dodging businesses hiring illegal workers are routinely shut down by the state, but make up most of the private market – 15,000 beds out of a total for-pay market of 20,000. Moscow’s changes will force such operations to become legal or fold, putting many out of business. Russia could be seeing the winding down of the ‘grey’ market, and an end to poor quality healthcare – and crucially as a result, also seeing the beginning of foreign interest in the sector.
The same issue can be seen in the country’s acute hospital and plastic surgery sectors. A clampdown on pirate operators in the latter is the real deal, we are told, due to political pressure from rich Russians who’ve had botched jobs.
This isn’t just happening in Russia, of course. And whether it is primary care or IVF in India, nursing homes in Brazil, diagnostics in Nigeria or wellness anywhere at all, healthcare operators adhering to international standards say weak regulation is the main problem they face – and strong regulation what they need to see potential in a market.
In most cases, even where there are opportunities, a lack of regulation is a red flag to many operators or investors looking at entering a market. But not all: some position themselves as an accredited facility with a premium brand name – and charging a premium price to those seeking international-standard healthcare. Capturing international patient volumes through referral offices in these countries is basically this. But this requires patients to have some understanding of what decent healthcare is – which is often not the case.
We would welcome your thoughts on this story. Email your views to Cameron Murray or call 0207 183 3779.
