According to an analysis by EY, the Polish healthcare service market is projected to grow at a rate of 11% per annum until 2028. This rapid development is driven by increasing public and private funding, resulting from rising wealth and an aging population, as well as an increased emphasis on preventative care. These factors attract investors, as the rate of return in the healthcare sector is higher than in other sectors.
The Polish healthcare market is undergoing significant transformations. Demographic and social issues are reshaping specialised treatment and enhancing the importance of preventive medicine. This sector includes diagnostics, fitness, physiotherapy, mental health, dietary support, and general well-being. As prevention costs are lower than treatment costs, preventative medicine is being promoted by the state. Furthermore, it is attracting increasing interest from patients themselves, due to the improved quality of life and reduced chronic diseases it offers.
“Demographic and social changes, including an ageing population and a longer working life, are leading to an increase in chronic civilisational diseases. Awareness of the importance of healthcare and prevention is growing, and the increasing wealth of Poles means that we are increasingly willing to invest our own health. This is causing the healthcare market to grow at a rapid pace that most other business areas can only envy,” says Paweł Bukowiński, Managing Partner for Strategy and Transactions at EY Poland.
EY estimates show that the healthcare market will grow at 11% per annum. The growth of expenditure in this sector will be driven by increased public funding, due to steadily rise until it reaches 7% of Poland’s GDP in 2027, and private funding, which is expected to grow an average of 8% per annum.
For now, the Polish healthcare market is rather fragmented, but a clear consolidation trend is evident – from 2015 to 2024, the number of mergers and acquisitions increased by half. Hospitals and medical centres are leading this trend. Recently, dentistry and diagnostics are also seeing consolidation. Between 2021 and Q1 2024, there were 16 transactions in the field of dentistry and 9 in diagnostics, compared to just one and three transactions, respectively, in the period from 2015 to 2017.
“I expect further market consolidation, which will allow for increasing the profitability of such entities and for new industry players to enter the Polish market. Transactions that are in the pipeline look promising, particularly in the area of hospitals and medical centres, as well as the pharmaceutical sector, especially R&D centres,” says Jacek Byrt, Partner at EY-Parthenon in Strategy and Transactions team at EY Poland.
The development of the healthcare sector is also being driven by technological advancements which accelerated during the COVID-19 pandemic. Telemedicine and the Internet of Things (IoT) in medicine have changed patient expectations. EY experts emphasise that 37% of Poles prefer online doctor visits, and 75% want to renew their prescriptions online.
“The development of telemedicine means that the number of physical doctor visits may decrease by almost a third, which gives hospitals a cost reduction of 23%. In parallel, the development of the Internet of Things in medicine allows for remote patient monitoring and management of chronic diseases. This revolution in patient management benefits both the patients themselves and the providers of medical services,” says Jacek Byrt.
IoT products include medical implants, smart pills, smartwatches, and home emergency devices. This market is set to grow and is expected to reach a global value of over 300 billion USD by 2030.
“With its central location in the European Union and access to highly qualified specialists, Poland is an attractive place to locate the production of IoT in medicine,” says Jacek Byrt.
Another opportunity for Poland is the development of contract services, particularly as the process of drug development and production, including clinical trials, is complex. The global contract services market is worth about 200 billion USD and is growing at a rate of 6% per annum, and 7% per annum in Europe. A group of experienced specialists working in numerous Contract Research Organisations (CROs) and R&D centres is another competitive advantage of Poland.
“Poland successfully implements technological innovations, which, combined with broad access to qualified specialists, makes our country an increasingly significant Tier 2 medical equipment manufacturer. The total production of medical equipment in Poland amounts to about 3.4 billion EUR, and exports are worth 2.4 billion EUR, with 53% going to EU countries. Poland produces consumable materials, diagnostic imaging devices, dental products, orthopedic and prosthetic products, and home medical equipment. EY experts predict that by 2025, production will increase by 10.3%, with consumables worth 1.2 billion USD, and diagnostic imaging worth 0.8 billion USD. These factors make Poland a key player in the EU healthcare market, and investments in this sector are monitored by investment funds and industry investors worldwide,” says Paweł Bukowiński.
Source: https://managerplus.pl/polski-rynek-ochrony-zdrowia-na-fali-wzrostu-ey-prognozuje-roczny-wzrost-o-11-do-2028-r-21221
