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Rapid Growth in the Polish Healthcare Market Attracts Investors but Faces Challenges of Workforce Shortages and Rising Operational Costs

HEALTH & MEDICINERapid Growth in the Polish Healthcare Market Attracts Investors but Faces Challenges of Workforce Shortages and Rising Operational Costs

The rapidly growing Polish healthcare market is attracting more and more investors, but it faces challenges of workforce shortages and rising operational costs of healthcare entities, according to the report “Healthcare in Poland – Development Potential and Opportunities for Investors” developed by Strategy& in Poland.

  • Polish healthcare market valued at 191 billion PLN (excluding drugs) (2023)
  • Average healthcare spending per capita in Poland is 57% lower than in Western Europe (2022)​
  • Conservative forecast of the average annual growth rate of healthcare spending in Poland (excluding drugs) is 8.3% CAGR 2023-2028​
  • The largest share of healthcare spending in Poland is allocated to hospital treatment: 34%, while in Western Europe it is allocated to outpatient treatment: 30% (2021)​
  • Public spending on AOS with an average annual increase of 17%, while the number of consultations provided has an average annual decrease of 2% (2017-2022)​
  • ~55% of healthcare spending is directed to individuals aged 60+​
  • The number of deaths from preventable causes through prevention is twice as high in Poland as in Western Europe (2021)​
  • Access to electronic health data is better in Poland than in Western Europe by 9 percentage points (2022)​
  • The number of recorded transactions in the Polish healthcare market is three times greater over the last 10 years (2014-2023)​.

The changing population structure in Poland contributes to the growing demand for healthcare services, and visible demographic trends translate into lower work capacity and costs for the economy. The population structure of Poland is shifting towards the Western European model. Over the last 30 years, life expectancy in Poland has significantly increased – by 11% for men and 8% for women (1990-2022). Demographic projections indicate that the share of the population over the age of 65 will stabilize at over 34%. According to experts, currently, ~55% of healthcare spending is directed to individuals aged 60+. It is projected that in the long term, the aging population and increased life expectancy will further boost spending on post-productive age individuals. At the same time, the observed aging society and higher morbidity pose a significant challenge to the healthcare system due to rising expenditures. Solutions that could improve the situation include promoting a healthy lifestyle and preventive care, as well as facilitating access to healthcare (both public and private).

“Poland’s economic convergence with the European Union positively impacts the development of many sectors, including healthcare. Demographic trends indicate that Polish society is approaching the model of Western European countries, especially in the context of increasing wealth, rising incidence of chronic diseases, and aging population, leading to increased demand for medical services and a high share of spending on elderly care. On the other hand, the level of funding for the Polish healthcare system is lower and characterized by less efficient allocation of resources compared to Western countries. These factors have led to the need for rapid historical market growth and also contribute to significant projected growth,” says Krzysztof Badowski, managing partner of Strategy& in Poland.

Average healthcare spending per capita in Poland is nearly 60% lower compared to Western European countries. In 2021, the government declared an increase in healthcare spending to 7% of GDP by 2027. This value is still significantly lower than the Western European average of 10.2% in 2022. From 2017 to 2022, the average growth of healthcare spending in Poland was 0.5 percentage points lower than the average GDP growth. At the same time, Poland allocates the most funds to hospital treatment, while Western countries allocate to outpatient care. The foundation of healthcare should be prevention and outpatient treatment, followed by more expensive hospital and long-term care. The Polish system deviates from the Western model, and the reason for such a proportion is too little emphasis on prevention and early diagnosis and treatment in the outpatient pathway, resulting in more frequent interventional treatment and hospitalization. The solution could be to provide some services as part of outpatient treatment instead of hospital treatment, including diagnostics, specialist care, and rehabilitation.

“Increasing funding is not expected to be sufficient to meet the growing health needs of Polish society. In recent years, there has been high transactional activity in the Polish healthcare market, as local and international investors recognize its high attractiveness and development prospects. An important aspect is the consolidation of smaller units by the largest private healthcare entities, which willingly acquire facilities in segments such as outpatient specialist care and laboratory and imaging diagnostics,” says Michał Sławuta, deputy director of Strategy& in Poland.

The use of intelligent solutions will help to increase the efficiency and quality of services and reduce costs. Artificial intelligence (AI) can be used to personalize the treatment path, for example, through a symptom checker tool. This tool analyzes the description of the patient’s symptoms and makes an initial diagnosis of the disease and creates a recommended diagnosis and treatment plan. Data science in healthcare involves analyzing population health data, which can serve as a basis for scientific research, disease forecasting, or demand for doctors. Such solutions require the secure collection of historical data in special central knowledge bases, such as the European Health Data Space (EHDS).

“Key market trends are value-based healthcare (VBH) and advanced digitization (including artificial intelligence and data analysis), which are the next steps in the development of the most efficient providers. Such solutions will also be able to mitigate the negative impact of the challenges currently facing healthcare entities, namely workforce shortages and rising operating costs. The Polish healthcare market has strong potential for further development; however, the question of how the healthcare system should address the challenges it faces remains open,” says Grzegorz Orski, manager of Strategy& in Poland.

High quality of services provided and patient satisfaction are the foundation of healthcare development. Key in this regard are patient health education and building awareness of how important it is to follow the prescribed treatment plan. Patients have the opportunity to reform the system from the bottom up by choosing those facilities that offer the highest quality, thus ensuring the flow of funds to the best entities. The Ministry of Health is developing a new list of key performance indicators (KPIs) to monitor quality in Polish facilities. In addition to engaging standard channels for data collection, it is planned to introduce a tool into the Patient’s Internet Account to collect data on patient experiences during the service. The calculated indicators will serve an informative function and will be the basis for financial bonuses for good results.

The projected increase in healthcare spending is driven mainly by public expenditures. The overall market growth is driven by higher spending targets set by the government – in 2024, planned healthcare expenditures in Poland are 6.2% of GDP, and by 2027, they should reach 7% of GDP. High, 8% growth rates are forecast for the entire market in 2023-2028 due to demographics, epidemiology, inflation causing service price increases, and rising labor costs. The predicted growth rate is higher for private than public services, which will increase the role of the private sector in the market, but public funding will remain the foundation of the system.

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