Brief overview of the healthcare system in Romania

Overview of the organizational structure The healthcare sector has always been a continuous challenge for many countries in Europe and it still is a complex and sensitive topic to be addressed in any part of the world. During the past two decades, Romania has gone through a period of rapid and major changes in every sector, including health. The local healthcare industry encountered the same difficulties as in all the Central and Eastern Europe (CEE) healthcare systems: a low level of government financing, inadequate and obsolete equipment and facilities, management deficiencies, informal payments all the aforementioned resulting in an overall increasing dissatisfaction of population. At present, Romanias healthcare system is still dominated by the public healthcare system, being funded by a combination of employer and employee contributions to the National Health Insurance Fund (NHIF) and of direct allocations from the state budget. Romania has a mandatory insurance-based financing model for healthcare, involving contributions from employers (5.2% of the gross wage) and employees (5.5% of the gross wage). The health insurance system is administrated and regulated by NHIF, a central quasi-autonomous body. Since 1998, when the country adopted the mandatory social health insurance system, the roles of the main participants in the health system have changed, the relationships between different organizations have become more complex and the number of stakeholders has increased. The system is organized at two main levels: national/central and district (judet). The Ministry of Public Health responsibilities consist of developing national health policy, regulating the health sector, setting organizational and functional standards, and improving public health. The representative bodies of the Ministry of Public Health at the district level are the 42 district public health authorities (DPHAs). Also at district level, 42 District Health Insurance Funds (DHIFs) are responsible for contracting services from public and private healthcare providers according to the rules set by the central units. Two national insurance funds have been established in 2002, one belonging to the Ministry of Transport (CAST) and the other to the Defence System, Public Order, National Security and Justice (OPSNAJ Authority). Since 2002, the social insurance contributions have been collected at the national level by a special body under the Ministry of Finance (the Fiscal Administration National Agency), and DHIFs have raised contributions only from insured persons paying the whole contribution (such as the self-employed). The current legislation also assures free choice of provider for the patient. The Ministry of Public Health has elaborated a new health law (Health Reform Law. 95/2006) in its attempt to increase access to basic medical care, enhance the quality of medical services and improve the health indicators. Among other things, the 17 titles in this law aim to continue the decentralization process, to encourage the development of the private sector and to establish clear relations between the systems of health and social care.

The private healthcare sector is in an incipient phase but growing at a highspeed. An increasing number of private clinics have been opened and have been well received by those in the middle and upper income segments. Private health insurance services are usually offered by private companies to their employees, as part of the benefits package. In theory, insurance coverage is almost comprehensive. Exclusions comprise certain dental services and high-technology treatments. Health status Demographic trends show continual population decline: the population declined by 5% between 1992 and 2006, up to 21.6 mn. The decrease was caused by emigration, a fall in the birth rate and a rise in mortality. Health status in Romania is quite poor compared with the other European countries. According to World Health Organization (WHO) data, the average life expectancy in Romania was 72.7 years in 2006 (69.2 years for men and 76.2 years for women), six years shorter than the European Union (EU) average (78.5 years in 2005). The most important causes of death are cardiovascular diseases (62.1% of all deaths in 2006) and cancer (17.6%), our country having one of the highest levels of cardiovascular diseases in Europe.

Physical and human resources The number of hospitals has remained relatively constant since 1980, when 416 hospitals were registered by the Centre for Health Statistics of the Ministry of Public Health, whilst in 2005 the total number was 433. Very few new stateowned hospitals were built after 1989, the increase in numbers resulting from splitting or transforming of outpatient wards into small hospitals and vice versa. Most hospitals are state-owned, with new hospitals being opened by the private investors. Capital investment projects are decided at Ministry of Public Health level on the basis of proposals submitted by districts, being funded through taxation (and paid out of the state budget) with the additional support from external funded programs and donations. The government has also announced

its support regarding public-private partnerships in the construction of new hospitals and specialized facilities such as dialysis, although no project has been completed so far. Due to the underfunding of the system, it is generally accepted that the quality of hospital buildings and equipment is either obsolete or overused. The substantial amounts invested by the Ministry of Health during the past years in purchasing new and modern equipment are yet insufficient and unevenly distributed. Significant investments in new technologies and up-to-date medical equipment can be seen in the recently opened private clinics, which are becoming main alternatives to the formerly renowned top clinics in the public sector, with long traditions in health care.

In terms of hospital beds, Romania has a relatively high hospital beds to population ratio, imposing extra costs on the health system. According to the National Institute of Statistics, Romania had over 143,000 hospital beds in 2005 (including short-term acute care and long-term care beds) or 6.5 beds per 1000 people. The ratio for acute care is lower, as WHO data points out. In 2005 the ratio for acute care was around 4.5, decreasing dramatically from 6.9 in 1999. Nonetheless, both the ratio for all bed types (6.5) and the ratio for acute care beds (4.5) were comparable to the average figures for the EU (5.9 for all bed types and 4.1 for acute care beds). The relatively high ratio is not managed effectively as the allocation of beds is uneven and does not match the actual incidence of diseases in different therapeutic areas.

Romania has a doctor-to-patient ratio of below 2 per 1,000 inhabitants, which is lower than European average. Shortages are most acutely felt in rural areas. Lately, since Romania has joined EU, the migration of healthcare personnel to western countries has amplified, decreasing even more the ratio and the patients options to access better-quality medical services. Because the general funding crisis in the healthcare system, the medical professionals situation has deteriorated, often receiving wages with considerable delays. Although some 96% of Romanians are registered with a doctor, primary care remains poor. Additionally, there is a shortage of pharmacists, which pushes more patients to see hospital doctors. Healthcare financing and expenditure As in most countries, Romania has a mix of compulsory and voluntary elements of finance, but the dominant contribution mechanism is the social insurance. Health funds derive primarily from the population, the most part through third party payment mechanisms (social health insurance contributions and taxation) but also by out-ofpocket payments (co-payments for goods and services not covered by the insurance scheme or direct payments to private or public providers for services outside of the yearly framework contract). In 2004, the social health insurance contributed to 82.7% of the total expenditure, whereas taxes from the state budget represented 15.8%. As the state budget holds responsibility for funding public health services, capital investments, preventive activities and some treatments under the national health programs (e.g., for the treatment of diabetes, transplant and oncology), taxes continue to be an important contribution mechanism to finance healthcare. Other sources of health financing are out-of-pocket payments, external financing and donations. In 2006, a new tax on cigarettes and alcohol called the tax on vices was introduced at the request of the Ministry of Public Health. Substantial funds were collected and an important share is used by the Ministry of Public Health on strategic health programs (health promotion and prevention) and capital investment. As a result of increase in the taxes weight to the total health funding,

in 2007, the social health insurance share in the total expenditure decreased to 75% (World Health Organization data). The share of the state budget earmarked for recurrent and capital expenditure in the health sector is decided annually by the Parliament. The overall public health budget (including the NHIF budget) is annually set by the government and approved by the Parliament through the Budget State Law. In 2007, the Minister of Health at that time announced that the state was allocating EUR 198 per capita for the health system, from only EUR 96 in 2004. For 2009, due to the impact of global crisis on the local economy, the public health budget was set at around 3.8% of GDP, lower than the 4% of GDP allocated in 2008. Total healthcare expenditure is difficult to measure because of the incomplete records of private expenditure (especially direct payments charged by private providers and informal payments in the public sector). Public figures on health expenditures include mainly those of the NHIF and Ministry of Public Health for medicines, health services, preventive services, medical equipment and capital investments, whereas the level of private spending is most probably underestimated. The data available so far suggest that from 2000 to 2007, the share of GDP spent on health had increased from 4.1% to 4.7%. Despite this increase and the limited comparability with international figures, the healthcare spending remains considerably lower than in most EU countries. For comparison, the CEE average in 2007 was approx. 6.7% of GDP. The low healthcare spending has had a negative impact on the status of the health system with a direct impact on the maintenance of the existing infrastructure, investments in new equipment and access to services, especially for low-income groups. Annual spending on healthcare is however expected to rise gradually to about 5.4% of GDP by 2012, still remaining below the average forecasted levels in CEE (7% of GDP), but reducing the gap.

By 2012 healthcare spending per head is forecasted to be more than 80% higher as compared to 2007, as Romania attempts to align to the EU requirements. Further growth will be fuelled by the rise of the disposable incomes, the development of the private health insurance and the increase of the medicine consumption. Informal payments in state-owned healthcare facilities are deemed to stimulate the development of the private medical services, as the latter represent a better alternative to the poor state-owned services.

The private healthcare industry

Market overview The Romanian private medical services market emerged in the mid 90s, as an alternative to the poor condition of the public health system, long queues and the artificially created bottlenecks that were addressed through various gifts and informal payments. Initially, local entrepreneurs opened small medical practices in order to address the deficiencies of the public ambulatory health system. Furthermore, the increasing demand for better quality services led to the emersion of the first outpatient clinics. The sector attracted foreign investors with operations in Central and Eastern European markets, Medsana and Medicover being among the first foreign names to enter the market. The private clinics offer mainly three types of medical services to their clients: fee-for-service (for each consultation, investigation or laboratory test the beneficiary pays a fee), prepaid medical services (for a monthly subscription, an individual benefits of a certain package of services) and occupational health services (medical check for employees, at sign-up date and on an annual basis thereafter, paid on a fee-for-service basis or as a monthly subscription). The prepaid medical services are usually part of the compensation package offered by the employer (the corporate client) to its employees as a method of personnel incentive and retention. The occupational health services were boosted by an Order issued by the Ministry of Health in 2002, which requires the public and private employers to provide their employees with medical checks at sign-up date and on a regular basis, whose costs are fully deductible at the employers level. The fee for service segment, namely the services directly paid by patients, had also a steady growth pattern. Once the patients with higher incomes were familiarized with the range of services offered, there was a migration from the Standard package offered by the company they were working at, towards subscriptions containing more complex services (Classic, Business and Executive packages). The next natural step which is expected is the establishment of private health insurance. Market players anticipate that this type of insurance will become interesting in the near future, as the specific regulation in this field will be developed. The expansion of the private health insurance contracts will produce a new and important stream of revenues for the providers of medical services. Moreover, the further development of private hospitals is conditional on the

boosting of this type of insurance contracts. In 2007, the emerging market of private health insurance was estimated at some only EUR 9 mn and 14,000 clients, being currently offered by some of the international insurance companies which operate on the local market. Regarding the medical specialties offered by the private sector, one may count amongst the most developed: dentistry, laboratory investigations (especially medical imaging/echography), plastic/general surgery, pediatrics, dermatology, laser therapy, obstetrics-gynecology, occupational health, psychiatry. The Romanian private medical services market accounted for some EUR 250300 mn in 2007, deemed to reach some EUR 300-350 mn in 2008. The private healthcare market in Romania is quite small considering the healthcare spending of some EUR 5 bn. The outlook for the sector looks promising the private medical services market is estimated to grow at a CAGR of over 30% in the next four to five years, up to EUR 1 bn.

In the overall current context, such rapid increase is turning the private medical care sector into one of the stars of the local economy. The high growth has lured both private equity funds and entrepreneurs more or less experienced in this field, leading to an important volume of investments through either greenfield projects or M&A transactions. Currently, the demand for private medical services is heavily concentrated in Bucharest. As Bucharest market becomes saturated, it is expected that the private clinics and hospitals will reach a high development throughout the country in order to meet the overall demand for higher quality medical services. In the midterm, the share of Bucharest market should represent only one third of the total private healthcare market value. Competitive landscape

Top 10 private clinics hold around 35% of the private medical services market. The remaining market share is split between smaller clinics, individual medical practices and independent privately owned laboratories. In 2008, the most of the market players have envisaged expansion outside the Bucharest area, in cities such as Timisoara, Constanta, Brasov, Iasi, Sibiu and Bacau, through either greenfield projects or partnerships with local players. Due to the soaring growth rhythm of the market during the past 2-3 years, the small players with a previous turnover of EUR 0.5 mn have became sizeable, increasing the number of potential acquisition targets.

Investments in private hospitals are tied to the development of private health insurance. Currently there are only nine private hospitals authorized in Romania. The largest hospitals commissioned so far in Bucharest are Euroclinic developed by Eureko Dutch group and Life Memorial Hospital developed by Medlife. Memorial Hospital is the largest private hospital in the country and is endowed with a capacity of 120 beds, own laboratory and state of the art medical equipments. The hospital, opened in June 2007, has four medical specialties (general surgery, medical section, obstetrics-gynecology and pediatry) and is equipped with a generous surgery unit of 1200 sqm, including five surgery rooms and Post Op-Intensive Therapy. Euroclinic started operating in June 2005, following investments worth EUR 14 mn, and was designed as a private wing of the Floreasca Hospital. Euroclinic, the first large private hospital in Romania, was one of the pilot projects as part of the strategy to improve the performance of the Romanian healthcare system, with the aid of the private sector, a strategy approved through a government decision in 2001. Lately, many of the medical services providers have announced their intentions to develop private hospitals. Because of the unclear legislation on private health insurance and in the absence of genuine private health insurance services, the profitability of such an investment is questionable. In 2008, after careful

consideration on the business profitability at the moment, Romar medical services group stated it was analyzing the possibility to deviate from its initial plan of developing a 60 beds hospital by turning the existing structure to an office building.

Medlife MedLife, leader of the private medical service market, posted a 67% rise in turnover in 2008, to EUR 21.2 mn, on a market with a general growth rate estimated at 30%. According to the company, the high growth is a result of company latest developments, the two newly opened hyperclinics in Bucharest and Timisoara. The company has plans to invest EUR 5 mn in expanding the medical services area in the MedLife Memorial Hospital maternity and some of the existing clinics as well as opening a new clinic in Bucharest. For 2009, MedLife foresees EUR 31.5 mn worth of business, more than 40% higher as compared to 2008. The company was established 13 years ago, being founded as a small clinic by Mihaela MarcuCristescu, a very reputable pediatrist. At the end of 2006, IFC acquired 20% of shares for a USD 5 mn consideration. Shortly after the deal with IFC, MedLife opened Life Memorial, the largest private hospital domestically, an investment worth more than EUR 10 mn. Presently, the Marcu family are the main shareholders of Medlife, holding some 80% stake in the company. Medicover Medicover, the local subsidiary of the Swedish healthcare services provider Medicover Group has posted revenues of EUR 11 mn in 2007 and forecasted a 35% increase for 2008, up to around EUR 15 mn. Presently, the company operates 9 clinics, out of which 4 are in Bucharest. The other clinics operate in Focsani, Cluj-Napoca, Constanta, Iasi and Timisoara. In addition to the private clinics, Medicover holds a laboratory chain, Synevo Romania. Synevo Romania is former Rombel, set up in 1995 and acquired by Medicover in 1997. The company has expanded its local network to 11 units and has launched the construction works on a regional medical centre in Bucharest, a greenfield investment worth EUR 10 mn planned to be completed by the end of 2009. For 2008, Synevo Romania estimated more than EUR 14 mn in turnover, which represents a growth rate of at least 10 % on the year.

Medicover announced plans to start, beginning with this year, the construction of a 100 beds hospital, which is expected to be commissioned in the second half of 2011, following an investment of EUR 12-15 mn. Medcenter Medcenter is part of Medicarom Group of five companies providing medical service, import, marketing and distribution of medical products for the health system. Medicarom shareholder is Selinvest Trading Ltd registered in Virgin Islands. Established in 1998, Medcenter has reached a network of 35 clinics and laboratories in 8 cities across Romania, being among the first companies in the field to consider a countryside expansion. Medcenter has earmarked for this year an investment budget of EUR 9 mn for two new clinics in Bucharest, an imaging centre and two clinics in the country. Last year, Medcenter generated turnover worth EUR 11 mn, up by 33% as compared to 2007 and having a target of EUR 12.5 mn for 2009. CMU Romanian medical services supplier Unirea Medical Centre (CMU) has been founded in 1995 by Dr. Wargha Enayati. In early 2007, UK-based private equity firm 3i acquired a 49% stake in the company for around EUR 15 mn consideration. Last year, the company initiated a EUR 20 mn expansion plan. It opened the first private pediatric clinic in Bucharest called CMU Kids, started activity at its new diagnosis centre, launched the most advanced imagistic centre in Bucharest and commissioned its first private maternity Regina Maria, in the Northern part of the city. CMU has also started the expansion outside Bucharest through the acquisition of a 50% stake in Avamedica, Constanta and of a 49% share in the Motilor Medical Centre in Cluj-Napoca. In 2008, CMU posted a turnover of EUR 11 mn, up by 37% as compared to 2007. For 2009, the company targets a 50% increase on the year, to EUR 16.5 mn. Furthermore, the company will follow on the investment program, planning to open a new imagistic centre, new clinics outside Bucharest and a Stem Cell Bank. Romar Romar group is controlled by the Romanian family Hagicalil, with a 60% stake. In the first half of 2007, the investment fund Reconstruction Capital 2 (RC2) took over a 33% stake in the medical services group for a consideration of EUR 3 mn. Following the change in the shareholders structure, the group invested about EUR 2.3 mn to acquire the entire stake in Evolution Med, which owns a medical centre in Bucharest. In 2008, Romars turnover remained flat at EUR 7.6 mn, falling 30% below the initial forecast. One of the main causes was the delay in signing the contracts with the Health Insurance House, which should have generated between 20-25% of Romars business figure. The company claims to hold about 10% of the occupational health market, with the occupational health services to derive over half of the company revenues. In 2009, the group expects its turnover to grow by 30% on the year, up to EUR 10 mn, due to the last year expansion.

Euromedic Romania The Romanian arm of Dutch-registered healthcare services provider Euromedic International reported a turnover of EUR 14 mn for 2008, double if compared to 2007. Euromedic Romania invested last year a total EUR 27 mn to open 2 medical centres and to acquire new equipment for the existing ones. Euromedic was responsible for introducing the first Positron emission CAT scan-computed CAT scan (PET-CT) to Romania, a EUR 5 mn investment, and is also operating an imagistic clinic network in full development. It announced in early 2008 a plan to invest some EUR 40 mn by mid-2009. The company expects its turnover to rise by 35% on the year to almost EUR 20 mn in 2009. Euromedic Romania has four divisions: Euromedic Diagnostic, International Dialysis Centres, Euromedic Labs and Euromedic Training. The company operates 7 medical centres in the country. The healthcare provider has also entered the Romanian dialysis market in 2008, by taking over Nefromed dialysis centres for some EUR 5 mn. Euromedic International operates 170 medical centers in 15 European countries, half of which are operating on the dialysis segment. At the global level, Euromedic was taken over by Ares Life Sciences and Merrill Lynch Global Private Equity in 2008, from its former shareholders, the Warburg investment fund and General Electric Healthcare. Sanador Sanador is a network of private clinics set up in 2001, by Florin Andronescu, founder of electronics and home appliances retailer Flanco, of the former consumer finance provider Credisson and of the credit broker company Kiwi Finance. The network of private clinics is run by the businessmans wife, Doris Andronescu. Sanador ended 2007 with turnover worth EUR 7 mn. The revenues structure is split between contracts with health insurance houses, direct payments for health exams and corporate agreements, each accounting for around 30% of the total. For 2008, Andronescu estimated an increase in revenues of up EUR 13.5 mn and an EBITDA margin of 23-24%. For the moment, the company is operating only in Bucharest: two clinics, a fullyequipped medical laboratory and private medical reserves located in Floreasca Emergency Hospital. Sanador is also considering investing in a 100 beds private hospital alongside a hotel to accommodate the patients families, with a total investment of EUR 50 mn. Out of total investment, the hospital construction is estimated at EUR 20 mn and the medical devices at EUR 9 mn. The construction will be located near the Sanador clinic at Piata Buzesti, Bucharest. Gral Medical Gral Medical was set up in 1996, following the split of Romar clinic networks and is owned by Serban family, which is also the founders of the company. Gral, which now runs 12 clinics and laboratories in the country, announced plans to invest EUR 2 mn in 2009 to open 5 new clinics in the country, and expand its network to 17 units. The first unit to open outside Bucharest is the Diagnostic Centre in Cluj, which will focus on laboratory tests, medical imagery and paraclinical investigations. The company also plans to establish a new private

hospital in Bucharest with a capacity of 100 beds, specialized in cardiology and orthopaedics, along with a maternity. According to 2008 figures, the company logged revenues of over EUR 10 mn, 63% up against 2007, and a 20% gross margin. Medsana Medsana Bucharest Medical Centre was founded in 1996 by the Athens Medical Centre Group, with an extensive presence in Europe and US. The company offers health care services for both individuals through fee for service as well as monthly subscriptions to the employees of multinational companies based in Romania. Services to corporate customers generate 50% of Medsanas annual turnover. Currently, the company has three clinics (two in Bucharest and one in Ploiesti) and one IVF clinic. The estimated turnover for 2008 is of around EUR 10 mn and the EBITDA is EUR 750,000. Medsana aims for a 25% increase in turnover for 2009, to EUR 12.5 mn, as well as to launch another clinic in Bucharest and to expand its existing units. The company is also developing a 150 beds hospital in the North of Bucharest, with an estimated initial investment of EUR 24 mn. For the next five years Medsana envisages to expand in some of the major cities in the country, by opening 5 new clinics. Polisano Polisano group has been founded in 1993 in Sibiu by Vonica family. Total sales for the group surpass EUR 170 mn, mostly coming from the pharmaceutical wholesale activity. The medical services division of the Polisano group is made up of two separate legal entities: Clinica Polisano SRL (polyclinic operator) and Centrul Medical Polisano (hospital operator). In 2007, these activities generated combined revenues of EUR 5.5 mn, up by 68% as compared to 2007. The medical services division of Polisano operates a hospital, a clinic, a laboratory, a dialysis centre and an IVF centre in Sibiu, as well as two clinics and a laboratory in Bucharest, having plans to further develop its business by launching a network of 5-6 fertility centres, clinics and laboratories throughout the country, expanding the 50 beds hospital capacity and opening an imagistic centre together with a centre of interventional cardiology, near the hospital in Sibiu. Romanian private medical services outlook The Romanian private medical services market is estimated to continue its double digit growth over the next years. In 2009, the market is seen to reach EUR 400 mn, tempering its growth pattern to 15-20% y/y, on the back of the unfavorable economic context. According to the main players in the field, the international financial crisis could trigger the postponement of some investments in the private medical services industry, budget reviews, and freeze the increase in prices of services. For the moment, despite effects of the crisis becoming ever more visible in Romania, the industry does not perceive a direct impact. Moreover, some of the large players have announced significant increases in revenues for the first month of 2009 as compared to 2008, also backed by the recent expansion and heavy investments in the previous years.

For the second part of the year, as the economy may suffer more severely because of the international context, the increase in the level of corporate contracts could face a slowdown. The raise in the unemployment rate would reduce contribution to the social insurance, which would also impact the value of contracts with the National Insurance House and could trigger delays in the collection of receivables for the corresponding segment of services. Additional pressure would result from the potential raise in taxes, in the interest level for loans and leasing contracts, as well as increases in medical devices prices and consumables due to foreign exchange volatility. On the other hand, some players foresee a decline in the staff turnover and a drop off in the financial claims, especially for the managerial positions. As the overall picture of the economy worsen, the decline in the population purchasing power is likely to affect the patients ability to access more private medical services. Alternatively, the deterioration of the public health services due to lower amounts of resources allocated to the Ministry of Health for 2009 might result in an opposite trend, that of directing patients towards the private clinics and hospitals. Overall, in the absence of a viable substitute, the demand for private medical services is expected to remain strong. In this situation, the battle for market share and customers in the private healthcare industry is expected to tighten, especially in Bucharest. On a long run, the private medical services market remains one of the few domains with a promising outlook, attracting the interest of most of the financial investors which are looking to invest in sectors resilient to the international turmoil and with good prospect of growth. Furthermore, the strategic international operators are expected to attempt to make their way into the Romanian market, through either acquisitions or greenfield projects, enhancing the level of foreign investments which are vital to sustain growth and to increase access to modern and complex healthcare services.

Romanian private healthcare industry SWOT

S Strengths S Sustained growth during the past years and good prospects for future growth R Rigid demand due to lack of a viable substitute (poor public health services) Better managerial capacity as opposed to the public sector, especially for the private medical services providers which are controlled by foreign i investors with superior expertise in this field The heavy investments performed in the past are now paying off W Weaknesses Incomplete records of private expenditure

P Poor private health insurance legislation L Low deductibility quotas for cash payments H Highly fragmented market I Insufficient medical resources Limited to specialties which can generate profit (i.e., specialties such as oncology involving expensive treatments and high expertise cannot be developed in the private sector) O Opportunities High interest from both financial and strategic investors to trigger increased FDI t through acquisitions of local players or greenfield projects Development of private health insurance to trigger investments in private h hospitals Lower resources allocated from the state budget for the public health services t to direct patients toward the private sector Poor-quality of the public primary care services, inadequate referral and overemphasis on hospitalbased curative services with lack of good equipment and drugs T Threats M Migration of healthcare personnel to EU countries M Migration of patients to more developed EU countries Significant delays in collection of receivables for the contracts with the National I Insurance House The raise in medical devices prices and consumables to put additional p pressure on the medical services companies margins Instability of the economic environment to lower population access to private medical services