Article

The healthcare sector in Poland and opportunities for investors

02.09.2024

The healthcare sector in Poland is developing dynamically and is attracting more and more attention from investors. In 2023, the value of the healthcare market, excluding medication, amounted to PLN 191 billion, and forecasts indicate an average annual growth of 8.3% in 2023-2028. In the context of an aging society, the growing number of chronic diseases and the increase in the wealth of citizens, the healthcare sector in Poland offers numerous investment opportunities.

An ageing population and the development of the health sector

The key factor affecting the development of the health care sector in Poland is the aging of the population. By 2030, more than 34 per cent. of Poles will be over 65 years old, which will significantly increase the demand for health services. Over the past three decades, life expectancy has increased by 11 percent for men and 8 percent for women, leading to an increase in demand for long-term care, geriatrics, cardiology, and rehabilitation. It is also worth noting that the growing number of people suffering from chronic diseases, such as diabetes and cardiovascular diseases, poses new challenges for the healthcare sector in Poland. These adverse health changes are due to both the aging  of the population and lifestyle changes, including increased alcohol consumption and an increase in the number of obese people. It is estimated that the number of people with hypertension in Poland will increase by 1.3 p.p. by 2025, which further increases the need for investment in the development of medical infrastructure and the availability of health services.

Increase in the wealth of the society and its impact on the health care sector

The increase in the wealth of  society is another important factor driving the development of the health care sector in Poland. Between 2019 and 2023, average salaries increased by 67 percent, and the average pension increased by 55 percent, which translates into  the greater purchasing power of Poles. As a result, the demand for private medical services is growing, which in turn generates new opportunities for investors. The increase in spending on health is visible in both the public and private sectors, which makes the health care sector in Poland more and more attractive for investment.

Health literacy as a catalyst for the development of the sector

The growing health awareness among Poles, which significantly contributes to the development of the health care sector in Poland, cannot be overlooked. The average number of consultations per person has increased by 9% over the last 10 years, which shows that Poles are increasingly caring about their health and are willing to invest in prevention and modern medical technologies. The increase in health awareness leads to a greater demand for diagnostic services, specialist consultations and advanced treatment methods, which creates further opportunities for investors.

Economic convergence with the EU and the modernisation of health infrastructure

Polish’s economic convergence with the European Union also contributes to the development of the health care sector in Poland. The Polish economy is approaching the level of western EU countries, which affects the growing expectations of patients and the need to modernize health infrastructure. In 2021, the government declared an increase in spending on health care to 7 percent of GDP by 2027, which is a significant impulse for the development of the sector. Currently, in Poland, 34 per cent of expenditure on health care is spent on hospital treatment, while  Western Europe is placing more emphasis on outpatient care. This shows that the healthcare sector in Poland still has great potential for development and adaptation to Western standards.

Digitalization and technological innovation as the future of the healthcare sector

Digitalization and technological innovation are playing an increasingly important role in the transformation process. The digitization of medical processes, such as e-prescriptions, e-referrals and teleconsultations, increases the efficiency of the healthcare system and improves the availability of services for patients. Poland, with one of the highest rates of access to health data in Europe (86 per cent), is becoming a leader in the digitisation of the health sector. Investments in modern medical technologies, such as artificial intelligence, big data and the Internet of Things (IoT), create new opportunities for investors who want to participate in the transformation of Poland’s healthcare sector.

Attractiveness of the healthcare sector for investors

The healthcare sector in Poland is also gaining in attractiveness for investors thanks to the growing level of spending on healthcare. Since 2018, public and private spending has grown at a rate of 10% per year, making the sector a stable and promising place for investment. Investors are also attracted by the growing number of transactions on the mergers and acquisitions (M&A) market. The number of transactions on the Polish healthcare market has tripled over the last decade, which proves the great interest in acquisitions of existing entities by larger capital groups.

Resilience  to cyclical changes

It is also worth noting that the healthcare sector in Poland is characterized by resistance to economic changes. The demand for medical services is stable, which translates into predictable revenues and relatively low investment risk. In the face of global challenges, such as the COVID-19 pandemic, the healthcare sector in Poland has gained in importance – the value of the telemedicine services market increased by 60% in 2020, which further strengthened its position as an attractive capital investment. Long-term demographic and epidemiological trends, such as an aging population and an increase in chronic diseases, also contribute to an increase in demand for medical services, which makes this sector in Poland more and more promising.

The future of the healthcare sector in Poland

The future of the healthcare sector in Poland requires further structural and regulatory reforms. The government will have to continue to modernize health infrastructure, including hospitals and clinics, and invest in the education and development of medical staff. Improving access to healthcare in rural areas and smaller towns where access to medical services is limited will also be an important element of the reforms. In the context of the growing demand for medical services, the healthcare sector in Poland will have to increase the number of places in long-term care facilities and develop its rehabilitation infrastructure. Currently, the number of long-term beds in Poland is 5.5 per 1 thousand inhabitants, while in Western European countries this indicator is on average 11 per 1 thousand inhabitants, which creates a significant gap and at the same time an investment opportunity. In the context of the growing demand for medical services, the healthcare sector  will have to increase the number of places in long-term care facilities and develop its rehabilitation infrastructure, which is associated with investments estimated at PLN 15 billion over the next five years.

Investing in innovation and technology as a driver of development

The development of the healthcare sector in Poland will also be driven by investments in innovation and technology. The Polish startup scene in healthcare is growing dynamically – in 2023, the value of venture capital investments in Polish medical startups amounted to PLN 1.2 billion, which is an increase of 45% compared to the previous year. These investments are mainly focused on areas such as telemedicine, artificial intelligence (AI) and health data analytics, which is attracting increasing interest from investors. It is expected that by 2027 the value of the telemedicine market in Poland will reach PLN 4.5 billion, which means an increase of 300% compared to 2020. The introduction of innovative technologies, such as the Internet of Things (IoT) in medicine, can bring savings of PLN 2-3 billion per year by improving the efficiency of treatment and reducing the number of medical errors. The future of the healthcare sector in Poland will largely depend on the ability to adapt and implement these innovative solutions, which can significantly improve the quality of healthcare and reduce operating costs.

To sum up, the healthcare sector in Poland offers great opportunities for development and is increasingly attractive to investors. Increased demand for medical services, technological developments and the need for structural reforms will be key factors shaping the sector in the coming years. However, the key element will be the proper management of these processes to ensure that patients have access to high-quality healthcare and to create a stable and favourable environment for investors.

Source: Strategy& – “Healthcare in Poland – development potential and opportunities for investors”