BMI View: Turkey ' s healthcare sector is set to continue its development, with a high government focus on improving infrastructure. Improvements will be most profound in the country ' s major cities in the densely-populated western region and that surrounding the capital city Ankara, but there are considerable plans for hospitals to be built across the wider country , with the aim of improving patient access even in the more remote parts of Turkey . Indeed, h ealthcare provision is likely to remain unevenly distributed in the short term though over the long term , there is likely to be a convergence of expenditure, and subsequently health indicators.
The bulk of Turkey's population resides along the Aegean coast, the Western Black Sea region and the European portion of the country. The centre and the east of the country are harsh, arid regions interspersed with large areas of steppe. As such, the population is concentrated in the west of the country, with population density highest in the northwest.
Levels of gross state product per capita roughly follow in line with geographic distribution. Turkey's wealth and spending power is primarily concentrated in the west of the country (specifically around the greater Istanbul area and surrounding provinces on both sides of the Eurasian land corridor), and in Ankara. This has lead to inward migration from east to west and, as such, healthcare expenditure has been primarily concentrated in the west to accommodate these growing, urban populations.
Concentration of healthcare infrastructure in these densely populated areas has allowed better access to quality care. At the same time, this increase in population and the rise in incomes in western Turkey have made the private sector viable, providing some relief for public sector hospitals while offering improvement in the quality of healthcare services. As a result, most doctors, nurses and other medical professionals have been recruited in these regions. Our forecasts reflect this to an extent, with our forecasts generally posing much lower growth in the number of staff and infrastructure for the eastern provinces and regions compared to their western counterparts.
We see healthcare spending and healthcare infrastructure receiving significant boosts over the coming years. Turkey's Ministry of Health has embarked on establishing large-scale public-private partnerships (PPPs) to develop healthcare infrastructure in order to meet the needs of Turkey's growing population and address existing deficiencies within the public sector. These PPPs will focus on bringing up the standards of healthcare on the Anatolian peninsula, where there are clear deficiencies in terms of healthcare worker density and outpatient services. These hospitals will be rented out by the government to the private sector, in the belief that private operators will manage healthcare services more efficiently than Turkey's archaic public healthcare sector. Hospitals in Akgag, Mersin and Yozgat, which are anticipated to open in 2017, are prime examples of this strategy. Highlighting the pace at which these partnerships in health infrastructure are advancing, in October 2016 funding for a hospital in the city of Eskisehir was agreed by two of Turkey's largest banks, Isbank and GarantiBank. We are forecasting the total number of hospitals to increase from an estimated 1,541 in 2015 to 1,632 by 2020; over the same time period, hospital beds will increase by 15% to 243,467 from 212,482 in 2015.
Turkey has experienced a swell in demand for private healthcare over the last decade, a trend that has been catalysed by its enviable economic growth. Furthermore, as Turkish citizens have seen their incomes rise, their desire to access higher quality healthcare services has followed suit. Overcrowding and dissatisfaction with public services has pushed many into opting for private healthcare. Private healthcare facilities have also grown in number partly due to a combination of medical tourism from neighbours in the Middle East and Europe as well as to satisfy domestic demand.
The government wishes to dramatically boost its healthcare tourism industry as part of its wider plan to use healthcare to boost the economy. In addition to expanding the domestic pharmaceutical industry with an intention to become a net exporter by 2023, the government aims for Turkey to become a regional healthcare tourism hub. According to the Minister of Health Mehmet Muezzinoglu, the country benefitted from approximately USD3bn from healthcare tourism in 2015. The establishment of a Health Tourism Agency is hoped to help achieve the target set of bringing in USD10bn by 2019 and USD25bn by 2023. Much like the ambitious targets set for the pharmaceutical trade balance we believe these numbers to be overly optimistic. However, these ambitious targets highlight the continued governmental focus on investing in the country's healthcare infrastructure over the long term.
The lack of regulatory certainty has lately been a barrier to foreign investment in Turkey's healthcare sector. As of recent years, new legislation has provided investors with some guarantees, VAT exemption and cheap loans in return for renting hospitals built by the private sector for 25 years. This move has cut red tape for investors, reducing the number of permits and level of planning permission required.
Turkish authorities are keen to see major, long-term investments in the country, given that the majority of capital inflows into the country have tended to be short term. The government has guaranteed support for international projects worth TRY500mn (USD279mn) and above, hoping to see bigger and more numerous long-term commitments from private financiers. The Turkish government is running a structural deficit on its social security system but this will be unsustainable in the long term as demand for healthcare accelerates. With these payment protection insurance deals, the Turkish government hopes to manage popular sentiment and accelerate the country's healthcare development without risking its fiscal position in the short term. The hospitals will be rented back from private developers by the state through long-term leases, in the hope that the private sector will latch onto the opportunity for long-term, stable earnings from the government.
The Turkish public healthcare system also continues to face a severe shortage of qualified medical personnel, as the number of doctors entering training has trailed overall population growth. In Turkey, there are, on average, 1.8 physicians per 1,000 people, a figure that vastly trails OECD countries. The reality is that this figure is actually worse as it includes private doctors. The shortages are most acutely felt in Turkey's more rural regions, where the bulk of the Turkish population is located, and where birth rates are the highest. The government has implemented a number of initiatives to reverse this trend, including offering physicians 1.5 times the normal pay for working in the far East of the country, though the success of such moves is yet to be seen.
Espicom’s Understanding Turkey's Regional Healthcare Markets Report allows you to explore Turkey’s regional markets by giving you a practical evaluation of opportunity and risk at the under-appreciated sub-national level.
Rich in statistics, charts and maps, this is the one report you need to fully appreciate the Turkey’s diverse regional health environments in the context of neighbouring provinces/states/territories and the national picture.
Written in association with Business Monitor International, this unique report uses data sourced in-house, providing analysis and forecasts from our experts covering key areas such as:
- Healthcare Expenditure
- Healthcare Facilities
- Healthcare Personnel
- Economic Activity
Published by Espicom - experts in the pharmaceutical, medical devices and healthcare field for over 30 years, Espicom’s Understanding Turkey's Regional Healthcare Markets Report brings together a range of often difficult to source information in one single, convenient and comprehensive publication.