Serbian Competition Authority completes sector inquiry into private healthcare sector

The subject of the sector inquiry was to examine the market structure and conditions of competition, as well as the regulatory framework and the relationship between the main competitors in the private healthcare services market. Particular focus was placed on the relationship between private healthcare service providers and insurance companies through an analysis of their contractual relationships.

Commission's main findings:

• The Report covered 18 participants owning 29 healthcare institutions, including 16 general hospitals and 13 health centres, accounting for 40-50 % of total revenues in the private healthcare services market. The market is rapidly growing, while the largest healthcare institutions (Medigroup, Belmedik and Euromedik) recorded the highest revenue growth, between 47 % and 143 %, during the observed period. These three undertakings generated approx. 80 % of total revenues among observed market participants.
• There are no substantial regulatory or other barriers to market entry. Since establishing a healthcare institution requires significant investments in infrastructure, equipment and technology, the Commission concludes that the barriers to entry are primarily financial.
• The market participants indicated that the conditions under which they operate are generally satisfactory. According to the Report, there is price competition among major healthcare systems, with significant variations in the prices of selected medical services. The Commission noted that it found no evidence of parallel pricing among the largest participants, nor any other conduct that could suggest a restriction or distortion of competition.
• The Commission also examined the market for voluntary health insurance, which has grown significantly, with total premiums increasing 3.5 times from 2019 to 2023. This market is highly concentrated, with the top four insurers (Generali, Dunav, Wienner and Uniqa) holding an approx. 84 % market share. However, with the entry of new participants since 2020, the level of concentration has started to decrease. The insurance companies stated that overall competition conditions are satisfactory, but noted key challenges, including weaker negotiating position with private health institutions, frequent price changes and the absence of a unified service nomenclature. The Commission took these concerns into account and its only two recommendations relate to these issues:
  • recommendation to private health institutions to respect the principles of predictability, transparency and non-discrimination in relationships with insurance companies;
  • invitation to the Ministry of Health to consider and analyse the necessity of developing a healthcare services nomenclature applicable to all healthcare institutions.

The ongoing sector inquiry of the pharmaceutical market, along with this Report, underscores the health sector as one of the Commission's enforcement priorities in Serbia. As these activities focus primarily on the prices of medicines and health services, the Commission used the sector inquiry to review the pricing policies of private health institutions and insurance companies. The Commission's recent shift in practice related to the exclusive distribution of medicines (e.g. abolishing the individual exemption for the exclusive distribution of medicines subject to public procurement) indicates that it intends to prevent the creation of a market structure and market relations that could lead to higher prices in the pharma industry. Market participants are advised to closely monitor the Commission's future activities in this sector and ensure that their commercial policies comply with competition law principles.

authors: Zoran Šoljaga, Marija Stojanović