Espicom View: The construction of 15 city hospital complexes will be beneficial for the medical device companies that are to be commissioned to equip the facilities. Philips has expressed a strong interest in taking place in the bidding process, stating that Turkey is its third most rapidly growing market and that it has the technological potential to meet the requirements of the hospitals to be established. The project aims to modernise health services and address a number of problems in the system, such as delayed medical examinations and physician shortages, which would be advantageous to patients. However, the European Society for Emergency Medicine has raised concerns about the forthcoming hospital fees, believing they will be very high as the plan is for the hospitals to be built to five-star quality.
In September 2013, the Ministry of Health (MoH) launched a US$7.5bn project that will involve the construction of 15 city hospital complexes in 14 cities across Turkey. The project forms part of Prime Minister Recep Tayyip Erdogan's reform plans to transform the nation's health system, that were initially drawn up in 2002. Large urban hospital complexes providing a number of medical services will be established in several provinces over a 30-month period, substantially increasing the number of hospital beds in the health system and bringing Turkish healthcare standards up to those found in most developed countries. The complexes will operate under a public-private partnership model in which the government will lease the hospitals to private companies and pay the handling fees for their services in the areas of medical imaging, laboratories, information processing, security, maintenance and catering. The government will only directly pay the salaries of healthcare personnel.
High-Capacity Facilities To Raise Demand For Medical Devices
The MoH has awarded contracts for the construction of the city hospitals which will include departments in several branches of medicine including oncology, gynaecology, orthopaedics, paediatrics, general surgery and psychiatry. The complexes will also include congress centres, high technology & R&D centres, and shopping centres & hotels for patients' relatives. The development of these campuses will create 100,000 jobs. The hospitals will be much larger than existing facilities, with 1,500-bed capacities. Two of the 15 city hospital complexes will be constructed in Ankara. The Bilkent City Hospital will be built on a 1.2mn square metre site, and the Etlik Integrated Health Complex, which will be one of the largest health complexes in the world, will be built on a 1.4mn square metre area at a cost of TRY2.4bn (US$1.2bn). The project will impact the medical device industry when domestic and foreign companies come to compete for contracts to supply medical devices to the new facilities. A project of this scale will noticeably boost the revenues of the successful companies. Foreign companies are expected to win the bids for much of the advanced medical equipment as Turkish manufacturers mainly concentrate on the production of cheap, low-technology items, such as bandages and syringes.
Strong Growth Expected In the Turkish Medical Device Market
Turkey is the largest medical device market in the Middle East & Africa region, valued at US$2,437.7mn in 2013. BMI Espicom expects the market to expand at a CAGR of 8.5% over the 2013-2018 period, due not only to strong import growth and increased health spending, but also the expansion of healthcare facilities. The city hospitals project may impact market growth if it is completed as planned.
|Positive Market Growth|
|Projected Medical Device Market, 2013-2018 (US$mn)|
|Orthopaedics & prosthetics||357.3||393.3||432.5||469.1||505.9||545.4|
|US$ Per Capita|
|Orthopaedics & prosthetics||4.7||5.2||5.6||6.0||6.4||6.9|
|US$mn % Change|
|Orthopaedics & prosthetics||9.1||10.1||10.0||8.5||7.9||7.8|
|Source: BMI Espicom|