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By Ksenia Shcherbino November 2019

Russian market in private healthcare

Russia: a land

• f stereotypes

Soviet healthcare myth and cultural expectations

State dominated health care system has a number of drawbacks – yet it also drives certain expectations

No simple correlation

Although Russia holds the 6th place in the rank of billionaire, and yet 13 per cent of the population lives below the poverty line according to national standards, or twice that based on international norms. Despite its 1.6 growth, Russia’s economy is still smaller than Italy’s or Canada’s

National patient character and marketing strategy tricks

All patients are patients, but Russian patients can pose a certain threat to your equilibrium. Our Do’s and Don’t guide to handling Russian patients.

Uncanny valley effect

Too similar to invite a specific approach, yet too different to be easily understood

Current events – from Brexit to US-China tariff wars - have a definite impact on the healthcare trends and the choice of healthcare destination.

The oldest medical concierge in London, this year we marked our 11th

• anniversary. Having started with just a few patients (mostly friends and

family), we have evolved into a major private healthcare referrer and promoter of British healthcare helping over 2,500 patients every year.

2,500+

Patients per annum

3,000+

Consultants working in over 25 medical fields

11

Years of impeccable reputation

Timeline

2009

3 patients

In the first year AngloMedical signed a contract with Rusfond, the leading Russian charity. For 10 years we have been taking care of their patients in the UK, with around 20 children coming to London every year.

2013

Major partnerships

AngloMedical starts working with a leading Russian insurance company (SOGAZ of Gazprom family) and a number of Russian private hospital corporations facilitating international visits, master- classes and collaboration.

2014

Deputy prime minister Olga Golodets AngloMedical organised a visit of Olga Golodets, deputy prime minister for health and social affairs who met with a number of private healthcare companies in the U.K.

2016

CIS expansion

By 2017 AngloMedical has signed memorandums

• f cooperation with various CIS embassies,

charities and healthcare organizations expanding into Georgia, Kazakhstan, Ukraine, etc.

2018

2,773 patients - and we keep growing

AngloMedical ventured into Chinese market and participated in UK-China oncology congress. It’s all about patients regardless of where they come from or what language they speak.

Basic principles: the concept of fairy helper

Patient’s desires Patient’s needs Seamless pathway Get to know them Cultural expectations

What does the patient want? What does the patient actually need - and how to put it all together? What would be the quickest? Easiest? Healthies? What makes this particular patient different? Where they are coming from? Cultural expectations are different and have to be explained to the healthcare providers.

A successful international team must answer all these questions

Russian National Patient Character

CULTURAL

Russian patients demand attention and love being pampered. They need emotional involvement.

HISTORICAL

Russian patients are educated enough and often start an argument about their diagnosis. This is backed up by the myth of Soviet healthcare.

BUREAUCRATIC

they need letters signed in blue ink on headed paper and as many stamps as possible.

ORGANISATIONAL

The journey to securing the payment is never an easy one

1 2 3 4

Basic principles of Soviet healthcare

Where do Russian patients come from? What healthcare background shaped their expectations? Home healthcare market is the grand myth of Soviet healthcare, which implies that Soviet system was the best.

Soviet system of healthcare had a number of basic principles:

• importance of prevention
• emphasis on maternity and paediatric services
• equal and free access to healthcare
• centralized system of healthcare
• fight against the roots of disease (both medical and social)
• promotion of healthy lifestyle

Health care in the Soviet Union

Article 42. Citizens of the USSR have the right to health protection. This right is ensured by free, qualified medical care provided by state health institutions; by extension of the network of therapeutic and health-building institutions; by the development and improvement of safety and hygiene in industry; by carrying out broad prophylactic measures; by measures to improve the environment; by special care for the health of the rising generation, including prohibition of child labour, excluding the work done by children as part of the school curriculum; and by developing research to prevent and reduce the incidence of disease and ensure citizens a long and active life. ( Soviet Constitution, 1936)

Problems with quantitative approach to health care

ON THE RISE:

• the number of people

seeking medical care : from 3.5 million in 2000 to 3.9 in 2016

• Operational difficulty
• Provision of paid services

ON THE DECLINE: the number of hospitals :from 10,700 to 5,400 the number of hospital beds: from 1.6 mln to 1.2 mln, the number of polyclinics: from 21,300 to 19,100; the number of A&E centres: from 3,172 to 2,458 GDP allocated for healthcare: from 4.5% to 3.5% Quality of services provided

Initiatives of the current government

“The State cares for the health of its citizens”.

Quality vs Quantity

Doctors employed Life expectancy

Current health care issues

1 2 3 4

Unequal distribution of wealth between the regions Lack of funding and uneven allocation

• f available funding

Devaluation of the profession. Eminence-based system Inefficient changes and lagging of the system itself

5 6

Paternalistic and ideological attitude to health care Politicisation of healthcare and prioritisation of home-made product The Bloomberg Healthcare Efficiency Rankings place Russia at 53rd out of the 56 countries measured (UK – 35th).

• Russia’s goal of halving poverty to 6.6% by 2024 can be

achieved, even under a modest annual growth scenario.

• Growth prospects for 2018-2020 remain modest,

forecast at 1.5% to 1.8%. Higher-than-expected oil prices could favorably affect the growth forecast.

• A sound macroeconomic framework, with relatively high

levels of international reserves ($461 billion), low external debt levels (about 29% of GDP), and comfortable import cover (15.9 months), positions Russia well to absorb external shocks. http://www.worldbank.org/en/country/russia/publication/rer

Economic data by WTO

Key economic and diplomatic periods 2007 diplomatic row between Russia and UK over the death of Andrei Lugovoi 2008 Russian war with Georgia 2009 Thaw in the relationship between USA and Russia 2012 Russia joins WTO 2012 Magnitski law. Angered by a US bill blacklisting Russian officials in connection with the death in custody of lawyer Sergei Magnitsky, Moscow bans Americans from adopting Russian children and stops US-funded non-governmental organisations from working in Russia. 2014 Russia-Ukraine conflict and takeover of Crimea 2014 The EU and US announce new sanctions against Russia 2017 diplomatic tit-for-tat involving hundreds of diplomatic staff after the US Congress approved new sanctions for Russia's alleged meddling in the 2016 presidential election 2018 diplomatic row between Russia and UK over novichok poisoning

• f Sergey Skripal

2015 – 100,000 tourists 2016 – 50,000 medical tourists 2017 – 80, 000 medical tourists

Numbers of medical tourists

Complex treatments, surgeries, unique technologies 90% Cancer treatment 85% 2nd opinion and online MDTs 85% Catering to business and families 65% IVF and maternity 50%

Future of the Russian market

Charities Business & expat communities Medical tourism companies, study- abroad agencies

DO: Target audience

Changing profile of the Russian customer:

iIf 10 years ago the main emphasis on the Russian market was on the nouveau-riches who went for the most expensive offer, now even HNWI try to blend in and go for the moderate offer. Being careful, if not outwardly frugal with money, and getting the best deal possible became the new motto of Russian customers. Peculiarities of the Russian target groups State sponsored treatment is quite scarce (though possible), while charities are numerous and popular. Big companies are unlikely to sponsor the treatment of their employees, and big insurance groups are not wiling to send their patients to the UK as there are cheaper options on the market. Each audience demands its own marketing strategy

Typical gaps in the UK healthcare offer

DO: Define your offer:

How are you different? Why are you different? What are your prices? How competitive are you? What are your USPs?

• Lack of marketing effort
• Lack of proper offer
• Lack of understanding one’s USPs
• Peculiarities of local healthcare

These countries rushed to the Russian market right after the dissolution of the Soviet union, and are traditional considered to be top choice.

• ISRAEL: cheaper, no language barrier
• GERMANY: strong business ties, packaged
• ffers, known on the market
• USA: huge marketing budgets

To note: Russia is actively trying to become a new healthcare destination and develop its domestic offer.

DO: Be aware of other healthcare destination

• Forget about your marketing efforts.
• Skip structuring a proper offer.
• Keep silent about your USPs.
• Be too arrogant and take your healthcare

system for granted.

• Ignore your expat community

DON’T:

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ksenia@anglomedical.com +44 7848 685 087

AngloMedical Limited

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