Lockdown Economy Hungary in a Diagnostic and Clinical Research Center with Dávid Gulyás
The interview was transcribed and adapted into an article by the local interview host László Juhász
Lockdown Economy: Interviews by think tank AlterContacts.org with real entrepreneurs sharing insights, challenges and successes during the COVID19 global pandemic to inspire, motivate and encourage other entrepreneurs around the world.
In this interview, we meet Dávid Gulyás, the legal and strategic manager of Clinexpert Ltd, a diagnostic and clinical research centre in Budapest, Hungary. In the spring of 2020, the first wave of the pandemic hit everyone as a surprise. In the beginning, the number of patients looking for diagnostic services decreased significantly compared to normal times. In contrast, at the beginning of the summer, due to the strain on public healthcare capacities, they experienced increased demand. As for their contracts in their clinical drug research profile, projects were mostly suspended due to the uncertainties in this period. They have maintained a safe operation with extra effort throughout the whole crisis, which, however, involved significant additional costs. The challenges of the second wave have been addressed more routinely by the company, its partners, and its patients as well. Although with a decreased turnover, they carry on, and they look forward to the end of the crisis. In the long run, the company hopes that they will be able to take part in new pharmaceutical research projects as the innovation activities in this industry significantly increases due to the COVID-19 pandemic.
Please, introduce the Clinexpert Ltd. What is the company’s profile, and how many employees do you work with?
Dávid: Our company is a classic micro-enterprise, a private healthcare provider with its headquarters in Budapest. We provide private, out-patient healthcare services. Within this, the gastroendoscopic clinic is perhaps the one with the highest turnover and professional emphasis. Our other profile is the outpatient clinical trials and applied medical projects. In connection with this second activity, our subsidiaries operate in the towns of Gyöngyös and Tatabánya. As I mentioned, we are a classic micro-enterprise. We work with four permanent employees at the Budapest office. Related to both activities, we also work with many contractors (doctors and health professionals) as well.
Let us look at how the pandemic affected the business (during the first wave, in the summer, and now during the second wave). What can you tell about your customer base?
Dávid: As I mentioned, we have two main areas of activity. I would analyse these separately because they experienced different impacts. Otherwise, for both waves, our experiences are also different. The first wave was terribly unexpected. It is true that both activities involve a lot of personal contacts. In both outpatient care and during the clinical trials, physicians meet the patients. This is terribly difficult during the pandemic. In outpatient care, in the beginning, there were a lot of cancellations. People were afraid, thus, especially in the case of the non-urgent outpatient care activities, fewer of them came. Therefore, we had to reduce our supply capacity as they were not utilised. This changed relatively quickly. Due to the preparation for the pandemic, the availability of public health care services decreased considerably at the state-financed providers.
This applies to the first period, right?
Dávid: Yes, this is the first wave, in the spring. Patients who did not receive care at public providers clearly went to private ones. In May and June, we experienced an increased turnover in our outpatient care unit compared to the classic early summer periods because patients in public care facilities could not access sufficiently the services they needed.
In clinical trials, another process took place in the first wave. There, a significant number of pharmaceutical companies funding such projects took an explicitly cautious attitude. Thus, they suspended clinical trial projects in that current status at the time. Specifically, they did not initiate new ones, suspended the patient enrolment period or the entire clinical trial project. The authority that oversees this sector issued a resolution that emergency medical care should be provided, but new patients should only be included in such trials after a proper risk-benefit consideration. As a result, 30 to 40 per cent of the planning became terribly difficult. The projects involved are multi-annual ones: with commitment numbers, deadlines, milestones. The planning and proper implementation of these became very difficult. This was typical of the first wave.
In addition, with regards to both of our activities, a health care provider can only respond properly to the pandemic situation by preparing and maintaining large stocks of disposable medical equipment and protection tools. On the other hand, a company like us must develop internal processes for virus management. We started this second activity very early. Pre-contact triage screening was put in place for outpatient care, and airlock-separated monitoring for clinical trials. These were arranged very quickly and communicated with our partners and our patients. Thus, a particularly safe operation was ensured.
So, this is a very important issue. Did you specifically communicate this to your patients and partners?
Dávid: This is a B2B sector in terms of the clinical trials. The partners also specifically looked for the remaining test facilities that could take on some function even during the pandemic.
If I understand correctly, in terms of day-to-day operation, you had to make several changes. Overall, however, the pandemic situation may have even helped the company’s operations, as you are in a sector where there was an extra demand for outpatient diagnostic care. Given that certain services at public providers were suspended.
Dávid: I would rather say that the otherwise severe situation because of the definitely decreased turnover, especially in the spring wave, was somewhat offset by an increase in outpatient care. But even this only applied at the end of the first wave.
So, one of your main activities, that is the clinical drug trials based on long-term planning. As for it, there were interruptions. However, in outpatient care …
Dávid: There was some increase in turnover in the second half of the wave.
I understand.
Dávid: What was very difficult for us as a micro-enterprise is that we are not a state-funded health care provider. This means that we did not receive from the shipments of disinfectants and the purchases of protective medical equipment organised by the government at that time. So, we had to go out into the market in the same way as the state itself did, and we also had to get the protective equipment available at a price that was highly raised at that time, directly from the market, reaching out to our network of partners, sacrificing serious financial reserves for it. In this way, however, we were able to ensure a safe operation. With regards to this, we made a serious strategic decision. Even though the price of a mask changed from 150 Forints (40 Euro Cents) to 850 Forints (2.4 Euros), we still had to buy, because we decided to guarantee the safety of our daily operations. Even if, in this given period, this significant change (in terms of costs and revenues) will result in loss.
So, you have experienced a serious increase in costs. What can you tell about the second wave?
Dávid: Yes, and we could not include the extra cost in the price of any of our services, not even a part of it. It was a loss. In the case of the second wave, however, the situation has changed as we, our partners and the patients now have a routine. Thus, everyone acts quite differently. We know where the risk points are, so things go much smoother. The work we did during the first wave now yields twice. The altered internal processes, the stockpiling, and the partnerships that have been established at the time, now give us an edge.
You mentioned earlier that while your activities were mostly reactive in the first period, you addressed the problems that arise. Then, now, you are much more experienced in the second period. You also mentioned things here that are strategic decisions that worked well. Could you mention something you tried, but did not work well?
Dávid: We learned the lessons from the first wave. We tried to further refine these processes. In our activity, we also tried to prioritise those services on one the one hand, and those clinical trials on the other hand, that had a greater importance and emphasis during the pandemic. Thus, in outpatient care, as for our endoscopic unit, we have tried to prioritise patients who have a high-risk factor, a serious problem, or possibly an oncological risk. We strived and are striving to prioritise this way. While in the clinical trial unit, we looked at whether the benefits of available therapy outweigh the risks associated with participation, and whether it affects the groups of patients whom the coronavirus infection may pose a huge risk.
How do you see the near future of your business?
Dávid: Basically, we constantly follow the relevant news, because we must maintain this crisis operation as long as this situation exists. It should be emphasized that compared to normal operation, currently, what we have now is far below normal. This applies to our turnover as well. Of course, in our sector too, the salaries are the greatest financial burden to the company. This now applies to the staff currently reserved for normal operations. This cannot be sustained indefinitely as a micro-enterprise. It does matter when the normal operation could be restored. This is one of the dimensions influencing our short-term prospects.
The other thing that might even be positive for us is that the situation caused by the coronavirus mobilises now an astonishing amount of innovation in the pharmaceutical industry. We see this in everyday life as well. However, this is true not only for coronavirus research, but for a plethora of areas in healthcare. So, in the medium and long term, there will be several clinical research projects on coronavirus and beyond where we may be able to participate. This could have a positive impact on our clinical research portfolio. This is definitely promising.
Finally, I would like to ask you to name three things your business would need help with!
Dávid: I mentioned the issue of employment and wages. I think that the government has also a great responsibility and interest in helping micro, small, and medium-sized enterprises maintaining their operations. I think there is still a lot that can be done by the government to help us going through these difficult times, especially for companies of a similar size or slightly larger than us. It does really matter that at the end of the pandemic if there will be only ruins and ashes where once small businesses were, or there will still be companies capable of restarting their activities. Measures to facilitate employment would be of great assistance in these months.
Another thing, making certain products more accessible, or even state-subsidized or tax-reduced would again be a very good direction as well. This is true for masks, disposable equipment, hand sanitisers, and things like that. Moreover, I would be so bold to say that anyone who provides public or privately funded healthcare during this period should be eligible for some form of value-added-tax reduction for all disposable medical tools. The fact that healthcare is addressing the coronavirus situation is a very important and acute task. But making sure that healthcare can fulfil its primary function is another very important issue. This should be facilitated where it is possible.
Indeed, what you mentioned are issues that require state intervention. Mostly, it means legal regulation, tax regulation, and economic recovery measures, in which the state could help your business.
Dávid: Yes.
All right. Thank you so much, Dávid for participating in the first episode of our interview series in Hungary!
Dávid: I also thank you for the opportunity!
About the Guest
Dávid Gulyás is the legal and strategic manager of Clinexpert Ltd. The company is a private healthcare provider and a clinical research centre founded in 2004. In addition to their headquarters in Budapest, they have subsidiaries in the towns of Tatabánya and Gyöngyös. One of their main activities is outpatient diagnostic care, especially in the field of gastroenterology. According to their philosophy, “Recovery cannot wait.”. Their highly trained professional staff, therefore, do their best to ensure setting their patients on the path to recovery with the most effective, fastest and most gentle care. As for their other main activity, they conduct clinical trials in pharmaceutical research for more than a decade in the fields of gastroenterology, internal medicine, diabetes, neurology, psychiatry, rheumatology, pulmonology and cardiology.
You can find out more and contact Dávid and Clinexpert Kft through their website: https://www.clinexpert.hu/