Estimates suggest that a medium-sized European hospital needs 5–8% of its annual budget reinvested in equipment and technology.
This is just to maintain standards, and it should be closer to 10–12% if it wants to remain competitive at the cutting edge. But are they equipped for such actions?
But are they equipped for such actions?
What You’ll Get Out of This Blog Post:
- Why healthcare requires constant reinvestment,
- The healthcare innovation–finance disconnect
- Lessons from Norway vs. Croatia and the role of intermediaries
Written by: Barbara Salopek* and Davor Katavić**
Why Healthcare Needs Continuous Reinvestment?
Few sectors reflect both human achievement and future necessity as clearly as healthcare. It is one of civilization’s greatest achievements – saving lives, extending life expectancy, preventing suffering. In Europe, with aging populations, rising chronic conditions, and growing expectations for quality and technology, healthcare is not just a public good but a key driver of social stability, scientific innovation, and economic growth.
But healthcare is also one of the most capital- and R&D-intensive sectors in the world. Unlike many industries where capital investments depreciate slowly, in healthcare constant reinvestment is necessary to remain competitive and provide safe, up-to-date treatment. New diseases (viral, emerging, antibiotic resistance), new treatment modalities (gene therapy, immunotherapy, precision medicine), new diagnostics, new equipment, new medical procedures and new accompanying legislation all require constant updating, investment, and innovation.
Some concrete examples of what must be invested in are:
- Digital health / AI / software: Implementation of diagnostic tools, decision‐support systems, AI & machine learning, telehealth systems.
- Advanced medical equipment: MRI, CT, PET scanners; robotic surgical systems; high‐precision diagnostic imaging; molecular and genetic labs. These can cost from €1 million up to €5 million+ depending on sophistication.
- Facilities and infrastructure: Hygiene standards, safety, digital infrastructure (electronic health records, telemedicine platforms, AI diagnostics), hospital/building maintenance; renovations to meet regulatory and accreditation standards.
- R&D / Clinical Trials: Hospitals or university medical centres may need to allocate significant budgets for research participation, trials, collaboration with biotech/med-tech startups. This includes staffing, labs, regulatory compliance, data infrastructure.
- Staff training: Doctors, nurses, technicians must continually retrain to use new equipment, adopt new procedures; and also to comply with international best practices and guidelines.
In the absence of consistent capital inflows, even well-run hospitals risk falling behind in quality of care.
This perpetual reinvestment requirement makes healthcare one of the most investment-hungry industries and highlights why better financial intermediation is essential.
Let’s learn from the best! Big Tech Seizes the Opportunities
Big Tech knows this well. Google, Oracle, Amazon, Apple and Microsoft are investing heavily in health data, precision medicine, wearables, and provider markets. Their investments are driven by consumer demand, demographic pressure, fragmented systems, and high administrative burdens. In other words: the potential is immense – and the big players know it.
- Google/Alphabet has invested billions through Verily (life sciences) and Calico (longevity research), while integrating AI into diagnostics.
- Apple has positioned the Apple Watch as a health platform, investing heavily in sensors and health monitoring.
- Amazon acquired One Medical for $3.9 billion, entering the primary care space and leveraging its logistics infrastructure for pharmaceuticals.
- Microsoft invested in AI-driven healthcare analytics and cloud solutions, strengthening its role as a backbone for digital health records.
These moves are not altruistic — they reflect recognition that healthcare, with its $4.5 trillion market size in the US alone, is both resilient and growth-driven.
The obstacle to overcome: The Healthcare–Finance Disconnect in Europe
Meanwhile in Europe, especially in the fast-growing private healthcare sector, a silent but significant challenge persists. Healthcare providers – from polyclinics and specialized hospitals to private medical centres – often struggle to engage effectively with investors, banks, and financial institutions. The reasons are twofold:
- Limited financial literacy and preparedness among healthcare providers:
Medical professionals excel in patient care and clinical excellence but frequently lack the financial expertise needed to scale operations, manage complex budgets, or attract investors. Financial controlling, strategic planning, and transparent reporting are often underdeveloped or absent altogether. - Insufficient healthcare sector insight among investors and financial institutions:
On the other hand, many investors and banks perceive healthcare as too complex, overly regulated, and closed to itself. Without a clear understanding of sector-specific business models, risk factors, and growth dynamics, they hesitate to invest or offer favourable financing terms – even when opportunities are compelling.
The result is a repeating pattern of missed opportunities. Healthcare providers fail to secure the capital they need to modernize, expand, or innovate; the financial sector overlooks one of the most stable, resilient, and socially impactful industries in Europe; and patients may not get access to the most advanced treatments in a timely manner. This misalignment produces a paradox: a sector with some of the world’s strongest fundamentals struggles to attract sufficient investment.
And this disconnect plays out daily across Europe.
Croatia and Norway: A Tale of Two Systems
As an example, the contrast between Croatia and Norway highlights both the problem and the potential.
- Croatia spends around 8.1% of GDP on healthcare, below the EU average of roughly 11.0%.[1] This translates to average of 1 420 euros per capita[2], which is also well bellow EU average of 4 029 euros. Much of this goes to the public system, leaving private providers to rely on fragmented revenue streams and limited capital markets. Private clinics and polyclinics are expanding, but many providers operate without full financial controls, without standardized reporting, without investor‐friendly transparency. This limits their capacity to raise capital, update equipment, adopt new procedures, and expand. Growth potential is enormous – medical tourism, diagnostics, and outpatient care – yet financing often stalls because providers cannot present themselves in a way that satisfies investors’ expectations.
- Norway also spent 8.1% of its GDP on healthcare[3], which is below the EU average in relative terms. However, because Norway’s GDP per capita is higher, this corresponds to around €8 693 per person — about 124% above the EU average in absolute per capita spending[4]. Beyond its strong public system, Norway has encouraged private sector innovation, especially in digital health and health-tech. Norwegian startups and private providers are more likely to engage with investors, supported by structured financial reporting and state-backed innovation programs. This has created a fertile environment where healthcare providers scale faster, adopt new technologies earlier, and attract international capital. Gaps also exist, but they are being addressed. Public hospitals sometimes struggle with efficiency and cost-control. Startups are often led by clinicians or technologists with limited entrepreneurial experience. But Norway has built strong intermediaries to bridge the gap: Norwegian Smart Care Cluster, Oslo Cancer Cluster, Norway Health Tech, and others. They work together to help investors understand the sector and support founders in becoming investor ready. Add to this a strong legal framework and reliable institutions – and Norway’s ecosystem shows why its ambitions are so high.
The lesson is clear: without proper financial structures, even a growing healthcare market like Croatia’s risks underinvestment. With them, as Norway shows, healthcare can become an investment that balances social need with financial opportunity.
Who can help and how? The Role of Expert Intermediaries: Building trust
The healthcare–finance divide is not inevitable. What is needed are expert intermediaries that understand how innovation works and who specialize in bridging healthcare providers and the finance/investment world. Platforms and expert services that can:
- Equip healthcare providers with financial literacy, controlling systems, and investor readiness where innovation is in the focus
- Translate complex healthcare business models into language the financial sector understands
- Provide investors with reliable, sector-specific insights into healthcare innovation opportunities and risks
- Build trust, reduce uncertainty, and facilitate responsible innovation investment flows into clinics, hospitals, and health-tech companies that would otherwise remain overlooked
- Ensure that growth in the healthcare sector is innovative i.e. financially sound, transparent, and sustainable
These intermediaries would help providers become both innovative and “investor‐ready” (financially transparent, controlled, predictable), and help investors understand healthcare business models and risks. They would not only unlock new capital for healthcare providers but also create confidence among investors, policymakers, and the wider public that healthcare growth is being managed with both care and competence.
And this is not just theoretical. In Norway, structured support has already led to increases in healthcare investment. In Croatia, where such intermediaries are absent, many opportunities remain unrealized.
Conclusion: Europe Cannot Afford to Miss This Opportunity
Healthcare is not just a social good – it is one of the most promising sectors in Europe – socially, scientifically, economically. It is R&D-intensive, capital-hungry, and driven by unstoppable demographic trends. With proper financial structures, it could become the foundation of Europe’s global leadership. But the gap in investment and structure is real and will grow if not addressed.
Europe already has excellent universities and medical research institutions; high standards of care; growing private and public healthcare providers; and a population increasingly demanding advanced, personalized, efficient healthcare. If structured well, Europe could be a global leader not only socially and scientifically, but also in business, in biotech, medical tech, health-tech and related fields.
But to seize this opportunity, Europe must overcome the financial communication gap that holds the sector back. The lesson is clear: when healthcare providers and the financial sector speak different languages, both sides lose. Only with the right innovation structures in place, healthcare can become one of Europe’s most attractive and socially valuable investment sectors.
Success in healthcare innovation requires bringing together finance, entrepreneurship, and innovation skills, and coupling them with medical and biotech expertise. Medical founders and clinic owners need to realize they cannot do it all alone – they must partner with those who understand business. Investors, in turn, need to open up more to the healthcare sector, despite its complexities.
The time to act is now. Europe cannot afford to leave healthcare underfinanced – not for patients, not for providers, not for its global leadership. Bridging finance and healthcare is not just an opportunity. It is a necessity.
[1] Data is for 2023. Source: https://www.oecd.org/content/dam/oecd/en/publications/reports/2023/12/croatia-country-health-profile-2023_9d50640a/8a7eadc9-en.pdf
[2] https://www.hnb.hr/en/statistics/main-macroeconomic-indicators
[3] Data is for 2022. Source: https://www.ssb.no/en/nasjonalregnskap-og-konjunkturer/nasjonalregnskap/statistikk/helseregnskap
[4] Data is for 2022. Source: https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20241115-1
*Barbara Salopek is the founder of Vinco Innovation, lecturer at BI Norwegian Business School, and a member of the Bergen Chamber of Commerce Health Expert Group. She is an international innovation strategist, TEDx speaker, and author of the upcoming book Future-Fit Innovation.
For more information, visit https://barbarasalopek.com/ or connect with her on LinkedIn – https://www.linkedin.com/in/barbara-salopek/.
The views expressed in this article are her own and do not represent the positions of the institutions with which she is affiliated.
** Davor Katavić is CEO and consultant at Desiderius Consulting, with more than 20 years of experience in healthcare finance, management, and reform across both public and private sectors. Davor specializes in healthcare optimization, institutional reforms, financial sustainability, and e-health strategy across Europe.
For more information, visit https://www.desiderius-consulting.com/en/ or connect with him on LinkedIn – https://www.linkedin.com/in/davor-katavic/.
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