Outstanding performance by V4 healthcare providers
Balázs Vajai, Vice President of Finance and Accounting at Delta Technologies, has published a recent co-authored paper in the prestigious scientific journal Sustainability. In the Swiss-edited periodical, Hungarian researchers have come up with some surprising results by looking at the financial performance of healthcare companies in the V4 countries over the past 10 years.
Outstanding scientific achievement in practice
A paper by Balázs Vajai, Vice President of Finance and Accounting at Delta Technologies, and his co-authors has been published in the Swiss scientific journal Sustainability. Balázs and his co-authors examined the 10-year financial time series of private healthcare providers in the V4 countries. We discussed the study, data analysis and the practical use of economic models.
What have you investigated and what are the results of the study you have just published?
In this study, four of my co-authors and I examined the 10-year balance sheets and profit and loss accounts of around 20,000 private healthcare providers, effectively SMEs, in the V4 countries. The result, very simply put, is that the profitability and liquidity ratios of the V4 countries are similar, as are the survival rates of the firms. In the V4 region, healthcare firms have an outstanding profitability, with a 5-year survival rate of around 98% in all the countries studied, i.e. a very stable entrepreneurial class. This is striking because in the Hungarian economy as a whole this ratio is ~65%, i.e. roughly 65 firms out of 100 will survive the next 5 years, while only ~2 out of 100 health care firms will go out of business. The study has focused on the 10-year trends of these firms and the environment, from which we have tried to draw general conclusions.
The current study was written as a PhD student and published in the top 25%, the so-called Q1, scientific journal. Do you consider yourself more of a theoretician or a practitioner?
I'm lucky because as a theoretical expert I can apply my knowledge on a practical level; I'm a bit of a data analyst, a bit of a finance frontier. Of course, this is nothing new, few people today can stay within the confines of a single discipline. And I like it, because getting to know the world and thinking about it is important to me, and I want to find connections by reinterpreting the familiar and creating new models. This is what we did in this study; after writing the paper, we were first given peer-reviewed status, then peer-reviewed by 3 international blind editors, followed by the editing. It was not an easy process, but it was worth it. This out of box approach is also exemplified by the workflow in Delta. Hungarian accounting rules, for example, value the past according to specific rules, with standardised values for the future. In comparison, the international standards already used in our country, such as IFRS, offer a much broader range of possibilities in practice and are more representative of the financial approach.
How did you get interested in data analysis?
Even as a banker, I was involved in financial analyses and models, even if the computing capacity requirements of the model I was running meant that the bank's customer service was down for a few hours. Not everyone liked and understood what I was doing and why, but the results were measured in billions. Later, as head of risk management at the National Deposit Insurance Fund in 2016, I put together the model for risk-based fees for credit institutions that is still in use today. At that time, part of the growth plan included the acquisition of companies and then the financing of the group, one of my tasks was to expand Delta's financial possibilities and scope, or rather to point out risks. The implementation of financial transactions had to be in line with the MNB and the legal requirements in force. Following the successful acquisitions, I have been Deputy Director of Finance and Accounting since the beginning of 2022, including the financial preparation of the transition to IFRS.
Your publications so far are diverse, covering agriculture, banking, fintech, capital structure, innovation. How can you be at home in so many fields?
At first glance, they may seem unrelated, but the main thing they have in common is financial and accounting data; this is what I am concerned with, because from the multiplicity of them, we can see the trends and directions that we can understand business operations by looking further. Understanding also means, of course, that we can segment companies and make informed, quantifiable decisions about which sector we want to operate in, for example, and, by digging deeper, we can also find out which companies we want to partner with and which we don't want to do business with. It works in a pretty similar way to credit rating, for example.
How compatible are PhD studies with your work?
I spend a lot of my free time on my PhD, because I'm not just studying, I teach statistics to second-year students at the University of Sopron, for example. This is also a bit of a solitary activity, it requires a very different type of thinking than, for example, collaborating on marketing processes. It's not the calculation part that is the biggest challenge, but looking behind the numbers and interpreting the information and understanding the relationships. The good news is that I can use this in my day-to-day work.
