The present paper provides first empirical evidence on the relationship between market size and the number of firms in the health-care industry for a transition economy. We estimate market size thresholds required to support different numbers of suppliers (firms) for three occupations in the health-care industry in a large number of distinct geographic markets in Slovakia, taking into account the spatial interaction between local markets. The empirical analysis is carried out for three time periods (1995, 2001 and 2010) characterizing different stages of the transition process. Our results suggest that the relationship between market size and the number of firms differs both across industries, and across periods. Furthermore, we find evidence for correlation in entry decisions across administrative borders.