Vardetun, consultancy innovation healthcare


Update 12 April 2022

Update 12 April 2022

At the beginning of 2017 I saw an increasing interest in the Netherlands from international healthcare operators and investors. In May 2017 I decided to provide my international contacts with a bi-weekly update on the Dutch (commercial) healthcare sector. The first update gave news about Acibadem entering the Dutch market with a new hospital, staffing issues in the elderly care sector, and a snapshot of Domus Magnus.

We are now five years further and the commercial nursing home sector is dominated by French providers, international private equity has made major investments  in mental healthcare (Mentaal Beter) and private clinics (Bergman and Equipe) and numerous smaller investments. In addition, international property funds are very active and there is ongoing interest in other types of healthcare related companies.

This is the 100th update that I have published. Along the way the number of subscribers has steadily increased and now includes a mixture of senior executives from international healthcare operators, partners at private equity company, real estate investors, and a surprising number of Dutch readers (who clearly enjoy getting an external and more commercial view of the healthcare sector). Onwards to the next 100 updates.

In this update we cover:

  • Problems in the Dutch mental healthcare sector lead to closures of locations. Good news or bad news?
  • Minister claims that no additional nursing homes will be built. What are consequences for the sector?
  • Technology update. What will be next?

Problems in the Dutch mental healthcare sector

The Dutch trade organization for (traditional) mental healthcare providers has recently announced that many of its members are making large losses so far this year. The losses are mainly due to a combination of Covid-related issues. Revenues are down due to higher sick leave (three percentage points higher than comparable periods) and increased no-shows from clients.

In addition, companies claim that the new payment model for mental healthcare leads to lower revenues. Finally, some of the larger providers (Parnassia and Pro Persona) have not yet finalized contracts for 2022 with the healthcare insurance companies. Potentially as a response to this, both companies have recently announced closures of key locations. Parnassia is a part-owner of PsyQ. PsyQ is a chain providing ambulant mental healthcare across the country, but recently announced that it is closing its Amsterdam location. Pro Persona also recently announced that it is closing its center for psychotherapy. According to both organizations, closures are required due to the locations being structurally loss-making.

Many, if not most, traditional Dutch healthcare operators need to rationalize their overall business and service portfolio. Part of this process will include stopping with activities that are structurally loss-making. If the government and/or healthcare insurance companies are unhappy about this, then they will need to make the tariffs more attractive.

No extra nursing home capacity to be built

Recently the Dutch Minister responsible for long-term care (Conny Helder) announced that as far as she is concerned there will be no additional nursing capacity developed in the Netherlands. Given that the number of people older than 75 years and clients with dementia is expected to double in the coming years this statement raised some eyebrows. Actiz, the branch organization for long-term care, reminded the Minister that the government has recently committed to developing 50.000 additional nursing home beds and another 50.000 senior living apartments.

The statement is clearly in line with the stated goal of the government to keep elderly people “at home” for as long as possible but does raise some questions regarding how this will be carried out. The two most plausible explanations for what the statement entails are:

  • Instead of nursing home beds the government will focus on developing senior living locations where homecare can be provided efficiently and effectively (even up to end-of-life assistance)
  • The government will increasingly push for contracts between elderly care providers and the healthcare insurance companies that do not include payments to cover real estate and hotel-costs (VPT contracts)

The two explanations are linked as care provided to clients living in a senior-living location will never include a real estate component. Such a transition will save the government a large share of the costs related to elderly care by pushing these payments to the client themselves. Net savings will be lower, as elderly people with low pensions will then need to receive rent-support payments.

Commercial providers of nursing home care today typically are financed by VPT-contracts, so this will only mean minor changes for them. However traditional (non-profit) elderly care providers typically have a high share of contracts that include real estate payments (ZIN-contracts). For these organizations a move towards senior living and VPT-financing will entail:

  • The need to develop new business models with service offerings that are broader than care only
  • Growing importance of being able to provide modern and attractive locations
  • focused on the individual needs of specific market segments (demographics, willingness and ability to pay for services, specific wishes, etc.)
  • Necessity to work together with non-healthcare parties to develop and manage new locations (real estate investors, commercial providers of additional services, etc.)
  • More uncertainty regarding revenue streams and margins

Commercial providers are probably better positioned for meeting these new challenges as the changes to their business model will be relatively minor. It will be interesting to see how the traditional (non-profits) organizations reposition themselves.


Technology update

The Dutch healthcare sector generally scores highly on quality and use of new technologies. However, change also entails stopping with old technologies. It is with pride that we can announce that one of the major Dutch hospitals recently announced that it can no longer be reached by fax. It has decided to stop using fax as a key technology as it feels that there are now other technologies available such as secure email.