Update 11 March 2025

Spring has arrived. As I am writing this, we are having consecutive beautiful days with sunshine and warmth. With spring, comes more news related to the Dutch healthcare sector:

• Report highlights that commercial nursing home operators provide high quality care. What are the main conclusions?
• Minister reiterates refusal to forbid private equity investments in the healthcare sector. What is the story?
• Bergman Clinics is making a new acquisition. Can Bergman continue growing in the Netherlands though acquisitions?
• Arts en Zorg grows its primary care activities. What will be the company’s next steps?
• Chipsoft is launching partner for Microsoft’s healthcare focused AI-platform. What will be the impact on Chipsoft’s market position?

Report highlights that commercial nursing home operators provide high quality care

In many countries there have been recent scandals regarding the quality of care provided by commercial nursing home operators (USA, England, France, etc.). A year ago, a study by EY commissioned by the Ministry of Health concluded that private equity ownership did not have adverse effects on quality, accessibility and costs of care. This study looked at private equity ownership across all sub-sectors of the Dutch healthcare market.

A recent study has been conducted by staff at two leading Dutch universities and staff at the ACM (The Dutch Authority for Consumers and Markets) comparing the quality of services provided by commercial and non-commercial nursing home providers in the Netherlands. The main conclusions of the study are that there is no evidence for negative actions from commercial providers. It does not appear that they “cherry-pick” less demanding clients nor that they charge more than non-commercial providers nor that the provide lower quality services.

The lead-professor in the study was surprised at the results as the incentives (long-term profit maximization) are the same for commercial operators in the Dutch market as in other markets. He believes that there are a number of reasons for commercial nursing home providers in the Dutch market to be “better behaved:

• The overall quality of elderly care is high, and the commercial operators need to provide high quality care in order to be competitive
• The commercial providers rely on the same government payments for care as their non-commercial competitors. The client’s right to appropriate care is decided through an independent vetting procedure, thus limiting the opportunities for cherry picking
• Finally, the commercial providers have to follow the same rules, quality guidelines and purchasing criteria as the non-commercial operators.

Overall, it appears that the Dutch model of all care being provided by a mixture of commercial and non-commercial independent organizations but with a relatively high degree of government oversight works fairly well.

Minister reiterates refusal to forbid private equity ownership in the healthcare sector

As part of an overall discussion on the role of commercial healthcare providers there is an ongoing focus on the role of private equity in the Dutch healthcare sector. In spite of reports highlighting the positive effects of private equity investments and legal issues related to forbidding one specific asset class from investing, there is a majority in Parliament that wants to forbid private equity to invest in Dutch healthcare operators.

Last week, the Dutch Minister Health (from one of the parties that voted for a motion to forbid PE-investments) again provided four reasons why she will not forbid PE-investments in the Dutch healthcare sector. Firstly, she believes that a ban on private equity will have negative consequences for the availability and continuity of care as operators could potentially go bankrupt. Secondly she believes that a ban would reduce funds available for crucial investments that are required to keep the Dutch healthcare system up and running. Her third reason is that a ban on PE-investments would not have hindered historical “excesses” as these were often caused by commercial operators without PE-financing (such as Co-Med) or by non-profit healthcare providers. Finally, she again states that there are legal reasons that make it impossible to ban one type of owner from the market.

As in all other countries, the Netherlands will continue to have discussions related to commercial provision of healthcare services and it is likely that there will always be a number of parties in Parliament that support a ban on PE-investments in healthcare. However, it is very unlikely that this will translate into serious issues for private equity investors interested in the Dutch healthcare market.

Bergman Clinics makes a new acquisition

Keizer Kliniek is a mid-sized chain with four specialized clinics. The chain has now formally been acquired by Bergman Clinics, the largest commercial chain of specialized clinics in the Dutch market. The acquisition has been approved by the NZA (Dutch Healthcare Authority), and it is expected that the four clinics will shortly be rebranded. This is good news for Bergman Clinics as it has had a rocky road regarding acquisitions recently.

Both the NZA and the ACM (Dutch Authority for Consumers and Markets) have in recent years become more active regarding M&A in the healthcare sector and insurance companies have raised issues relating to the growing market power of Bergman Clinics in certain areas of the market. This has resulted in previous acquisitions being refused. The refusals have at least in one situation been overturned on appeal, but without any benefit to Bergman as the company had already been sold to another party.

Arts en Zorg grows primary care activities

In the last twelve months we have often written about the challenges facing the primary care sector in the Netherlands and the problems of Co-Med. Arts en Zorg has been a positive exception to the overall negative news about the sector. Arts en Zorg owns more than twenty successful primary locations providing GP-care to more than 200.000 patients. In addition, the company provides primary care services to specific patient groups such as asylum seekers, military personnel, and prisoners. It was recently announced that Arts en Zorg has won the contract to provide primary care in eight prisons.

Arts en Zorg has kept a fairly low profile during the last few years, but is clearly interested in growing in overall business. It will be interesting to see whether future growth will come from generalist primary care or increased focus on care for specific groups.

Chipsoft is a launching partner for Microsoft’s healthcare focused AI platform

Chipsoft is often in the news due to its high margins and very large market share in hospital EPD systems. It was recently announced that Chipsoft will be one of three global “launch partners” for Microsoft’s Dragon Copilot AI-solution for the healthcare sector. Dragon Copilot will focus on helping healthcare organizations streamline administrative processes such as documentation, and finding medical information through a combination of speech recognition and AI-capabilities. Given Chipsoft’s 80% market share in Dutch hospitals it is a valuable partner for Microsoft and the new capabilities will probably increase vendor lock-in to Chipsoft’s EPD systems. What the view will be from the Dutch anti-trust authorities (ACM) remains to be seen.