Update 25 April 2023
I hope that you are doing well. As I am writing this, we are having our share of April showers and are getting ready for “King’s Day” on Thursday. “King’s Day” is officially a celebration of the King’s birthday but is actually an opportunity for the Dutch to put on every bit of orange clothing they have and turn the whole country into one giant garage sale. As always there is news to report from the Dutch healthcare sector:
- Actief Zorg seeks bankruptcy protection. Consequence of too many acquisitions?
- Golden times for temporary staffing companies in the healthcare sector. Will this continue?
- Primary care chains – status and future
- In a new snapshot we give an overview of Attenza, a provider of palliative homecare
Actief Zorg seeks bankruptcy protection
Actief Zorg is a large commercial provider of homecare services with more than 23.000 clients and wide geographical coverage. In earlier updates we have written about the ongoing series of acquisitions by Actief Zorg. The acquisitions were usually of companies in financial problems and questions have been raised whether Actief Zorg was able to turn the companies around.
Apparently, Actief Zorg as a whole now finds itself in financial problems. The company blames this on inflation, extra costs due to Covid, increased sick-leave among staff, staff shortages and increased administrative demands from buyers (municipalities and healthcare insurance companies). According to Actief Zorg, tariffs need to be increased but the buyers are slow to respond.
Actief Zorg has chosen a novel solution to these problems. It has collected a large part of its staff and support employees in a separate company and has declared this company (with 150 employees) bankrupt. Actief Zorg claims that this will not have any impact on the rest of its activities and 5.350 staff. One has to wonder what the 150 staff were doing and how Actief Zorg has managed to collect them all in one separate company that they have then been able to force into bankruptcy.
Golden times for temporary staffing companies
Finding and retaining staff is one of the key challenges facing Dutch healthcare organizations. For hospitals it is often crucial to have the right combination of staff with very specific skills and experience to be able to carry out planned operations, etc. To fill gaps in their planning hospitals (and other healthcare organizations) are increasing turning to temporary staffing companies. Often, they are making the situation worse for themselves by offering the temporary staff the most attractive working hours, thereby making their own employees even more unhappy.
To meet the need for temporary staff the number of (new) companies providing these services has quickly grown thereby increasing the competition for staff to be hired out to hospitals. As a consequence, temporary staffing companies are now offering their employees higher salaries and extensive benefits:
- Staff are typically paid one scale higher than what they would receive in a hospital according to the national collective employment agreement. This typically gives the employee €300-500 more salary per month
- Wide range of bonuses, such as a “welcome bonus” of €1.500 and a “summer bonus” of €1.000
- Company car for all employees working more than 24 hours per week and extra benefits for working more hours
- Company trips to Barcelona and the Alps
Hospitals are trying to increase retention of their staff by making direct employment more attractive, but are limited in how much they can increase salaries. However, given that the hospitals are paying the temporary staffing companies sufficiently to cover the costs of all the extras they provide, it should be possible to spend money to make direct employment more attractive.
Primary care chains – current situation and expected development
In our update of 7 February we wrote about quality issues related to primary care provided by commercial chains such as Co-Med. A recent study by Nivel (The Netherlands Institute for Health Services Research) has attempted to develop a structured overview of this new sector. Nivel suggests that between 45 to 230 primary healthcare locations (consisting of one or more General Practitioner doctors) have been acquired by commercial chains. The large spread in the number is due to definition issues and which type of chains are included in the sector. Nivel differentiates between three types of chains:
- Groups of GP-locations joining forces to increase efficiency and reduce costs
- Companies providing online platforms, apps, and other digital tools to be used by independent locations
- The true commercial chains where locations are owned, and GPs work as salaried employees
Nivel sees a number of factors driving the further development of commercial chains including growing shortages of relevant staff (GPs, but also other staff), young doctors choosing to work part-time and not take on the added responsibilities of running a location, and for those who are interested in working independently difficulties in financing the acquisition of an existing GP-practice.
Nivel therefore believes that primary care practices owned by commercial chains will become an integral part of the Dutch healthcare sector. However, more work is required to understand what the impact will be on issues such as quality of care provided, accessibility to primary care, and how commercially owned locations will fit in the overall network of both other primary care providers and other types of healthcare providers.
This is an interesting area which is in an early stage of a development process that we have already seen in the dental care sector. We will keep you posted.
Snapshot of Dutch commercial healthcare company: Attenza
Attenza is a homecare company specializing in palliative care. The company works with freelancers enabling it to provide 24-hour care with one caregiver. This gives the company an advantage, as traditional homecare providers working with employees cannot do this due to restrictions in collective labor agreements. Clients are typically referred to Attenza by hospitals, GPs, or homecare organizations.
Attenza has a core group of twenty-four employees in the Netherlands carrying back-office activities and staff in Indonesia working on IT-solutions and an app to connect caregivers and the central office. In 2021 Attenza had revenues of €7.4 million (up from €5.6 million in 2020) and had an EBITDA of approximately €1 million.