Update 8 February 2019

This last week has been an exciting and very interesting week with the start of a public debate on key issues related to foreign investments in the Dutch healthcare sector and a public forum for my thoughts on these issues. For the rest, the last couple of weeks have been relatively quiet, so the focus of this update will be what has been happening this week.

Verstegen Accountants is the market leader in the Dutch healthcare sector and every year develop a database on the financial results of all operators in key sectors of the Dutch healthcare sector. One of these sectors is the nursing home sector. Based on public data, I have analyzed the future the growth in seniors requiring nursing home care in each Dutch municipality. Translating this into a need for new nursing homes, I have developed a list of 100 municipalities where there will be a need for at least one new nursing home (capacity 100 beds) in the next few years. Verstegen Accounts and I then looked at the financial health of the leading provider of nursing homes in these municipalities. The conclusion of this analysis was that in two thirds of the municipalities the current incumbent (always a non-profit foundation) would not be able to finance the development of the new locations.

This analysis was picked up by the leading financial newspaper in the Netherlands and was also written up by the leading Dutch healthcare news-site. This will be followed up by a discussion in Parliament next week about how to provide the elderly with optimal housing.

In our analysis we suggested that international operators with their broad experience and strong capital base would be a possible solution to the required investments in new nursing homes (estimated at €4-5 billion). This led to a number of articles highlighting the recent activities of Orpea in the Dutch market and an article highlighting the increasing interest of foreign companies in the Dutch healthcare sector. In general, these articles were positive, although some negative aspects and possible threats to existing Dutch operators were also brought forward.

All in all, an interesting week which has highlighted international operators as a potential addition to the Dutch healthcare market. This is a positive development as it provides an opening for these companies to present themselves as providing value to the sector and to participate in the ongoing debate on how to deal with the growing number of elderly people.