Update 14 March 2019
Welcome to the latest update on what is happening in the Dutch commercial healthcare sector. In this update we cover:
- English homecare provider Heritage Healthcare to start operations in the Netherlands. Is the foreign interest in this sector growing?
- Law to transfer financing of long-term psychiatric care to central government is sent to parliament. Will this make the sector more attractive for international investors?
- Study by Deloitte highlights strong growth of Private Equity investments in Dutch healthcare sector. Will this growth continue?
- In our snapshot we give an overview of DermaClinic, a growing chain of cosmetic clinics
Heritage Healthcare to enter Dutch market
Home Instead, the American franchise organization focusing on homecare for the elderly is already active for a number of years in the Dutch market. They will now be joined by Heritage Healthcare from the UK. Heritage Healthcare focuses on offering a broad range of personal care and household care. They believe that the Netherlands will be an interesting market due to its combination of strong growth, a government that supports commercial initiatives in the healthcare sector, and the need for more efficiency in the care sector.
Home Instead entered the Dutch market with their US-based model of clients paying directly for the services offered but have had to evolve into a more traditional Dutch business model where services are paid for by municipalities as Dutch clients were relatively unwilling to pay out-of-pocket for this type of services. It will be interesting to see how Heritage copes with Dutch culture and financing.
Law to transfer financing of long-term psychiatric care to central government has been sent to parliament
As mentioned in the update of 11 July 2018 a process is underway to undo the move of the responsibility and financing of long-term psychiatric care to the municipalities, as this has lead to increased complexity both for clients and providers. The change will have implications for approximately 11.000 psychiatric patients whose care is currently financed by the municipalities or the healthcare insurance companies.
In spite of opposition from various organizations representing Dutch municipalities, a new law to make this possible has now been sent to parliament. This should be good news to international companies interested in the Dutch disabled care sector:
- Simpler rules, regulations, and financing structures / tariffs as these will be determined nationally instead of individually per municipality
- Easier access to client following financing either through the current system of personal budgets or through the ongoing move of all WLZ-financing to system where the money follows the client (see update of 26 June 2018 for more details)
Strong growth of private-equity investments in Dutch healthcare
A recent report from Deloitte looking at mergers and acquisitions in the healthcare sector highlights that private investments in the Dutch healthcare sector have grown by 30% from 2017 to 2018. Total M&A activities in the sector are estimated at 96 transactions with a total value of €2.3 billion. Private investors were responsible for 30% of the investments and a growing number of these were private equity companies. Key examples of private equity lead deals in 2018 include Nordic Capital acquiring Top Mondzorg (a chain of dentists), AAC Capital Partners acquiring Fysius (a chain of physiotherapists), and Bencis Capital partners acquiring Medsen (a chain of pharmacies).
The report highlights how the (Dutch) healthcare sector is becoming increasingly attractive for private investors due to strong growth and as a counter-cyclical balance to investments in other sectors.
Snapshot of a Dutch private healthcare operator: DermaClinics
DermaClinic was started in 2003 by Catharina Meijer, who is a cosmetic doctor, Chair of the Dutch Association of Cosmetic Healthcare, and entrepreneur. DermaClinic offers a broad range of services related to skin improvement, facial rejuvenation, and eyelid correction. All activities are paid by the clients themselves, as these services are not covered by Dutch healthcare insurance
DermaClinic currently has two locations in Groningen and Zwolle and is opening two new clinics in The Hague and Utrecht. This is the start of developing a national chain, and the goal is to have fourteen clinics by the end of 2020.