Update 11 July 2017

Welcome to the newest update on private healthcare in The Netherlands. It is clearly summertime, so not so much news this time:

• The Dutch government has announced extra financing for elderly care. Will this make the Dutch elderly care market even more attractive for the large international groups?
• In our snapshot, we give an overview of U-Center, a private psychiatric treatment center that will be up for sale soon. Will the buyer be an international group looking for a foothold in the Dutch market for psychiatric care?

Extra money to be made available for elderly care in 2018

The Dutch government has recently announced that from 2018 an extra €435 million will be made available for the elderly care sector. This amount will enable the sector to hire an additional 7.000 FTEs whom can be used to follow-up on new quality requirements intended to make elderly-care organizations provide more personal care.

It is not clear yet how the extra money will be distributed. This will be clarified in the budget presentation on 19 September. The extra money represents an average of €5.500 per year for each of the 80.000 patients currently in nursing homes or approximately €15, - per day per patient. For international groups used to much tighter budgets this can represent an additional reason for entering the Dutch market.

Snapshot of Dutch private sector healthcare operator: U-Center

U-Center is private special hospital and behavioral health residential treatment center in the Netherland. Half of treatments focus on depression with the remaining treatments divided between addiction treatment and anxiety-related issues.

U-Center was established in 2008 by two local entrepreneurs who combined “best practice” from clinics in Germany and England that has been used in dealing with addiction issues in their families. U-Center was very successful and had a period of strong growth until 2011 when it was acquired by Waterland Private Equity. Due to changes in the financing of mental health by Dutch insurance companies the organization became loss-making and in 2015 was taken over 100% by ABN Amro.

85% of U-Center’s patients are currently Dutch, and U-Center has contracts with most of the insurance companies. In addition to payments by insurance covering treatment, patients pay €150, - or more per day for hospitality and extra comfort services. Treatments for foreign patients are usually paid by employers. Treatment usually consists of a combination of residential treatment followed up by ambulant treatments at the patient home.

The U-Center location in the southern part of The Netherlands has 55 rooms. The total organization has approximately 120 employees. U-Center wants to grow, and has plans for opening a location that will focus on the international market.

The U-Center investment is controlled by ABN Amro’s department for bad loans and companies in financial difficulties and is definitely not for the long term. ABN Amro has made a choice to get U-Center back on its feet, as it expects that this will maximize the value that it will get. When will U-Center be put on the market?