Nov02

Update 2 November 2021

Update 2 November 2021

Autumn has definitely come to the Netherlands with a mixture of gray and rainy days and days where we can enjoy the incredible fall colors. Not my favorite time of the year, but it has its charms. In this update on the Dutch healthcare sector, we cover:

  • Insurance companies do not want to transfer catch-up activities to commercial clinics. What will be the effect on waiting times for non-critical operations?
  • Another acquisition by Bergman Clinics. Are they moving into Equipe’s key market segment?
  • Three rehab clinics to work closer together. First step to a merger?

Insurance companies claw back suggestions to move catch-up activities to commercial clinics

In the previous update we explained how the Dutch Healthcare Authorities (NZA) and spokespeople from individual healthcare insurance companies were positive to having commercial clinics play a key role in carrying out catch-up activities related to delays in treatments due to Covid-19.

These statements appear to have caused considerable discussion between insurance companies. In a recent statement the umbrella organization for the ten largest healthcare insurance companies (Zorgverzekeraars Nederland – ZN) vigorously pushes back on this idea. ZN wants as much as possible of the catch-up activities to be conducted by the regional hospitals. The main argument for this is that the insurance companies have already paid for these activities through the support mechanisms put in place in 2020 and 2021 to help hospitals deal with the financial effects of Covid-19. Allowing specialized clinics to conduct a substantial part of the catching-up activities would mean that the insurance companies “pay twice”. A second argument is that the current contracting system is meant to support the overall infrastructure of the regional hospitals.

The specialized clinics and the patient federation are disappointed in the reaction of ZN and the NZA still believes that the clinics should play a role in reducing Covid-19 related waiting lists. In the end the patient will decide where he/she wants to be treated but without expanded revenue ceilings the specialty clinics will need to turn away many patients. We will keep you updated.

 

Another acquisition by Bergman Clinics

There has been a lot of news regarding Bergman Clinics in the last eighteen months. In addition to the process related to the acquisition by Triton  there has also been an ongoing deal-flow of new acquisitions by Bergman. Last week it was announced that Bergman wants to acquire The Hand Clinic. The Hand Clinic has one location in Amsterdam and had revenues of €4 million in 2020.

It is interesting to note that this acquisition is an expansion of Bergman Clinics into the orthopedic sector  that is currently the main focus of Equipe (recently acquired by Nordic Capital). Does this mean more direct competition between the two largest Dutch specialty clinic chains?

Three rehab clinics to work closely together

As reported in the update of 31 October 2019 the Dutch rehab sector faces a range of challenges and is structurally loss-making. Three of the leading companies in the sector are Revalidatie Friesland (2020 revenues €31 million), Basalt (2020 revenues €90 million) and Klimmendaal (2020 revenues €52 million). The three companies have recently announced a far-reaching cooperation under the name Revion. The main goal of the announced cooperation is to reduce costs. Currently the overhead costs of the three organizations are 24% of revenues while overhead of comparable companies such as hospitals are 17% of revenues. The plan is to reduce these costs by sharing the development expenses of innovative technologies and treatments.

The companies claim that the cooperation is not a first step towards a merger. It will be interesting to see whether the suggested cost reduction goals are met through a more informal cooperation. The Dutch hospital sector has highlighted the pitfalls of mergers, but why announce a name for what sounds like a technical cooperation?