Cybersecurity Awareness Training Presentation v2024.03
Presentation at Healthcare Business International Conference London April 2018
1. London, 10 April 2018
Investment Opportunities
in Dutch Healthcare Market
2. 2
Background & goal of presentation
Background
• In most European markets
commercial organizations are
providing an increasing share
of healthcare services
• Up until recently the role of
commercial healthcare
organization in the Dutch
market has been relatively
limited, as has investments
from international healthcare
companies
Meeting Objectives
• Provide a general overview of the
Dutch health care system
• Suggest reasons why the Dutch
market is an interesting opportunity
for international healthcare
companies looking for growth
opportunities
• Provide snapshots of key segments
of the healthcare sector that are
attractive for foreign investors
3. 3
The Netherlands offers an attractive healthcare market
Key facts and figures:
• Population 17.1 million
• GDP rank per capita : Nr.
13 in the world
• Healthcare spend per
population : $5400 Nr. 8 in
the world)
• Politics : Middle of the road
• Current coalition
government liberal-
centrist
• Long-term trend
towards liberalized
healthcare
• Vast majority of healthcare
provided by non-profit
organizations
Future outlook:
• No dramatic changes in
political environment
expected
• Strong growth in elderly
care and traditional
providers not well
positioned to develop more
capacity
• Growing portion of elderly
care provided by for-profit
players
• Growth in for-profit
provision in other parts of
social care market from
small base
• Consolidation and
international participation
increasing
4. 4
Dutch spending on healthcare and social care will double
between now and 2040
Historical and expected spend on healthcare and
social care
In the period 1975 to 2015 the annual
growth in total Dutch healthcare was 2.6%
(CAGR)
In resent years the growth has been lower
(even negative) due to a weak economy
and hard controls on cost developments
The Ministry of Health expects an annual
growth in spend of 2.9% in the coming
years. This is based on a average growth
of 1.7% above demographic changes
Spend on health as a percentage of GDP
will grow from 12.7% in 2015 to 16.4% in
2040
Comments
Note: Excludes spend on general social care, youth care, and kindergartens, All amounts in 2015 Euros
Source: Ministry of Health – WTV 2018 (https://www.vtv2018.nl/zorguitgaven).
5. 5
Key aspects of Dutch healthcare ecosystem
Dutch healthcare is financed through a mixture of private, employer, and state financing
• Cure-related activities (primary care, hospitals, etc.) are financed through a mandatory insurance
scheme organized through health insurance companies
• Long term and social care financed by local and central government
Healthcare is politically well positioned with broad acceptance for high quality healthcare that is
available to everybody. There are no regional differences in laws, regulation, or political positioning.
There is a long-term trend towards a more liberalized healthcare sector
Most healthcare today is provided by non-profit foundations. These sometimes have a history going
back hundreds of years. The largest are the result of a continuous stream of mergers
There is a growing commercial sector with a focus on upscale elderly care and independent clinics
providing different forms of elective surgery
There is a growing interest in the Dutch market from international healthcare companies
• Orpea has acquired a provider of long-term mental health services and a chain of nursing homes
• Turkish hospitals groups have developed hospitals in Amsterdam
• Unilabs has entered Dutch market through acquisition
6. 6
Overview of key segments
Segment Key attributes
Nursing homes • Large market with strong growth
• Attractive opportunities for international entrants
Disabled care • Large market with attractive opportunities
• Good acquisition opportunities
Hospitals • Fairly unattractive market facing increasing pressure on costs
• Opportunities for helping hospitals reduce costs and/or improve
financing
Diagnostic labs • Market very ripe for consolidation
• First international organizations (Unilabs) active
Private clinics • Market consolidation started
• Still many opportunities for acquisition
Psychiatric care • Split between large traditional incumbents offering broad portfolio and
focused commercial operators
Dentistry • Market still very splintered
• Opportunities for consolidation at national and European level
7. 7
Nursing homes
Market Size: €8.4 bln
Profitability Low for traditional / incumbent
organizations
High for commercial players
Expected growth: High (combination of extra
financing and growing elderly
population)
Market structure Traditional players are non-profit
foundations that vary in size from
large conglomerates with 20-30
locations to small local players
Commercial players mostly
focused on luxury end of market
with small-scale locations.
Divided into small “mom & pop”
single location organizations to
chains of up to 20-30 locations
Trends
• Growing elderly population
• Ongoing consolidation in commercial market and
increasing competition in luxury end of market
• Growing need for middle market solutions and
new location
• Many traditional players with weak financial
position unable to finance growth
• First acquisition by foreign player (Orpea)
Opportunities
• Acquisition of commercial elderly care
organizations (several on the market)
• Acquisition of (parts of) traditional organizations
(probably with financial / quality issues)
• Partnership or stand alone activities to develop
new locations (operational and /or real estate)
8. 8
Disabled care
Market Size: €9.7 bln
Profitability Positive, but low for traditional
organizations and higher for
small organizations.
Opportunities for improvement
Expected growth: High
Market structure Large non-profit organizations
dominate the sector.
Very visible and successful for-
profit organizations also active
(Thomashuizen with more than
100 franchises).
Trends
• Strong growth in last few years due to growth in
number of clients and more complex issues per
client
• Responsibility for “lighter” care (not 24/7)
transferred to municipalities
• Entry of foreign players started through acquisition
of WoonZorgNet by Orpea
Opportunities
• Acquisition of commercial party active in the
market
• Acquisition of (parts of) traditional (non-profit)
organization (most probably if organization is in
financial trouble)
• Greenfield start-up through transfer of proven
concept from other markets
9. 9
Hospitals
Market Size: €27 bln (2016)
Profitability Good for larger hospitals
Low for smaller hospitals
Expected growth: 2-3% last few years. Agreements
for government to limit growth to
1% per year
Market structure 126 hospitals in the Netherlands,
of which 8 are academic and the
rest general hospitals. Size of
hospitals ranges from 200 to
almost 1.400 beds.
Hospitals mostly run as
independent non-profit
foundations. Three private for-
profit hospitals (MC Groep and
Zorg van de Zaak)
Trends
• Concentration of activities in fewer hospitals
(driven by quality and costs)
• Move of planned operations to specialized private
clinics
• Pressure to reduce length of hospital stays and
moving activities to primary care
• First foreign entrants have entered market
• Targeted cost savings of € 2 billion from hospitals
in next few years
Opportunities
• Acquisitions / joint ventures with smaller regional
hospitals facing financial challenges
• Assisting hospitals to reduce costs
• Helping hospitals free up capital through real
estate financing
10. 10
Diagnostic labs
Market Size: Appr. € 1.8 bln.
Profitability Low to medium
Can be improved through
economies of scale
Expected growth: In line with overall sector
Market structure Market is very splintered with
appr. 400 organizations offering
services. Max size is turnover of
€50 million.
Many small non-profit
organizations offering services to
GPs and many hospitals with
own labs.
Limited number of private for-
profit players, some backed by
private equity
Trends
• Ongoing consolidation of market, but not very
quickly
• Increased cost pressure on hospitals likely to be
driver of further consolidation
• First international company (Unilabs) has acquired
Medlon with 450 employees and strong position in
the eastern part of the Netherlands
Opportunities
• Acquisition of existing commercial organizations
• Buy and build of labs serving one hospital
11. 11
Private clinics
Market Size: €0.8-0/9 bln
Profitability Depends on situation of
individual clinic (scale, cost
efficiency, growth phase, etc.)
Expected growth: High, but dependent on
government cost containment
actions
Market structure Currently approximately 150
organizations with around 360
individual clinics.
One dominant chain (after
merger of Bergmans and NL
Clinics). Many smaller chains
with 4-5 clinics focusing on one
specialization
Trends
• Market growth through demographics (will vary
per segment)
• Higher demands on efficiency through centrally
mandated cost reductions will be positive for cost-
effective clinics
• Entrance of foreign players
• Ongoing consolidation
Opportunities
• Greenfield establishment of clinic
• Acquisition of individual specialized clinics as part
of European chain
• Acquisition of larger chain (Bergman Clinics)
12. 12
Psychiatric care
Market Size: €6.6 bln
Profitability Low for large traditional
organizations. Good for small
and focused organizations
Expected growth: 2.4% per year
Market structure Split between (short-term) cure
and (long-term care) with
traditional organizations providing
broad range of services.
Sector dominated by a few large
organizations, but 60% of service
providers have less than €10
mln revenues
A number of commercial chains
providing basic mental care and
help with addiction problems
Trends
• Short-term pressure on growth due to move away
from in-patient treatments and restructuring of
financing forms
• Merger of traditional players to create economies
of scale
• Ongoing growth on focused commercial
organizations
Opportunities
• Acquisition of focused commercial organizations
with fit to pan-European organization
• Acquisition of (part of) traditional organization
(typically in financial problems)
13. 13
Dentistry
Market Size: €3 bln
Profitability Good, and opportunities to
improve through scale effects
(both revenues and costs)
Expected growth: Demand expected to stay stable
through mixture of demographic
effects
Market structure 5.100 dentistry locations, of
which almost 60% are solo
practitioners
Growth of multi-chair locations
with more employees per location
10% of locations are part of
(national) chains
Number of chains owned by
private equity as part of
European groups
Trends
• Move in demand to more complex care (aging
population, etc.) and cosmetic care
• Increasing number of dentists wanting to be
employed and work part-time
• Move to multi-dentist locations and further
consolidation in the market
Opportunities
• Acquisition of small/medium size chains as
starting point for national buy-and build as bolt-on
to existing international chain
• Acquisition of larger chain to develop pan-
European group
14. 14
Next steps
Do you need:
• More information on the general market situation in the Netherlands?
• More information on one of the sectors highlighted in this presentation?
• Information on another sector?
• Information on a specific company in the Dutch healthcare sector?
• Assistance in getting in contact with a specific company in the Dutch healthcare sector?
• Assistance in an ongoing acquisition process (transaction and / or implementation)?
If yes – contact Rune Aresvik:
• Rune.Aresvik@Vardetun.com
• +31-652-412 375