At over €5bn a year, adult care is a huge market for the for-profit sector in the UK/Ireland and much of the Nordic region. But is it possible to build Pan-European businesses in the sector? It is the latest sector covered by HBI Intelligence which now provides sector/country coverage across 20 sectors with 330 national entries.
The short answer to the question is “no!” A nascent sector exists in the Netherlands, Belgium (but only in Wallonia) and to an even more limited extent in Germany. Elsewhere we found almost a complete ban on for-profit providers. It is an extremely difficult sector to research as definitions and payor regimes vary hugely and the sector covers patients with a wide range of symptoms.
That reflects the huge dominance that not-for-profit players have in many countries. It also reflects how little long-term adult care has changed in many countries. A report on the transition from institutional care to community-based services in 27 member states found that there were still at least 1.44m people still in institutions defined loosely as anywhere with more than 30 residents. That number has not changed substantially in a decade and is an underestimate as it excludes elderly people with disabilities living in care homes.
In the UK and Nordic regions the shift to deinstitutionalise care led to a massive uptick for the for-profit sector which was able to provide small-scale flexible accommodation with cares to get people back into the community.
So will we see a similar change elsewhere? We suspect the answer is no. Even when changes are introduced offering more choice as in Germany it is not clear they will advantage the for-profit sector.
Meanwhile it is noticeable that growth remains strong for the for-profit sector in those countries where is does exist. And the sector is viable with EBITDA margins for the majority of adult care providers in EMEA range from 10% to 18%.
We will continue to watch and research the sector closely.We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.