Finnish elderly care has been making headlines for the wrong reasons recently. Investors were left unimpressed by Attendo’s Q2 results last Friday (July 19) which showed it making a loss. Its share price has almost halved since January. But it is not just Attendo feeling the heat – these are troubling times for other large operators in the Finnish elderly care market. The CEO of Esperi Care, Finland’s second wealthiest woman Marja Aarnio-Isohanni, resigned earlier this year after the country’s healthcare watchdog temporarily shut down one of its facilities. Why are providers struggling in a market in desperate need of capacity?
A toxic mix of staff shortages and underfunding is weakening operations (and results). Attendo admits having problems recruiting both management staff and carers, which led to a worrying loss in occupancy (which dropped to below 40%) at own-managed facilities. The issue has snowballed over the last six months and is now plastered across the group’s results, with reported losses of SEK 39m (€3.6m) and negative diluted earnings per share at -0.24.
Esperi’s problems became a national and well-publicised scandal which forced Aarnio-Isohanni to resign earlier this year. She admitted to not paying enough attention to human resources while pushing growth and profitability – a mistake when the backbone of any care business is its carers. Investigations disclosed that poor quality of care unsurprisingly boiled down to a lack of staff.
In response, the Finnish government has announced plans to increase the statutory carer to resident ratio from 0.5 to 0.7 – but has yet to clarify when and how much funding will follow. In the meantime, operators have to flesh out plans to source more carers – Attendo, like other players across Europe, will be looking for nurses in the Philippines.
Sources tell us that Finland spends significantly less than other Nordic countries on caring for older people. Unless this changes, Finnish elderly care may have a rocky road ahead and continue to make headlines for the wrong reasons.We would welcome your thoughts on this story. Email your views to Anaïs Charles or call 0207 183 3779.