The for-profit Nordic care sector has faced intensified scrutiny after scandals erupted at Finnish Esperi and Attendo last year. A look at the share prices of listed companies Ambea, Attendo and Humana gives some indication of the effect of this, where newly elected governments in the last few years have created environments more or less favourable to the private sector.

The steep fall in Attendo’s share price in February 2019 marks the moment when the company was hit by the same media and political scrutiny as its troubled rival Esperi, whose CEO stepped down amid the crisis after shortfalls in staffing led to quality concerns. A new government was about to be elected and, according to an analyst at Danske bank, regulators panicked, making demands that went beyond the providers’ contracts.

As a result, costs were increased significantly and Attendo’s profits – and share price – bombed. A 67% drop in profits was recorded for the year ending December 2019 and the company’s stock dropped 37% in six months. Not only was the company struggling to integrate the costs of higher staffing levels, but the pressure made it less able to see through the usual lag between opening new facilities and increasing occupancy levels.

Almost half of Attendo’s business is in Finland, and it is taking time to recover. Though stock market investors seem to understand this and believe the worst has now passed, with predictions of slow but steady EPS and revenue growth going forward.

For Ambea, the risk is located in Norway where it acquired a business from Aleris in 2018. The business, renamed Stendi, reported losses of SEK -19m (€ -1.7m) during last year’s first quarter, due to an expensive overhaul in staffing practices. The company also won a court case against employees who were demanding long-term employment contracts (ironically, what Ambea’s expensive staffing overhaul consisted of).

Public opinion on the for-profit sector in Norway is suspicious at best, and this court win may not put it in the good graces of the country’s left-leaning municipalities – which have been given the right to refuse to tender contracts to the for-profit sector. They have also been taking facilities back from businesses – Stendi lost two contracts with sales of SEK 144m (€13m) last year.

The large majority of Ambea’s (and Humana’s) business is in Sweden. A national election in 2018 brought the far-right Sweden Democrats to the table in a coalition government which, in the words of Ambea’s CEO Fredrik Gren, is “very pro-private healthcare, very pro-quality focus and pro-freedom of choice,” producing an excellent environment for Ambea.

Indeed, the company can safely weather storms elsewhere without its share price being much affected. Shares have recently seen a slump, but prices have more or less remained within the SEK 60 – 80 range since early 2017. Unlike Attendo’s which, from a high of over SEK 102 in 2017 made a prodigious fall to SEK 40 last year.