The healthcare sector in general and Verpleging Verzorging en Thuiszorg (VVT, representing 55% of all healthcare companies) in particular, face enormous financial challenges. The sector organization (Actiz) as well as the banks (NVB) are very concerned and recommend management to focus on operational performance, cash management and a sound financing strategy which should lead to improved business planning. Strong and visionary management is crucial in this process.

Based on its experience in the healthcare sector in combination with strong skills in the areas of Financial Due Diligence, HR assessment, Operational Excellence as well as Debt Advisory, BCM is ideally suited to assist in this challenging environment.


According to EY 1 out of 5 healthcare institutions in the Netherlands was loss making in 2015. This follows from the 2016 Barometer Nederlandse Gezondheidszorg, an analysis by EY of 1.015 annual reports of companies active in the healthcare sector.

Out of the 10 subsegments in the sector, 3 realized a net average profitability of less than 1%: independent treatment centers, youth care and VVT (elderly care). This low profitability means that innovation and capital expenditures budgets are very limited and that primary focus should be on financial management. 

In total, Dutch healthcare institutions realized an average profitability of 1.7% in 2015 which EY believes to drop to 1.5% in 2016. This is the third consecutive year that profitability drops in the healthcare sector. The low profitability in VVT is caused by the recent decentralization and the reduction in elderly care budgets.


Actiz, the VVT sector organization representing 400 companies, states in its publication "Financiele postitie zorgorganisaties VVT" that the current average net profit margin in the VVT sector does not allow for a structurally sound business operation. The net margin is under pressure and reached 1.5% in 2014.

18.6% of the VVT organizations realized a net loss in 2014 and according to Actiz only 7% of the companies will reach the net margin target of 2.5% in 2018 which is seen as the bare minimum to be able to operate on a structurally sound basis.

Actiz concludes by stating that VVT healthcare organizations should invest in cash-management as well as in their financing strategies in order to cope with the growing financial uncertainty.


According to the Dutch Banking Association (NVB 19-4-2017, Financiering van Zorginstellingen) the recent transition from budget based to performance based compensation in the healthcare sector has considerably increased the risk profile of individual healthcare companies.

As a result, banks set higher standards to operational performance, company’s management as well as the business plans of healthcare companies. Additionally, lenders will put more focus on the financial headroom when considering new financing arrangements. Each credit application will have to be supported by a thoroughly built, robust, business case.  Banks will scrutinize the business case provided in detail.

To keep a high quality, accessible and financeable healthcare sector a fundamental restructuring of the current system is required. This requires strong and visionary management. This is a fundamental element of any credit analysis by the lenders.

Finally, the NVB recommends to amend the legal framework in order to stimulate utilization of venture capital (equity and/or mezzanine) in the healthcare sector in order to create alternative sources of financing and help fund innovations in the industry.


An overall conclusion is that the financial condition of a large part of the companies active in the  healthcare sector is weak, that the sector faces challenges following recent regulatory changes and budget cuts and that access to the banking market for funding is restricted.  

Bold Capital Management can assist:

Financial institutions, by assessing the quality of their healthcare loan portfolio and proposing restructuring solutions for individual healthcare cases.

Healthcare companies, by making the organization fit for the new environment with all its (financial) challenges. This includes help in improving operational performance, cash management and financing strategies. This should lead to the preparation of a realistic, robust and thorough business plan which is used as basis for the discussions with all key stakeholders.

Didier Simons