The Finnish social and health care sector has changed dramatically over the past couple of years as a result of corporate acquisitions.
Kauppalehti and Uusi Suomi on Monday reported that the sector witnessed 298 buyouts – an average of one every four days – between January 2015 and November 2018, with a total of 35,400 employees and 2.45 billion euros in revenue changing hands in the transactions.
“There has been an up-tick in corporate acquisitions in recent years,” admits Annika Saarikko (Centre), the Minister of Family Affairs and Social Services.
The acquisitions began to increase in terms of absolute numbers, revenue and employees after the government announced it is exploring the possibility of increasing patients’ freedom to choose their social and health care provider in the first half of 2015.
Mehiläinen, Terveystalo, Attendo, Pihlajalinna and Esperi Care – the five largest companies in the sector in Finland – have since accounted for roughly a half of the acquisitions and doubled their combined net sales to approximately 2.6 billion euros, according to Kauppalehti and Uusi Suomi.
Saarikko on Monday said the activity has been monitored also at the Ministry of Social Affairs and Health.
She also underlined that the sector consists of roughly 18,500 companies and that the up-tick in acquisitions should not be attributed exclusively to the social, health care and regional government reform pursued by the government of Prime Minister Juha Sipilä (Centre).
“The growth in the number of transactions can be explained with a variety of different factors. We’ve had a lot of small business owners who are looking for someone to take over their business and other similar changes that are typical of business life and that have nothing to do with topical developments in the social and health care sector,” she argued.
Antti Rinne, the chairperson of the Social Democratic Party, disagrees with her, interpreting the up-tick in acquisitions as a sign of centralisation of the private health care industry.
“I think these numbers show that big operators see a major business opportunity in the government’s social and health care proposal. That’s why they’ve been buying out their smaller counterparts,” he said.
The position of small and medium enterprises in the sector is a concern for both Rinne and Saarikko.
Rinne pointed out that solidifying the market position of small companies has been cited as one of the main grounds for increasing patients’ freedom to choose their service provider.
“This development seems to be taking us in the opposite direction. Some of the small ones have for sure voluntarily concluded that they won’t be able to compete under the new system,” he estimated.
Saarikko said she is prepared to mull over measures to encourage small service providers to invest in, rather than offload or discontinue, their operations. Such measures, she added, could include public subsidies for investments in the information systems necessitated by the reform.
“I’m not sure if it should mean subventions, but that’s one way to interpret it,” she told.
“My idea is more about making sure that access to the information systems doesn’t become an obstacle and that there are channels that make the initial investments easy enough for companies,” added Saarikko.
Aleksi Teivainen – HT
Source: Uusi Suomi