On the Financialisation of Elderly Care in Europe

The following article is based on the initial findings of the study on the financialisation of elderly care in six EU countries (Croatia, France, Germany, Portugal, Spain, and Sweden), commissioned by transform! europe. It is being conducted under the direction of Theo Bourgeon, University of Edinburgh, and will be published in the coming weeks.


In the countries of the European Union, the proportion of older people is growing, while the birth rate is falling. By 2050, the proportion of people over 65 will increase from 20% today to 30% in 2050, and with it, the number of people in need of care will rise from around 30 million in 2019 to 38 million in 2050, coupled with an increasing need for care services and care facilities.

However, long-term care quality is already far from fulfilling the right to live in dignity and independence and to participate in social and cultural life, as stipulated in the Charter of Fundamental Rights of the European Union. This also applies to Principle 18 of the European Pillar of Social Rights: the right to access affordable and quality long-term care, home care, and community-based services.

The central importance of long-term care was recognised by the European Commission, which adopted a European long-term care strategy in September 2022. This document sets out a strategic vision for long-term care in the EU, but only emphasises the need for high quality, affordable, and accessible long-term care. The EU Commission also refers to the report of the Conference on the Future of Europe (proposal 15, paragraph 8), but fails to develop concrete guidelines and does not address the increasing financialisation of the care sector in the EU as a fundamental problem for the implementation of these goals. The consequences of the financialisation of care for the elderly are already evident today.

Where care services are offered publicly today, they are not sufficient, especially in rural regions, and are often associated with inferior quality of care. Where care is provided by private family businesses – also in view of the lack of alternatives – there is too often a lack of monitoring of legally defined care standards. Time and again, unacceptable care conditions and inadequate staffing levels lead to scandalous headlines about the conditions in care homes such as those in Croatia and Portugal.

The situation is even worse with regards to for-profit long-term care providers being (stock exchange) listed or private equity (PE) investors, for whom care is merely a “by-product” for successful profit maximisation through publicly subsidised care services. In addition, buying and selling as quickly as possible is intended to further increase profit margins without the state currently intervening. This happens due to the lack of regulations and policies aiming at limiting financialisation in the care sector and developing real strategies for sustainable financing of care in line with the overall sustainability of public finances and a clear regulatory environment that takes into account the social value of care and nursing services and enables access to affordable and high-quality long-term care.

The consequences of long-term care financialisation will be analysed below using the example of six EU countries: Croatia, France, Germany, Portugal, Spain and Sweden.

Scope and impact of financialised elder care

The process of financialisation of care services began in the mid-1990s and accelerated in the EU countries at the beginning of the 2000s. The introduction of state long-term care insurance, as in Germany in 1995, became the starting point for an almost uncontrolled financialisation of the care sector. Determining concrete data on for-profit private care services – which mirrors the financialisation of the care sector – is proving to be a problem in view of the convoluted, and in some cases anonymous, ownership structures for disclosing the financial flows and the transformation of state or public subsidies into profit margins at the expense of care. At the same time, publicly owned care facilities, such as those in Portugal and Croatia, are increasingly facing financial problems due to rising energy and living costs, additional costs for care facilities and their administration, and are also progressively becoming profit-oriented.

Nevertheless, and although there is a general lack of official accessible and transparent data, important figures point to the growing dimension of the financialisation of the care sector. In France, for example, a country with a very highly financialised care sector and home of the three largest European care groups (Orpéa, Korian, and DomusVi), the proportion of for-profit care beds is currently 20%. All three companies can also be found in Spain, Germany, and other EU countries (Schumann/Schmidt 2021). Almost 90% of private profit-oriented social care providers in Sweden are large companies, including Ambeo and Attendo – the sixth-largest care provider in Europe. In Portugal, for-profit care facilities account for around 30%. In Croatia, the proportion of public care is less than 10%, the proportion of private care is 20%, and the proportion of family homes is around 70%, some of which, like the private care homes, are largely profit-oriented. In some countries, such as Spain, it is also necessary to differentiate between public homes that are managed publicly and those that are managed privately. 26% of care homes are publicly owned. However, the proportion of publicly financed beds is 62%. This means that in Spain the state is directly subsidising private companies’ investments in the care sector and we can see this trend happening in several other EU countries (Sweden, France, and Germany, for instance). Inadequate regulation of the care sector, and even more so of financial flows, is making care for the elderly one of the most attractive investment targets for European financial capital, leading to market concentration and the monopolisation of the care sector.

In Spain, monopolisation means that four groups of companies control a quarter of the entire care sector. Three of them (DomusVi, Vitalia home, and Ballesol) are owned by private equity financial institutions and the fourth, the French company Orpéa, operates on the stock exchange. In France, six large companies operate in the care sector: Korian, Orpéa, DomusVi, Le Noble Ange, Colisée, and Domidep. The first four mentioned are Europe’s largest care groups. In addition to Orpéa, Korian and Le Noble Age are also listed on the stock exchange. In Germany, the largest for-profit oriented care provider is Alloheim, owned by the private equity Swedish investor Nordic Capital; Korian is the second-largest care group in Germany. In Sweden, for-profit care is now concentrated in five “care conglomerates”, with Ambea and Attendo alone accounting for almost 60% of the share. In particular, the Europe-wide tendering process in accordance with the EU Competition Directive 2004/18/EC from 2004 led to the squeezing out of local providers and at the same time promoted the outsourcing of care provision and administration or separation of care provision and care facilities.

As a result, private equity investor groups and stock exchange-listed corporations dominate the privatised care market, with consequences for the entire care sector, including the public sector.

How do financial care service providers work and operate

Private equity investor groups and listed corporations are primarily concerned with maximising profit – and the care sector is no exception. Being tax avoidance one of profit-seeking institutions’ favourite financial tools, the final ownership structure of private equity groups’ operating in the care sector ultimately lies outside the countries in which they are actually active – for example, the headquarters of Nordic Capital and DomusVi are in tax havens, Luxembourg and Jersey, respectively.

Private equity companies are primarily concerned in concentrating and reorganising businesses in such a way that they can be sold to a new buyer at considerable profit. In the elder care sector, it is all about making profits by buying, acquiring, and merging care facilities and ultimately selling them again at higher prices. These companies often separate care provision and real estate, on the basis of loans and passing on the loan charges – the interest – to the care facilities and their users. The interest payments of Alloheim in Germany (Cidron Holding – Nordic Capital), for example, amount to 10% of the care homes group’s income. The total debt in 2021 amounted to EUR 1.4 billion, of which EUR 874 million was owed to external creditors.

Maximising profits further requires “transforming” the care facilities by lowering construction and care provision standards, reducing staffing ratios, and lowering the wages of the nursing staff (often through recruitment of less qualified workers).

To prevent this from becoming apparent, a holding company is formally set up for individual care companies, which then conclude the contracts with state clients and thus place the underlying investment business on a secure footing. The profits of the holding companies are passed on to the actual owners via profit transfer agreements, who are ultimately not based in the country where the profits are generated. For example, the German Alloheim Group, the second-largest for-profit care provider in Germany with over 25,000 beds, is formally owned by a holding company in Düsseldorf, which is, however, linked to Cidron Atrium by profit transfer agreements, which in turn is linked to Nordic Capital.

Family businesses

Family homes and small (often illegally run) businesses are of particular importance in Croatia and Portugal, respectively, and can be seen easy targets for monopolisation by financial investors given that these are also under financial and capacity pressure due to the scarcity of public state supply in in countries with the highest levels of ageing populations. In Croatia, people with lower incomes, in particular, have no choice, especially as family care is hardly an option due to the migration of younger generations. The migration of Croatian care workers to other EU countries is one of the reasons why there are only nine per 100,000 employees in the care sector in Croatia, so that family care homes are becoming an “informal” solution to address unsolved state or public duties. At the same time, inadequate capacities and deficiencies in the care provided in family care homes are repeatedly identified, without this leading to any consequences. 108 family homes (out of approx. 400) were to be closed in 2022, but 74 continue to operate (Vrsaljko 2022). In Portugal, the same problems of lack of quality of the provided care leading to institutional abuse have also been denounced in small private elderly care homes responsible for almost half of elder care homes in the largest cities. The private elderly care sector is becoming a rapidly growing market with big financial groups like DomusVi and Orpéa already operating in the country. In this regard, it must be mentioned that although the Portuguese state cannot directly finance private care providers, law changes during the troika years contemplated an increase in the maximum beds permitted per care home making elderly care homes much more attractive to big financial investors.

What are the consequences?

The care system includes care workers, care services, and care-related accommodation – the care real estate. In the process of financialisation of the care sector, service provision, staff, and real estate are separated it has in order to maximise profit increases. In those countries where the legal basis allows, the greatest room for manoeuvre are cuts in wages or benefits (or both) or investments in the property are foregone.

The consequences of lowering of minimum standards in for-profit care) was demonstrated by the pandemic in almost all EU countries, especially in the care homes of for-profit corporations. The outbreaks may have been less frequent, but larger, longer-lasting, and there were more deaths in comparable other homes. In Spain, autonomous regions with a higher proportion of private nursing homes had a higher mortality rate (Barrera-Algarin et al., 2021).

The effects on care workers are also hard to conceal. In order to reduce costs and maximise profits shortage of care workers, overworked staff and the resort to temporary workers with lower pay and qualifications. According to the German media magazine Frontal21, the work overload has led to problems with hygiene, the quality of care and favours abuse. In public care homes – as can be proven for Sweden, for example – the number of temporary and marginal workers is significantly lower than in for-profit homes. Broms et al (2024) found for Sweden that staffing levels are lowest in private equity and publicly listed care homes and highest in non-profit or public homes. The same applies to formal training.

Where to start?

First, it is necessary to bring the financialisation of the care sector into the public debate and, to this end, the facts of financialisation: who makes profits and at what is the price for the people in need of care and their relatives. Care is a public good and must be defended, because it is about how society treats its weakest members, it is about humanity. Care as a basic building block for a dignified life in old age must be held under public control. This includes the adoption of guidelines and minimum care standards and also their effective monitoring.

In view of the impact of transnational corporations on the quality of the care sector, it would be necessary to adopt stricter finance rules, such as those proposed by the EU Commission to the European Council for long-term care (EU Commission 2022), and above all to implement them in all EU countries. This also includes European minimum standards for working conditions in the care sector beyond the general formulations of the European Care Strategy on the ratio of staff to people in need of care, wages, maximum working hours, mandatory rest periods, and better and continuous training.

However, it is not enough to focus solely on the care sector. Financial institutions and financial flows must be monitored. When awarding public care services to transnational European financial service providers or listed companies, a European “Schufa” must take into account their debt burden. On the basis of binding EU directives, it must be ruled out that private equity companies are allowed to pass on their debts to the companies they take over. In addition, real steps must be taken to develop sustainable financing for the growing need for care in the EU at the European level.

Health is not a commodity! And neither is care. It is, therefore, imperative to free care from the clutches and constraints of financialisation.


  • Barrera-Algarín, E. et al. (2021) ‘Covid-19 y personas mayores en residencias: Impacto según el tipo de residencia’, Revista Española de Geriatría y Gerontología, 56(4), pp. 208–217. doi:10.1016/j.regg.2021.02.003.
  • European Parliament (2000): -Charter of Fundamental Rights of the European Union, Article 25) https://www.europarl.europa.eu/charter/pdf/text_de.pdf
  • European Commission (2022) A European Care Strategy for caregivers and care receivers. file:///C:/Users/Asus/Downloads/A_European_Care_Strategy_for_caregivers_and_care_receivers_.pdf
  • Schumann, Harald/Schmidt Niko (2021): Das Milliardengeschäft Altenpflege: Care homes as profit machines for corporations and investors. 16.7.2021. The billion-dollar business of care for the elderly: Homes as profit machines for corporations and investors (tagesspiegel.de)
  • Vrsaljko, M. (2022). Ilegalni obiteljski domovi u Zadru posluju unatoč zabrani, država im ništa ne može. Faktograf.hr. Online: https://faktograf.hr/2022/05/04/ilegalni-obiteljski-domovi-u-zadru-posluju-unatoc-zabrani-drzava-im-nista-ne-moze/

Cover-Photo: David Gyung via istockphoto.