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Germany Nursing Care Services Market 2011

Industry Sector

Healthcare and Medical

Published

20 February 2012

Author

Mike King

Type of News

Market

The Germany nursing care services market is expected to grow: Experts anticipate an increase to EUR 37 billion by 2020 and to EUR 72 billion by 2050. In comparison, the market value in 2005 stood at EUR 26.7 billion. The volume of people requiring professional nursing care will double or even triple in Germany by 2050 due to substantive demographic shifts. By the year 2030, most if not all of the "Baby Boomers" will have retired and will therefore potentially need nursing services. Medical advancements will utilimately lengthen lifespan although the conditions related to old age such as dementia or heart problems remain on the rise.


In 2005, the percentage of people requiring care under the age of 60 was less than 1% in Germany while the percentage of people needing care older 80 and in need of care totalled 31% and over 90 at 60%. These statistics highlight the need in Germany for proper insurance solutions, since most people are unable to finance professional care taking on their own.


To provide adequate financial cover for when people get older, the long-term care insurance has become mandatory and financed by both the employee and employer. Unfortunately, due to the quickly rising numbers of people in need of caretaking the insurance funds face serious finance issues and an unpredictable risk to professional nursing care.


Germany's care sector is expected to grow annually by 3% and it is expected that the way care is provided will change. Between 2006 and 2010, the number of people in need of stationary care increased by 15% with this trend expected to remain over the next five years with an increasing demand for nursing homes, most of which are already successful commercial operations.
Surprisingly, trade fairs play an important part in marketing care solutions in Germany and new companies wishing to penetrate Germany's nursing care market often attend these shows. Exhibiting at these trade fairs can bring direct sales and more significantly, can represent one of the least expensive ways to test the market receptivity.


In 2010, there were 12,000 nursing services authorised and in operation in Germany. Of these 12,000 services, a total of 7,200 were privately operated, 4,470 were operated by non-profit organisations such as DIAKONIE or CARITAS and 330 were operated by local authorities. In total, 236,000 people were employed in nursing services in Germany during 2010, the majority of these employees being part-time (71% part-time workers). In addition, the majority in this profession are women, accounting for 88% of the total workforce. During the period 2008 to 2010, the number of employees working in the nursing services sector in Germany increased by 10% adding a further 22,000 nurses to the workforce within two years.

 

There are several medium-sized and small-sized nursing services and networks in Germany providing nursing care. One of these is Pflegeverbund Deutschland, a network of private nursing services specialized in 24/7 care. Humanis GmbH, a medium-sized care organization, generated a turnover of EUR 3 million in 2010. Congrego Seniorenbetreuung GmbH and the U.S. subsidiary, Home Instead GmbH & Co.KG, two small nursing service companies, both started franchises for their nursing services, with roll-out still in the pilot project phase. Most of the small nursing care services operate regionally only. In addition, temporary employment agencies such as Auxila-Pflegepartner based in Asslar out of Stuttgart offer qualified nursing and medical personnel on an ad-hoc and temporary basis.


About 10,300 certified nursing homes exist in Germany in 2010 with most of these homes, 55%, operated by non-profit organisations such as DIAKONIE or CARITAS. Only 39% of the nursing homes are operated privately and only 6% of nursing homes are operated by publicly run organisations. In total 576,000 employees worked in nursing homes in 2010 with 57% of these employees working part-time.


Germany's largest privately owned nursing home operators are Kursana Residenzen, a limited liability corporation owned by the Dussmann group; Curanum and Pro Seniore, both public stock corporations. Kursana Residenzen GmbH owns 95 facilities in Germany were more than 12,600 residents are served. In 2010, Kursana generated sales totalling EUR279 million. Kursana also has operations in Austria, Switzerland, Estonia and Italy. In addition, Kursana entered the United States market by taking over 8 nursing homes from Sunrise Senior Living in September 2010. Sunrise Senior Living is a US based company offering nursing home services in the US, Canada and UK. Curanum owns a total of 7800 nursing homes and 1600 apartments for assisted living. In 2010, Curanum reported sales of EUR257 million. Almost 35% of Curanum's shares are owned by a German Bank, Norddeutsche Landesbank and NAVITAS, a Dutch investment company. The other 65 of shares are owned by minority shareholder investors.


The big three nursing home operators were all generating sizeable revenues in 2010 although the annual ROI stood at only 2.5% of the turnover 2010. The only way to really generate profits in this sector in Germany is to provide nursing care for well off retirees including sophisticated apartments and added value with additional services. Despite the relatively low roi, the Germany market is seen as promising to foreign investors.

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