Across Europe, healthcare systems are struggling under the weight of austerity and privatization. In France, a new report by the Center for International Corporate Tax Accountability and Research (CICTAR) and the trade union CFDT Santé Sociaux reveals yet another disturbing facet of this trend: millions of euros in public funds are being systematically funneled to private landlords through controversial sale-and-leaseback arrangements.
Under these agreements, healthcare institutions sell their real estate to investors and then immediately lease it back, mostly at high rent costs. Since the 2010s, both public and private healthcare institutions, including long-term care facilities, have been involved in such practices. For public institutions, the move to sale-and-leaseback can be interpreted as a response to cost-efficiency pressures. Private healthcare providers, on the other hand, used these sales to fuel even more expansion and acquisitions, according to CICTAR.
Fifteen years on, there are blazing consequences: just one private health provider, Ramsay Santé, spends €245 million (USD 255 million) a year on rent to funds like Praemia Healthcare. Broadening the view, the report estimates that private health facilities in France paid approximately €2.5 billion (USD 2.6 billion) to property investors in 2023 alone—an amount that would have been enough to fund 82,000 nursing jobs in a country grappling with staff shortages and disparities in access to care.
Read more: Wage disparities for healthcare assistants deepen Europe’s workforce crisis
This business becomes even more problematic when considering that private hospitals in France rely heavily on payments from the national social security system. In effect, it is not the private providers’ own funds but public money—collected to ensure care for those who need it—that is being spent on rent payments. This financial arrangement offers yet more proof that, contrary to claims made by European health ministries advocating for the privatization of health services, private healthcare systems prioritize profit—whether for themselves or their allies in real estate—over patient care.
Read more: Investors in long-term care profit as aged and disabled residents and workers bear brunt of COVID-19
Operators like Ramsay Santé may face financial strain from their sale-and-leaseback arrangements, as rent costs eat into individual hospitals’ or centers’ budgets. However, the asset buyers—mostly investment funds—do not. “These investor-landlords bear almost no risk, are not responsible for the upkeep or improvement of the buildings, and consequently generate enormous profits,” the report states. Adding to the issue, regulations in many European Union countries allow these profits to benefit from low tax rates, making healthcare real estate a highly attractive sector for investors.
Recent examples of the collapse or near-collapse of private health and care groups in Europe and North America show that such a system is doomed, with the consequences falling most heavily on patients and residents of long-term care facilities. To prevent this scenario, the report recommends measures for government action, such as increasing transparency in business plans and financial reporting. However, without a broader shift toward the bolder of these suggestions, like the reclaiming hospitals and care homes by the public sector, these steps are unlikely to achieve the desired effect—leaving real estate investors effectively in control of care provision.
People’s Health Dispatch is a fortnightly bulletin published by the People’s Health Movement and Peoples Dispatch. For more articles and subscriptions to People’s Health Dispatch, click here.
