September 2012. Overview and Lessons Learnt from Swedish Spotlight on Carema Care. Disclaimer.
Overview and Lessons Learnt from Swedish Spotlight on Carema Care
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Investment rationale, insights and angles
Ambea is a private healthcare and care provider in Sweden and Finland owned by Triton, KKR and management
The business consists of outpatient care, occupational health services, primary care and elderly care
The Group has three major subsidiaries: Carema Care, Carema Healthcare and Mehiläinen
Carema Care provides care services and nursing homes for disabled and elderly, Carema Healthcare runs primary care units, specialist healthcare services and psychiatric care operations and Mehiläinen provide privately and publicly funded healthcare services as well as publicly funded social services
Ambea employs almost 13 000 people and operates 650 units with close to 7 500 care beds across care and health care. Net revenues in 2011 were 978 MEUR
Carema Care is the largest subsidiary of Ambea
For a long time a premium provider or care services within the Swedish publicly financed care sector and currently the largest private care provider in Sweden
Triton and KKR acquire Ambea
A completely new image appears. DN’sreporting is the focus
Media storm. 45 news articles daily
Strengthened quality work | New management | Story on Koppargården | Media storm | Conversion of Shareholder Loans | New CEO | Redistribution of resources
Private Equity owned, Tax Financed, Elderly care business
pay out bonuses based on financial results
is accused for
Lacking in quality of care
A breadth of interesting players: unknown investors and owners, national politicians sensitive to the debate, local politicians responsible for tenders and ultimately for quality, and 7 500 caretakers across the country
Private alternatives in public sector still controversial
Variable salary is an issue that engage
Exposed users that are seen as powerless
The analysis show deviations in deliverables at Koppargården
Carema Care informs the municipality
Management that does not meet quality and ethical standards leaves the company
Errors are corrected and the quality work is strengthened
Carema acts on deviations
The public’s strong empathy for the residents- everyone has a grandmother or grandfather
Private Equity is perceived as short-term and profit maximizing
There were some quality deviations, but many of the reported incidents were investigated and proven untrue. Media on the other hand were uninterested in these aspects which made it a tough challenge
Media focused on a contradiction between good care and the possibility to make a profit. To explain the links between care quality and long-term return is hard when media has more exciting news to tell and no reason to help you.
The owners go out in a
joint ad declaring the
conversion of Share
Holder Loans to Equity- Nov 9
Carema Care’s President reveal the cancelationofall bonuses on live TV – Nov 10
A forceful outreach by
correct the public opinion
On weighing diapers- Dec 22
All instances where quality has lacked are unacceptable
Carema Care aim to offer the highest possible healthcare and care quality
Several powerful actions have been taken to secure quality
Since the new ownership, quality has steadily improved
The owners are prepared to do everything necessary to resolve the situation
Carema and Ambea are taking all necessary action to re-establish the public’s confidence
The owners assume full responsibility
Media scrutiny begins
Further action is taken
”It’stimetospeakfranklyabout Carema” – Mats Edman, Editor at Dagens Samhälle
Clear ambition: Carema Care will regain the position as perceived quality leader. Company now winning tenders again.
From completely unknown to the general public to active participants in the debate. Remain as long-term and dedicated owners.