From hospitals to nursing homes, the privatised care sector is on the rise in Europe. A slow process of privatisation and liberalisation, along with the ageing of the European population and the growing demand for elderly care, have opened up a new multi-billion euro market which is increasingly dominated by a handful of increasingly larger corporate groups.

It should come as no surprise that many of these new corporate giants that own and manage private hospitals, private nursing homes, or both, are French.

First, as has been the case in other economic sectors that have undergone a similar process of liberalisation and consolidation at European level (telecom, postal services, energy, rail etc.), the winners of the European single market are usually corporations based in Europe’s largest countries (France, Germany, Spain, Italy). They have a larger “home market” that gives them the financial firepower necessary to expand, enter new countries, acquire smaller competitors. This same pattern can be observed again in the care sector.

Second, this rise of the privatised care sector is in many ways a new episode in a longer and larger history, that of the “French model of privatisation”. It is no accident that – as we shall see - some of the corporate groups now active in the privatised care sector and their executives were associated, early in their career, with the ancestors of Veolia and Suez, the champions of privatised water and waste management. It is fundamentally the same business model: cashing in on the secure revenue stream that comes from running a service that addresses a fundamental need, and that is heavily subsidised, both directly and indirectly, by public authorities. In the privatised care sector, there are even additional benefits for potential corporate profiteers, such as the low level of regulation and the possibility to squeeze labour costs even further.

Many French privatised care corporations tend to tell their own history through the narratives of visionary entrepreneurs who knew, ahead of their time, that there would be a growing need for private healthcare and elderly care, and had the skills and the business acumen necessary to turn this vision into reality. Indeed, many of these corporate groups have been created or are still controlled by men who are now millionaires. But actually, their history is also one of being able to cash in on political connections – connections with decision-makers, but mostly et more crucially with high-level civil servants and government agencies.

One institution in particular is at the centre of the public-private nexus underlying the privatised care sector: Caisse des dépôts et consignations, a venerable French public financial institution that manages billions of euros and that is a key funder of local public infrastructure and of the care sector. Caisse des dépôts and the Vivendi/Veolia group (of which Caisse des dépôts is a major shareholder), through its former subsidiary Générale de Santé, have been key facilitators for the emergence and rise of the private care groups of today, which – having become big and profitable enough - are now owned and funded by various international financial funds.

The history of privatised healthcare in France dates back to the 1980s. This is when the first private nursing homes or hospital groups were created by a few doctors and businessmen, many of whom are still active today even if they are now turning their eye to new markets (also heavily subsidised) such as e-health or home-based care [1]. Their groups have undergone a continuous series of mergers, spinoffs and restructurations that have given birth to today’s corporate empires.

In the 1990s, the French private healthcare sector was dominated by 3 companies, Alphamed, Générale de Santé (then a subsidary of Veolia), and Clininvest (then a subsidiary of Suez). All three have since been acquired, in different stages, by Ramsay Santé, while Suez and Veolia have disinvested from the sector.

Another key player in the private healthcare sector in France, Vivalto Santé, has been founded by Daniel Caille, who used to work for Générale de Santé and then for its former parent companies Générale des Eaux and Veolia. He then went on to work for La Poste and La Banque postale (closely connected to Caisse des dépôts et consignations) and Dexia Crédit local (of which Caisse des dépôts et consignations is a major shareholder). Unsurprisingly, he managed to convince Caisse des dépôts et consignations to become a key shareholder of his own group in 2015, alongside the Mubadala sovereign fund of Abu Dhabi (a frequent partner of Caisse des dépôts).

At La Banque postale, Daniel Caille was working under the supervision of Martin Vial, a top civil servant who is today the head of Agence des participations de l’Etat (the agency in charge of managing the French government’s shareholding of major companies). Alongside his civil service job, Martin Vial also owns a company specialised in elderly care, Premium Care.

Daniel Caille was trained at Ecole Polytechnique and Ecole des Ponts et Chaussées, among the handful of top high-level schools which serve as breeding grounds almost all business and political leaders in France. Interestingly, one of his competitors, the former boss and still chairman of the board of the Elsan group, Jérôme Nouzarède, was trained at the same schools a few years later. There, they were able to socialise with fellow students who are now at the top of France’s public administration.

A similar picture can be painted in the elderly care sector. Christine Jeandel, now the chair of Groupe Colisée, started her career in Caisse des dépôts et consignations, until becoming the manager of Groupe Medica, a subsidiary of Caisse des dépôts specialised in nursing homes... She lost that job when Medica merged with Korian in 2014.

The founder of DomusVi, Yves Journel, has also spent time within Générale de Santé when it was a part of Veolia. He started his elderly care home business through a 50/50 joint-venture with his former employer.

Meridiam provides yet another striking illustration of the public-private nexus at work behind the rise of privatised care. It is an investment fund created and led by Thierry Déau – yet another former employee of a Caisse des dépôts subsidiary. It has long escaped the public radar, until it emerged as the key candidate for the acquisition of parts of the Suez group in France, following the proposed acquisition of Suez by its competitor Veolia. Newcomer to the water sector, Meridiam is specialised in public-private partnerships and owns minority shares in airports, highways or power plants across the world. It also manages several hospitals, either that it built from scratch through PPPs funded by public institutions, or that it acquired from other companies, including from Acciona recently in Spain. The old connections that gave rise to today’s giant privatised care groups are still at work today.

Olivier Petitjean (Observatoire des multinationales)