Property Speculators Extract €2.5 bn Annually From the French Health and Care System
New study of private hospital giant Ramsay Santé reveals loss-making hospitals while profits are booked in other companies as rents and sales commissions
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A new study jointly published jointly by financial investigators from the Centre for International Corporate Tax Accountability and Research (CICTAR), and the trade union confederation CFDT Santé-Sociaux, reveals for the first time the cost to France’s healthcare system, and the public purse, of profits extracted by the little-known sector of healthcare property investment funds.
The study forensically examines the financial accounts of Ramsay Santé, one of the largest operators of hospitals and clinics in France, owned by the Australian healthcare multinational Ramsay Healthcare Group. It shows that:
While flagship Ramsay hospitals like l'Hôpital Privé d'Antony in Paris book persistent financial losses, they pay large rents to subsidiaries of Ramsay Santé itself, which book annual profits on these rents of between 40 and 60 percent
Ramsay Santé has also created an internal company which receives sales commissions on purchases of supplies and services by all its hospitals and clinics. While costs of supplies for these scarcely profitable hospitals and clinics have risen significantly over the last five years, Ramsay Santé is booking annual profits of between 67 and 85 percent on these sales commissions.
The report makes no accusation of unlawful behaviour: these strategies are common in the private health sector. However, while Ramsay Santé is able to use these internal profits to secure loans which have allowed it to expand internationally, workers in its hospitals and clinics are disadvantaged, since the consistent financial losses of these clinics reduce the profit-linked element of staff remuneration.
These flows of internal profits are themselves dwarfed by profits generated through Ramsay Santé’s partnerships with major healthcare property investment funds. The report finds that these ‘sale-and-leaseback’ arrangements allow specialised healthcare property investors to extract over €245 million annually from Ramsay Santé’s hospitals and clinics in the form of rents: equivalent since 2020 to around 4.2 times the net profits of the group, which is itself becoming decreasingly profitable.
At the national level, the new study provides the first published estimate for the cost for the French healthcare system of this extraction of real-estate profits, based on property investment funds’ own accounts.
Privately operated hospitals, clinics and residential care homes in France may have paid around 2.5 billion Euros in 2023 to private property investors: equivalent to the annual salaries of over 82,000 nurses
This figure is an underestimate, since many publicly operated hospitals, clinics and care homes also pay rents to third-party investors
“Our research shows that billions of euros are flowing each year out of the health and social care system to specialised healthcare real-estate investors, with the help of companies like Ramsay Santé. These investment funds generally do not pay for the maintenance or other costs of the buildings. Their profits are funded mostly by public money, and benefit from special tax breaks in France and other European countries. The scale of their profits is staggering: we have found that investors in just four large healthcare property investment funds receive between 41 and 129 percent of the funds’ rental income as dividends – profit levels that make Apple or Google’s profits look relatively modest.”
“When the state gives a euro to the private for-profit healthcare sector, it’s impossible to know where it goes!”
CICTAR sent a detailed list of allegations included in this report to Ramsay Santé, Praemia and Confinimmo. Their full reponses are proided below. We also contacted BNPP REIM (Paribas), who did not reply. The published report includes their comments, where relevant.