The nursing home market - France

The European retirement home market, and France in particular, faces major challenges in meeting the growing demand arising from an ageing population. By 2020, the proportion of Europeans aged over 65 will represent over a fifth of the population, and this demographic group is expected to continue to grow. In particular, the UK and Germany will lead investment in retirement homes in 2020, with €13.35 billion and €10.86 billion respectively.

The French market is experiencing supply constraints, illustrated by a high occupancy rate in EHPAD (nursing homes) of 97%. In response, major players such as Korian, Orpea and DomusVi are diversifying their services, notably by expanding into homecare. Geographical disparities in the availability of EHPAD beds also persist between French regions, with southern regions favored. The private sector operates a significant proportion of EHPAD (24% for the private commercial sector and 31% for the private not-for-profit sector in 2021), with a globally fragmented market structure comprising international, national and local operators. Regulations, notably the law of January 24, 1997, impose strict quality and safety standards and define the tripartite agreement process for the construction of facilities.

Overall, the market is characterized by significant growth potential, given the increase in demand due to demographic trends, but it faces obstacles linked to the expansion of supply and the complexity of regulations.

Demographic trends and rising demand in the French retirement home market

The French retirement home market illustrates a dramatic shift in the age structure of the population, with the number of elderly citizens rising steadily. Faced with this demographic shift, demand for retirement homes, particularly those specializing in medicalized care, has risen sharply. Between 2015 and 2030, the proportion of the elderly population (over 65) to the working-age population (15-64) is set to rise from around 29% to around 39%, and could even reach a staggering 50% by 2050. This acceleration in demographic ageing is all the more significant given that France is forecasting an increase in the number of dependent elderly people; projected trends suggest that between 3 and 5 million elderly people could experience a loss of autonomy by 2050.

In response to these projections, the retirement home market is evolving rapidly. Medicalized establishments, in particular EHPAD (Établissements d'Hébergement pour Personnes Âgées Dépendantes), have established themselves as the predominant form of care facility for the elderly in France. There were over 7,500 EHPADs housing between 600,000 and 620,000 beds, with occupancy rates peaking at around 97%. Despite this apparently robust infrastructure, there is palpable tension due to the fact that supply is not keeping pace with booming demand. One of the main reasons for this is the strict regulatory environment, which creates a barrier to entry, slowing the expansion of new establishments. The authorization process for the creation of new EHPADs involves multiple administrative layers, which often slows down project execution.

What's more, the French retirement home market is marked by regional disparities in the availability of facilities. While retirement homes are concentrated in regions such as Nouvelle-Aquitaine, PACA and Occitanie, certain regions such as Île-de-France and Auvergne-Rhône-Alpes also offer a significant number of EHPAD places. Regions in the south of France are particularly favored for their favorable climatic conditions and optimal living environment. In economic terms, the retirement home sector represents a dynamic component of the French market.

The country's leading operators - Korian and Orpéa - have respectively multiplied their revenues by significant factors, reaching over 4.5 billion euros in sales by 2022. However, the market continues to face challenges, namely the need to balance costs and revenues.

The French retirement home market boasts a number of leading players, each helping to shape the landscape of care for the country's elderly. The market leaders are renowned for their extensive networks of facilities and comprehensive range of services that meet a diverse set of needs among the aging population.

• Korian - A pillar of care for the elderly Korian is an emblematic figure in the nursing home sector. With a notable presence not only in France but also on the European market, Korian has made a name for itself by providing a wide range of services for the care of the elderly. The company's philosophy is centered on improving the quality of life of its residents and innovating care solutions - a vision that aligns with the evolving expectations of the elderly.
• Orpéa - The international standard-bearer Orpéa is synonymous with quality and prestige in the field of retirement and nursing homes. As a company that has cultivated a strong international strategy, Orpéa's footprint extends beyond France's borders, earning it recognition as a significant force in the retirement home industry. Its activities are aligned with the company's commitment to meeting the diverse and complex needs of the dependent elderly population.
• DomusVi - The growing challenger Not far behind the market titans is DomusVi, which has firmly established itself as one of the leading challengers in this field. Although its core activities are concentrated in France, DomusVi is also on a path of growth and globalization, demonstrating its ability to anticipate and meet the care demands of an aging population. DomusVi's growth trajectory includes strategic acquisitions such as MEDEOS, which have strengthened its market position.
• Colisée - The aspiring competitor Among the growing French EHPAD groups, Colisée is a player showing potential for expansion by targeting markets outside France. With a strategy focused on quality care for the elderly, Colisée is taking steps to increase its influence and compete with the larger, more established names in the sector.

Small specialists and independent operators: While the aforementioned entities lead the way, the market is also made up of smaller French EHPAD specialists, such as Omeris and Hermes Santé, who have chosen to focus solely on nursing homes. Independent operators, often linked to public authorities and funding, form the backbone of localized care options available to the elderly throughout the country.

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 09/06/2023

Summary and extracts

List of charts

• The ten countries with the highest proportion of senior citizens
• Investment volume in retirement homes
• Proportion of people aged 65 and over
• Number of places in retirement homes
• Sales trends in France for the main market players
• Number of retirement homes
• Percentage of the population aged over 60 and over 80
• Number of APA (Allocation Personnalisée d'Autonomie) beneficiaries
• Breakdown of EHPAD residents by age group
• Breakdown of EHPAD residents by dependency level
• Change over time in the number of dependent residents, all categories of care combined
• Criteria for choosing an EHPAD home for the elderly
• Monthly sum that the French would be willing to pay to go to an EHPAD (nursing home)
• Choosing the right players to care for the elderly
• Breakdown of EHPAD by facility status
• EHPAD operators ranked by number of establishments
• Median out-of-pocket expenses by EHPAD type
• Spending on long-term care for the elderly
• Level of satisfaction with health care and support for the elderly and loss of autonomy
• Perception of healthcare personnel/caregivers looking after the elderly
• Percentage of respondents wishing the end of life to take place at home
• Impact of the revelations in the book "Les Fossoyeurs
• Top criteria cited to restore public confidence in EHPADs