The nursing home market in France

The term "retirement home" covers several types of medical-social establishments offering a variety of housing solutions for the elderly. Retirement homes can be public or private, medicalized or non-medicalized, specialized or non-specialized, etc.

Medicalized retirement homes fall into 2 main categories:

EHPADs (Etablissements d'Hébergement pour Personnes Âgées Dépendantes - accommodation establishments for dependent elderly people), which cater for dependent elderly people who require permanent supervision by a medical team.

USLDs (Unité de Soins de Longue Durée - Long-term care units), with permanent medical staff and enhanced medical equipment to ensure total, constant care for senior citizens.

In Europe, the aging of the population is prompting governments to invest in the construction of new medical residences for senior citizens, as is the case in Germany, which has invested 10.860 billion euros in this sector.

As EHPADs are by far the majority of retirement homes, this study will focus primarily on this category. In 2019, France was home to 7,519 EHPADs, representing 70% of the country's retirement home capacity . USLDs accounted for less than 5.51% of capacity.

In 2021, EHPADs may be public (45% of establishments), private commercial (24%) or not-for-profit (31%) [Les Echos]. In 2019, 611,673 beds were available in EHPAD, with an average occupancy rate of 97%.

In France, the market for nursing homes is growing rapidly, driven by an aging population and increasing dependency among the elderly [INSEE]. This increase is set to accelerate further due to the arrival at 3ᵉ age of the generation born of the post-war "baby boom" and the continuing rise in life expectancy.

However, with supply outstripping demand, the market has been characterized for several years by significant challenges. In particular, the slowdown in the number of new establishments, existing barriers to entry, lack of financing and recruitment difficulties are key issues.

Inaddition, for several years now, establishments have been suffering froman image deficit[Les Echos]. Players are therefore focusing on modernizing their structures and seeking to improve residents' quality of life. In addition, the main players in the sector, such as Korian, Orpéa and DomusVi, are diversifying their offering, notably by strengthening their homecare services, taking over the entire operation of nursing homes and positioning themselves in alternative accommodation offers to nursing homes.