Six out of ten youth care providers make excessive profits. This involves at least 10 percent profit, while 3 to 7 percent is the norm in the healthcare sector. This is apparent from an analysis of annual accounts from 2019 of 2107 youth care providers. The analysis was performed by Kurtosis at the request of Domestic Administration.
More than 40 percent of the providers even made more than 20 percent profit. This mainly concerned providers with a turnover of between 100,000 and one million euros. “These companies make the highest profits, with outliers of 50 percent or more,” said Wolter van Dam, partner of Kurtosis. “It often concerns providers for dyslexia, care farms and family homes.”
According to Van Dam, a normal profit indicates that the money is actually spent on care. For example, providers with a turnover of more than one million euros made an average profit of 2 to 3 percent. “It concerns the so-called system providers, such as institutions that offer mental health care, crisis assistance or youth care with residence,” says Van Dam.
For almost three quarters of the providers, less than 70 percent of all expenditure was spent on employees’ wages. Remarkable, says Van Dam. “The healthcare sector is a labour-intensive sector. You can expect that the largest part of the budget will be spent on wage costs.” Again, this mainly concerned providers with a turnover of up to one million euros.
Irregularities and financial risks
Not only were high profits noted. Nearly one in five healthcare providers was found to be illegal and 13 percent identified financial risks. The combination of a high profit and low wage costs can indicate such an illegality.
The nature and extent of the problems varied. For example, a number of providers had not completed their annual accounts correctly or incompletely, while other providers scored poorly on, for example, the ratio between wage costs, profit and the salary of the director.
NOS Stories previously made this video about youth care, in which young people were discussed:
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