Key takeaways
The Dutch government is considering stricter rules on profit distribution in the healthcare sector, with a particular focus on the role of private equity investors.
A legislative proposal is pending, but recent political developments and a key court judgment have prompted a reassessment of the proposal’s scope and impact.
The debate centers on balancing the need for private investment in healthcare with concerns about quality, accessibility, and affordability of care.
The outcome of the legislative process is expected later in 2026, and significant changes to the legal framework are not imminent.
Stakeholders should monitor developments closely and review their investment and operational structures in light of potential changes.
For several years the distribution of profit within the Dutch healthcare sector has been the subject of public and political debate. The discussion has intensified as private equity investment in healthcare has grown, raising questions about the impact on patient care, costs, and the long-term sustainability of the system.
As of 29 January 2025, a legislative proposal introducing stricter rules on profit distribution in healthcare is pending before the Dutch House of Representatives (the "Legislative Proposal").1 While the Legislative Proposal is sector neutral, the public and political debate is increasingly focused on the role of private equity investors in healthcare.
Critical voices have been raised in respect of the Legislative Proposal within the House of Representatives, saying the proposal does not go far enough. Several members of the House of Representatives have explicitly linked these concerns to the perceived impact of private equity-backed healthcare providers on affordability, quality and continuity of care, with some even calling for a full ban on private equity in healthcare.
In the meantime, the Dutch government has fallen, and the Minister of Health, Welfare and Sport (the “Minister”) is reassessing its options to further amend the Legislative Proposal before it is ultimately put to a vote. This reassessment explicitly includes an analysis of the effects of stricter profit distribution rules on investment incentives, in particular those of private equity funds. Efforts are currently being made to form a new (minority) government. The coalition agreement of the yet to be established (minority) government reflects the intention to strengthen standards for responsible entrepreneurship in the healthcare sector, including curbing alleged excesses of private equity, to ensure accessibility, quality, and the interests of patients. The coalition agreement refers to broader powers for authorities to supervise mergers and acquisitions. The coalition agreement does not go into much detail on the consequences of these intentions for profit distribution.
Current legal framework
Under the current legal framework, healthcare providers may not have a profit motive, which is also referred to as the profit distribution ban (“winstuitkeringsverbod”).2 This means that dividend distribution is not allowed, except for providers of certain categories of healthcare.3 Excluded from the profit distribution ban are types of healthcare that are generally considered to be less complex, for example providers of general practitioner, dental and pharmaceutical care, or physical therapy, whereas hospital care is not exempted.
The profit distribution ban, however, only applies to the main contractor (the primary party contracted to deliver healthcare services). In practice it is not uncommon for main contractors to outsource the provision of healthcare, that is subject to the profit distribution ban, to subcontractors, as subcontractors are not bound to the profit distribution ban. This distinction has historically allowed private equity-backed healthcare groups to operate through multi-entity structures, combining regulated main contractors with profit-generating subcontractors.
The profit distribution ban does furthermore not apply to individual self-employed healthcare providers providing (non-exempted) healthcare. By way of illustration, a self-employed physician that works in a hospital is not affected by the profit distribution ban. Nevertheless, in its judgement of 22 October 2025, the highest Dutch administrative court held that due to this distinction, and the way the Minister of Health applied the profit distribution ban, infringes the freedom of establishment under the Treaty on the Functioning of the European Union in violation of EU law, as no objective or coherent justification exists for permitting profit distribution in respect of (non-exempted) healthcare provided by self-employed healthcare professionals, while prohibiting such profit distribution where the same services are provided by employed healthcare professionals.4
Legislative Proposal
Similar to the current legal framework, the Legislative Proposal continues to exempt certain categories of healthcare from the profit distribution ban, to be further specified by governmental decree. In addition, the position of subcontractors remains unchanged, in that subcontractors will continue to fall outside the scope of the profit distribution restrictions.
A key new element of the Legislative Proposal is the broader interpretation of the concept of profit distribution. Under the proposed framework, profit distribution would no longer be limited to dividend payments, but would also encompass other forms of value transfer, including non-monetary benefits and payments in kind. Certain payments will, however, remain permissible, such as non-excessive remuneration for services rendered or goods supplied by a healthcare provider.
Furthermore, healthcare providers that are exempted from the profit distribution ban may not take irresponsible risks when attracting equity or debt. Although the concept of "irresponsible risks" is not further defined in the Legislative Proposal, it may lead to increased scrutiny of leveraged acquisition structures, shareholder loans and refinancing transactions, all of which are standard tools in private equity transactions.
Another notable element of the proposal is the introduction of clear conditions that must be satisfied before profits may be distributed. These conditions are intended to ensure that providers are fully compliant with supervisory authorities, have sufficient financial resilience, and have recently disclosed independent patient satisfaction data. Profit distribution would only be permitted where it can reasonably be expected not to affect the quality or continuity of healthcare services.
Reassessment of Legislative Proposal
On the 11 December 2025, the Minister informed the House of Representatives of its intention to reassess the Legislative Proposal, whereby the Minister sees three possible ways forward in respect of the profit distribution ban:
- introducing a profit distribution ban based on healthcare type;
- further regulate the profit distribution ban by introducing measures to prevent excessive profit distribution; or
- a total ban on profit distribution within healthcare.
The Minister already made clear that the first and third option are not likely to be implemented in a future revised Legislative Proposal.
As part of the ongoing reassessment, the Minister will also consider additional measures aimed at mitigating the perceived negative effects of private equity participation in the Dutch healthcare sector. This follows an earlier commitment by the Minister and a parliamentary motion calling on the government to develop a plan to exclude private equity from healthcare. In this context, two options have been identified:
- further restricting risky or undesirable conduct within the healthcare sector, irrespective of the type of investor involved; or
- introducing a direct prohibition on healthcare providers entering into agreements with private equity investors.
According to the Minister, targeting private equity as a specific category of investor raises significant legal and policy concerns. Such a measure would interfere with contractual freedom and would likely be incompatible with EU law principles on the free movement of capital and freedom of establishment, absent a compelling justification based on necessity and proportionality.
Moreover, the Minister notes that current evidence does not demonstrate that private equity-backed healthcare providers systematically pose greater risks to the quality, accessibility or continuity of care than providers backed by other types of investors, rendering a targeted ban difficult to substantiate from a legal perspective. In addition, a categorical ban on private equity would be of limited practical effectiveness, as it would not address similar conduct by other investor types and could be circumvented through alternative investment or governance structures.
By contrast, although the first option, focusing on restricting specific behaviour rather than investor categories, aligns less directly with the Dutch parliament's call to exclude private equity from healthcare, the Minister considers this approach to be more legally robust and potentially more effective in the long term, as it addresses underlying risks across the sector without singling out a particular class of investors.
Potential implications for private equity
Already under the current legal framework, private equity investors face material constraints in the Dutch healthcare sector, including limited return mechanisms, heightened regulatory scrutiny (e.g. healthcare concentrations are subject to a mandatory sector-specific review by the Dutch Healthcare Authority (the “NZa”) prior to any substantive antitrust assessment by the Dutch Authority for Consumers and Markets (the “ACM”)), and political sensitivity surrounding buy-and-build strategies.
If the Legislative Proposal is adopted in its current or an amended, more restrictive form, private equity investors may face additional challenges, such as:
- reduced predictability of cash-flow based returns;
- increased execution risk in exit scenarios;
- downward pressure on valuations due to constrained value extraction mechanisms; and
- greater regulatory involvement in financing structures and shareholder arrangements.
The Minister has furthermore cautioned that a direct prohibition on healthcare providers entering into agreements with private equity investors could give rise to unintended consequences, including reduced access to capital, adverse effects on innovation and affordability, risks to the continuity of care, and potential exposure of the state to damages claims.
At the same time, healthcare providers and insurers themselves have emphasised that private investment currently plays a role in alleviating capacity constraints within the Dutch healthcare system.5 Approximately 30% of healthcare delivery in the Netherlands is financed by private parties, including specialised regional and national care providers that, in certain segments, are able to offer more timely access to care. Independent providers often operate at lower reimbursement levels than hospitals, which may result in cost efficiencies for the public system.6
From an investment perspective, private equity participation in healthcare typically focuses on operational improvement and scaling rather than ongoing profit extraction, with returns largely realised at exit. Nevertheless, further restrictions on private equity may affect investment appetite and available capacity, potentially complicating insurers’ ability to meet their statutory duty of care. How these considerations should be balanced against public-interest objectives such as quality, accessibility and affordability of care remains a central issue in the ongoing policy debate.
Next Steps
In light of the criticism raised on the Legislative Proposal and the recent judgement on the current legal framework, the Minister is reassessing the Legislative Proposal including the potential implications of a more stringent profit distribution regime. The outcome of this assessment is expected in the first half of 2026, after which the House of Representatives and the Senate are expected to consider the (amended) proposal. Any new legal framework on profit distribution, including in relation to private equity participation in the Dutch healthcare sector, is therefore not expected to enter into force in the near term. We will continue to closely monitor legislative and policy developments and will provide further updates as appropriate.
References
- In Dutch: “Wetsvoorstel integere bedrijfsvoering zorg- en jeugdhulpaanbieders”.
- Article 5 of the Care Institutions (Accreditation) Act (in Dutch: “Wet toelating zorginstellingen”).
- Article 3.1 of the Care Institutions (Accreditation) Implementation Decree (in Dutch: “Uitvoeringsbesluit WTZi”).
- Article 49 Treaty on the Functioning of the European Union.
- MENA.nl, "TopzorgGroep op de bres voor private equity in de zorg", 22 January 2026.
- M. Nuijten and M. van Putten, "Een verbod op private equity is een mokerslag voor de zorg", Financieel Dagblad, 29 September 2024.
