Market Share and Pricing Safeguards for Private Equity-backed Nursing Homes

Mr Kenneth Tiong Boon Kiat asked the Coordinating Minister for Social Policies and Minister for Health following the Competition and Consumer Commission of Singapore's clearance of the recent merger between Singapore's two largest private nursing home operators, (a) what is the combined market share of private equity-backed nursing home operators; (b) what percentage of the Ministry's Build-Own-Lease operating subventions currently flow to such operators versus Voluntary Welfare Organisations; and (c) what safeguards exist against future price increases in an increasingly consolidated market.

The two merging private nursing home operators will account for around 10% of the total nursing home market. The Competition and Consumer Commission of Singapore has assessed that the merger does not result in a substantial loss of competition in the provision of nursing home services.

One of the key reasons is that under the Build-Own-Lease model, Government fully funds the capital costs of development and appoints both private and non-private operators for the facility through competitive tenders, which lowers the barrier to entry for nursing home operators and supports the diversity of options. The distribution of Government operating subvention to private operators is generally proportionate to their subsidised market share.