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Excerpt from LHL’S annual report for 2016

The nature of the business and location

LHL represents and works for patients with heart and pulmonary diseases in Norway. LHL has 52 000 members and owns hospitals in all regions in Norway.

LHL is a non-profit organization. This means that any financial profit remains within the organization and is channeled to medical purposes. No earnings may be taken out of the organization.

As a hospital owner we have extensive services in rehabilitation and treatment. LHL has an agreement with regional health authorities and delivers a material share of public health care services in the fields of cardiac surgery and cardiac and pulmonary rehabilitation.

LHL currently building a new hospital and will expand our capacity in medicine and surgery from 2018. LHL also owns Norway’s largest private health insurance company (Vertikal Helse).

Over the past year, LHL and its subsidiaries have continued restructuring their operations. In September 2015 LHL’s Executive Committee decided to adopt a new governance structure for the LHL group. As a result, the following companies were wound up during 2016: LHL Holding AS, LHL Eiendom Holding AS and LHL-klinikkene AS . Following the dissolution of the companies, their operations are now integrated into the operations of LHL. As of 1 January 2016, the LHL clinics’ operations have been transferred to LHL by means of a transfer of undertaking at fair market value. Fair market value exceeded book value and has thus had a positive impact on LHL’s financial items. The LHL clinics have continued their work to relocate the Feiring and Glitre clinics’ operations to a new hospital building at Gardermoen. Negotiations on the lease were concluded in June 2015, resulting in the signing of a lease with a term of 25 years.

In 2016, LHL acquired the company Vertikal Helseassistanse AS through its newly established company Helseassistanse Holding AS. The acquisition is part of LHL’s strategic move to become an important player in the health sector and related areas.

Vertikal Helseassistanse AS

The shares in Vertikal Helseassistanse AS were purchased by LHL through its newly established company Helseassistanse Holding AS in April 2016. Vertikal Helse is a medical competencies business offering a wide range of services. The company is Norway’s largest supplier of health insurance and also provides other health services to private customers, businesses and organizations. Vertikal Helse’s market share in the health insurances industry is 32% with health insurance being its most important product. In addition, the company offers dental insurance, medical online services and medical procurement services. The entity has more than 155 000 members. Vertikal Helseassistanse AS was launched in 1998 in order to offer health insurance to businesses, organizations and municipalities. The objective is to reduce absence from work due to sickness and shorten time spent waiting for health services in Norway. The company has become one of Norway’s leading suppliers of health insurance and is one of Norway’s largest private purchaser of health services. The purchase of the company Vertikal Helse is part of LHL’s strategy to re-enforce its position as a major player in the health industry.

Going concern

After substantial changes, the LHL group’s results of operating activities have been good. However, in 2016 the group’s clinical operations had a loss. This is largely due to a decline in purchases from the South-Eastern Norway Regional Health Authority. In response to this, the organisation in 2016 implemented significant cost cuts in its clinical operations. Costs were also cut in the member organization. In 2017 LHL will continue to work on streamlining its activities and on achieving synergies through the acquired businesses – as well as through gathering its operations at the LHL clinics Feiring and Glittre and the LHL administration in a single place at Gardermoen. 

Equality of opportunity

It is the objective of LHL to be a workplace where there is no discrimination on the grounds of ethnicity, national origin, race, language, religion or belief. LHL seeks to achieve full equality of opportunity between women and men and the association’s policy covers equality of opportunity; it seeks to avoid any discriminatory treatment on the grounds of gender in matters such as wages, advancement and recruitment. Traditionally, LHL has recruited staff from professional communities where men and women are represented equally.

Out of LHL’s staff, 499 are women, amounting to 78% of the organization’s staff. The Executive Committee has thirteen members, five of whom are women – representing 38% of the Executive Committee’s members. LHL’s management team consists of eight women and five men.

The company’s position and the business’s profit

In the view of the Committee, the annual accounts for the accounting year 2016 fairly depict the association’s situation and profit of the operations. Beyond the information presented below and in the annual accounts, the Committee is not aware of any other matters relating to market conditions or price trends that are relevant in terms of assessing the company.

The board’s proposal for allocating the profit

LHL’s annual profit is 182 035 848 after tax. The Executive Committee proposes that the profit be allocated to other equity.

The Executive Committee has reviewed the profits of the companies forming part of the group. The total profit for the group is 85 774 365 which is entered against other equity.