For the first merger prohibition hospital – Financieele Dagblad (Registration)

For the first time cross the Authority for Consumers and Markets (ACM) a stick for a merger between hospitals. The regulator announced Wednesday that it does not agree with the proposed merger of two hospitals in England.

It involves Foundation Albert Schweitzer Hospital and the Rivas Care Group. Both hospitals are “surprised” and “disappointed” about the ACM-decision.

Criticism mergers

Since 2011, thirteen hospital mergers have been approved by the competition authority. This is the ACM (and predecessor NMa) has come to be strongly criticized, including from political parties and from patients federation NPCF. Several of those mergers arose proven high market concentration and appeared before a high risk of price increases.

The Dutch Healthcare Authority (NZa) wrote this Spring still in a paper that half of the mergers because of that risk actually retrospect should not have to go through. The Central Bureau recently advocated tightening of merger control in health care.

Discipline

Reason for ACM to reject the South Holland merger is an important part of the competitive pressure drops on parties, despite the presence of some other hospitals in the area. Here, the ACM is based on research on patient flows, research among GPs and information from health insurers.

ACM explored the possibilities of patients and health insurers to discipline the merged hospitals and concludes that they are insufficient. Patients have limited ability to ‘vote with their feet and move to another hospital, while health insurers remain insufficient alternatives to repurchase sharply after the merger

limited market power

Hospitals opposing view. Pieter de Kort, CEO of Rivas, stated that hospitals have a combined market power of “only” 14%. “And there are plenty of alternatives for patients in easy traveling distance.” Earlier mergers According to him, moreover, while in practice led to lower prices and higher quality.

The question is why the ACM in this case now judges that unlike previous hospital mergers. De Kort know the answer. “With mergers in South Limburg and in the Tilburg region were no alternatives in the area for the patient and are well favored.”

Insurers critical

A key factor appears to be a change in attitudes of health insurers relative to hospital fusions. In the past they have mainly positive opinion, in the belief that they could punish when it would be too expensive or poor quality would make a merged hospital with their procurement

The decision on the merger of the Albert Schweitzer and Rivas signals the ACM, however,” an ever-widening declining optimism among insurers on their ability to negotiate toward hospitals, especially in situations where there for them lack sufficient viable alternatives .

General reasoning

De case demonstrates the increasing importance of merging hospitals to get health insurance on their side, says Diederik competition specialist Schrijvershof Maverick Lawyers. At the same time, the ACM will have to motivate or the arguments of the insurers it makes sense. “In the past, the ACM was reproached that she accepted easily by the health insurers that they merged hospital could be disciplined. Now the opinion of the insurers seems to have changed as a result of their experiences with previous mergers elsewhere in the country. You may wonder whether this general argument it is a valid argument in this particular case. “

The hospitals are considering to appeal against the decision of the ACM. The regulator is currently no other hospital mergers in treatment. The AMC and VUmc in Amsterdam do plan to impose a merger decision.