Further investigation needed into acquisition of IJsselland Hospital by Erasmus University Medical Center
Erasmus University Medical Center (Erasmus MC) in the city of Rotterdam wishes to acquire IJsselland Hospital in the town of Capelle aan den IJssel. The Netherlands Authority for Consumers and Markets (ACM) wishes to conduct a further investigation into the effects of this acquisition on the accessibility, affordability, and quality of health care in the region. That is why Erasmus MC and IJsselland Hospital must apply for a license for the acquisition.
Erasmus MC in Rotterdam is a large academic hospital that offers high-complexity care, complex care, and basic care.
IJsselland Hospital in the town of Capelle aan den IJssel mainly offers basic care. In addition, both hospitals also offer complex care, particularly in the field of gastroenterology. At the moment, these two hospitals determine their strategies independently, and already work together in some areas of medical care.
In its investigation so far, ACM has concluded that, as a result of the acquisition, reachability, affordability, and quality of health care could be reduced with regard to both patient care as well as health care procurement by health insurers.
After the acquisition, Erasmus MC and IJsselland Hospital will have high combined market shares in northern Rotterdam and its surrounding area in terms of patient care. As a result of the acquisition, patients could have fewer independently-operating hospitals to choose from in their areas. Patients may thus have to travel farther if they want more options with regard to basic care and certain types of complex care.
With regard to health care procurement by health insurers, ACM sees that Erasmus MC already has a strong position in hospital care in the greater Rotterdam area. Health insurers say it is already difficult not to sign a contract with Erasmus MC. After the acquisition, this may also apply to IJsselland Hospital. As a result, the bargaining positions of health insurers may deteriorate, and price, quality, and innovation in health care could also be reduced.
What are the next steps?
If both hospitals decide to continue with their acquisition plans, and file an application for an acquisition license, ACM will launch a follow-up investigation into the effects of this planned acquisition. ACM will then assess whether health insurers will still have sufficient opportunities in the region to sign contracts (or to continue to sign contracts) at a reasonable price (and against other conditions) for treatments of their clients.
ACM will also assess if patients will continue to have sufficient opportunities to choose a different hospital in their areas, if they do not wish to go to Erasmus MC or IJsselland Hospital.
ACM’s merger control in health care
By assessing mergers and acquisitions in health care, ACM helps keep health care affordable and accessible, and helps maintain the quality of health care. When assessing mergers and acquisitions, ACM puts the effects on patients and insured first. If patients and health insurers have sufficient other options after the merger or acquisition, it will help reduce prices, improve quality, and promote innovation. In addition, health care providers also often work together without such collaborations ever becoming a full-fledged merger or acquisition. ACM has published guidelines containing conditions under which market participants in the health care sector are able to work closely together as part of the initiative called ‘The Right Care in the Right Place’ (in Dutch: De Juiste Zorg op de Juiste Plek). These conditions relate to health care affordability, accessibility, and quality.
Collaborations in the health care sector (in Dutch)