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NMa clears three hospital mergers, price ceiling imposed

Affordable hospital care comes first

The Netherlands Competition Authority (NMa) has given the green light to three hospital mergers in different parts of the Netherlands. All hospitals have indicated they will comply with a self-imposed price ceiling, leaving the NMa confident that these mergers will not result in unwanted price increases.

Price levels at the merged hospitals cannot exceed predefined maximum levels, which are to be  annually indexed. The hospital mergers in question are: Orbis Medical and Care Concern and the Atrium Medical Center Parkstad in the southern Dutch province of Limburg, Spaarne Hospital and Kennemer Hospital in the western part of the Netherlands, and two hospitals in the southern city of Tilburg, which are TweeSteden hospital and the St. Elisabeth Hospital.

It is the health insurers’ job to bargain for the best price-quality ratio possible on behalf of their clients. Health insurers themselves are optimistic about their ability to do so. Henk Don, member of the Board of the NMa reacts: ‘They have already demonstrated that they are able to influence the market by focusing on health care quality. The insured thus benefit directly. The price ceiling acts as a safety net in case the negotiations on price-quality turn out to be less positive as currently anticipated.’ The hospitals involved have agreed to comply with the price ceiling. The NMa will keep a close watch on whether the hospital prices will not exceed that price ceiling. In 2015, the NMa will assess whether the price ceiling is still needed.

The health insurers and client councils are positive about each of the three planned mergers. The Dutch Healthcare Authority (NZa) considers potential price increases as the biggest drawback of these mergers. That concern has been eliminated by the introduction of the price ceiling.

The NMa had previously imposed license requirements for these three hospital mergers: