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ACM clears merger between two Dutch hospitals in Amsterdam

05-09-2017

The Netherlands Authority for Consumers and Markets (ACM) has cleared the merger between the Academic Medical Center (AMC) and the VU University Medical Center (VUmc) in the Dutch city of Amsterdam. ACM does not foresee any significant consequences for competition as a result of the merger. ACM has concluded that sufficient options remain for patients and health insurers after the merger. This applies to both basic care and complex hospital care. In high-complexity care, ACM has observed that both hospitals offer unique care that is not offered elsewhere. The merger will not change this. For the remaining high-complexity care, AMC and VUmc compete with other hospitals in the region. Based on an extensive investigation, ACM has found that these hospitals have a limited combined market share (between 30 and 40 percent) on this market, and that other hospitals in the region act as alternatives for insurers and patients.

Are there sufficient alternatives for patients?

In early-2017, ACM launched an investigation into the merger’s consequences for competition, especially with regard to high-complexity care or complex hospital care. Complex hospital care includes complex surgical procedures, patients with multiple conditions, or treatments that require highly specialized equipment. ACM has investigated whether sufficient alternatives remain for patients and insurers after the merger. ACM has concluded that patients will continue to have sufficient options after the merger as well. There are other hospitals in the region that offer complex hospital care, too, such as the Onze Lieve Vrouwe Gasthuis (OLVG) and the Antoni van Leeuwenhoek Hospital (AVL).

Alternatives for health insurers

ACM concluded that health insurers, too, will continue to have sufficient alternatives after the merger to procure care. Health insurers already have sufficient alternatives if they wanted to procure care selectively, but, so far, they have only done so in a limited number of cases.

During the merger investigation, ACM did, however, receive indications that these hospitals could use their position in unique care to strengthen their hands in the negotiations with health insurers about basic care and high-complexity care, which are segments where competition is allowed. Unique care concerns, for example, difficult, expensive, or uncommon treatments for patients. In this highly-specialized care market, competition is either limited or non-existent. These indications are unrelated to the consequences of the merger between AMC and VUmc. ACM together with the Dutch Healthcare Authority (NZa) will launch a preliminary investigation into this anticompetitive risk on the basis of other statutory powers both regulators have. 

Chris Fonteijn, Chairman of the Board of ACM, explains: “If anticompetitive risks do exist already, then they could have a negative effect on prices and options for patients. Together with the NZa, ACM wants to safeguard sufficient options for patients and insurers.”

Merger assessments

Both ACM and the NZa are charged with oversight of the health care sector. ACM monitors whether health care institutions do not become too dominant if they merge. That could harm patients and insured. The NZa assesses the merger process itself.