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NMa Sees Scope for Competition between Providers of Hospital Care

Providers of hospital care have considerable freedom to determine their own supply. There are also able to influence the demand for hospital care. In principle, competition between providers of hospital care is possible and the Competition Act therefore applies to the hospital sector, possibly with the exception of emergency care. This is the most important provisional conclusion of the consultation document which the Netherlands Competition Authority (NMa) published today.

On the basis of questions, NMa invites providers of hospital care, health insurers, organisations representing patients and other interested parties to give their opinion of the provisional conclusions in the consultation document. For instance, NMa asks whether there are sufficient incentives for hospitals and independent treatment centres to work efficiently, even if making a profit is allowed. Respondents are also asked whether there are factors that restrict competition between regular hospitals and independent treatment centres. NMa is also interested in the expectations of interested parties with regard to competition between providers of hospital care after the introduction of a Diagnosis and Treatment Combinations [Diagnose Behandelcombinaties (DBCs)].

In the past, in merger cases NMa indicated that there was no scope for competition in the hospital sector given the nature of the applicable legislation and regulations. This meant that the Competition Act did not apply to these mergers. This issue has been reconsidered, for instance in the light of recent amendments to regulations and the discussion in society with regard to the desirability of the increasing concentration in the hospital sector.

The consultation based on the research into the scope for competition in the hospital care sector is important because NMa will base its enforcement policy on this. NMa not only assesses mergers, but also ensures that no agreements are made which restrict competition. In addition, undertakings may not abuse a dominant position.

The consultation document has been published on NMa's website and was also sent to various interested parties. The parties have until 1 September 2003 to respond in writing to NMa's analyses and opinions. NMa is also organising a meeting on 29 August 2003 at which parties may present their opinions verbally. On the basis of the responses received from interested parties, NMa will present its view on the operation of market forces in hospital care in a document entitled 'The Future of Hospital Care'. The publication of this document is planned for the autumn of 2003.

This report will be published within the framework of NMa's activities in the healthcare sector, announced in NMa Agenda 2003. A shift is occurring in the sector from supply-driven to demand-driven care. The point of departure of government policy is that market forces can bring about a better match between supply and demand. An increase in market forces in the healthcare sector may also result in efficiency improvements. If a demand-driven healthcare sector is to be realised, it is crucial that the entry of new competitors into the market is not impeded and that competition between existing market players is not restricted.