NMa approves acquisition of Dutch ambulance service provider VZA by Amsterdam hospital AMC
The Netherlands Competition Authority (NMa) approves the acquisition of Dutch ambulance service provider VZA Groep B.V. (VZA), whose services include the provision of emergency and patient transport services, and which operates mostly in the Amsterdam metropolitan area, by Amsterdam-based Academic Medical Center (AMC). According to the NMa, it is unlikely that this acquisition of an ambulance service provider by a hospital will result in a significant impediment to competition.
The NMa investigated what options and incentives AMC, after acquiring VZA, would have in influencing the ambulances' destinations in favor of its own hospital. In addition, the effects of such behavior on the competitive position of other hospitals in the Amsterdam region have been investigated. For a number of reasons, the NMa believes this acquisition will not be restrictive to competition.
The new organization's ability to influence the ambulances' destinations is very limited. Ambulances service providers are legally required to provide reliable health care. This means they have to transport a patient to the nearest hospital that is able to provide the appropriate treatment or care. Amsterdam has eight hospitals, spread out across the city, which means the odds that all of the ambulances would go to AMC are quite slim. It is also expected that, even if, after the acquisition, AMC were to direct patients to its hospital, the (few) additional revenues would not weigh up against the costs. In fact, parties would risk damaging their reputations, as well as not being granted a license, or even losing their license, under the Dutch Ambulance care Act, which comes into effect on January 1st, 2011.
The NMa has also investigated the potential effects on the competitive positions of the other hospitals. This investigation reveals that only a small portion of all patients that are treated by a hospital is transported thereto by ambulance. It is therefore unlikely that, as a result of the acquisition, the competitive positions of the other hospitals would be significantly harmed.
The Dutch Healthcare Authority (NZa) has submitted its opinion on the planned acquisition. In it, the NZa states it believes that it is likely the planned acquisition could negatively affect public interests: quality, accessibility, and affordability. First, the NZa pointed out to the NMa the risk that the combination of AMC/VZA – should it be granted one or more licenses to provide ambulance services after January 1st, 2011 – could transfer its strong position on the market of ambulance services to other markets AMC is active on. A second risk the NZa identified in its opinion is the possibility that parties would direct the ambulances' destinations, based, in part, on financial motives.
The NMa has investigated both of the abovementioned risks that the NZa indentified, and has concluded that it is unlikely that parties would have more-than-limited options to influence the influx of ambulance-transported patients in favor of AMC, that parties have no incentives to do so, and that such a strategy would not significantly impede competition. Therefore, the NMa believes there is no reason to assume that the acquisition of VZA by AMC would significantly impede competition on the Dutch market or on a part thereof.
The public version of the decision will be made available on the NMa's website (www.acm.nl) for download after a confidentiality check.