NMa: hospital merger in southern region of the Netherlands requires a license
Having carried out a preliminary investigation, the Netherlands Competition Authority (NMa) has come to the conclusion that competition in the markets for inpatient and outpatient hospital care could be impeded if two hospitals in the southern Dutch province of Limburg merged. The two hospitals involved are Orbis Medical Center in the municipality of Sittard-Geleen and Atrium Medical Center, which offers health care services in Heerlen, Brunssum and Kerkrade. The NMa has ruled that this concentration requires a license. In case the merging parties apply for a license, the NMa will then carry out a more detailed investigation into the planned concentration’s effects on competition.
The merging parties notified the NMa on July 29 of their intention to merge. The NMa carried out a preliminary investigation into the planned merger’s effects. In this investigation, the NMa also included opinions of various interested parties. The NMa analyzed, among other aspects, per municipality what hospitals patients currently select, and how long patients must travel in order to reach the various hospitals in Limburg. The investigation’s results revealed that, in the entire province, only two hospitals would be sufficiently able to exert competitive pressure on the merging parties. These two hospitals are Maastricht University Medical Center (AMZ) and Laurentius Hospital in the city of Roermond. The merged hospital would have a market share of over 50 per cent in both inpatient and outpatient hospital care. The NMa believes that it is therefore likely that competition in the hospital market in the southern part of Limburg could be significantly impeded. If a license application is submitted, the NMa will further investigate, among other things, the question to what extent the two aforementioned hospitals and hospitals in the border regions in Belgium and Germany (as the province of Limburg directly borders these two countries) would be able to compete with the merged hospital.
The Dutch Healthcare Authority (NZa) has issued an opinion in this case. The NZa identifies two potential drawbacks to this merger: an increase in hospital care prices, and a reduction in options for patients in case of referrals to superior hospital care in the region.
If the merging parties decide to submit a license application, the NMa is required to decide within 13 weeks whether or not the concentration is allowed. When reviewing mergers and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a dominant position can have negative effects on the price, quality and range of the products or services offered on the market. In such cases, the NMa could attach conditions to the concentration, or it could block the concentration altogether.