NMa blocks merger of health care providers in central Netherlands
The Netherlands Competition Authority (NMa) has blocked the planned merger between health care providers Zorggroep Noordwest-Veluwe and Het Baken, both of which are based in Veluwe, a region in central Netherlands. The NMa argues that this merger would have eliminated each other’s main competitor. It would have reduced health care options for patients, and would have taken away mutual competition between these providers. In another case, the NMa has decided that the planned merger between two hospitals in the southern Dutch city of Tilburg requires a merger license. If this merger went through, it could impede competition in the inpatient and outpatient care markets. If these hospitals decide to submit a license application, the NMa is required to decide within 13 weeks whether or not the concentration is allowed.
Since late June, the NMa has extensively investigated the effects of a potential merger between two providers of, among other services, nursing home care, both of which are based in Veluwe. The investigation has revealed that nursing care patients often choose local providers. Patients in this region rely on local providers Zorggroep Noordwest-Veluwe and Het Baken. By turning down their license application, the NMa has prevented that the merger would have resulted in these health care providers being stimulated too little to differentiate themselves from each other, for example, by innovating and improving their health care services. After all, competitive pressure from each other’s biggest competitor would have been very little.
On November 10, the TweeSteden hospital with locations in the southern Dutch cities of Waalwijk, Tilburg and Oisterwijk, and the St. Elisabeth hospital in Tilburg notified the NMa of their merger plans. Following that notification, the NMa carried out an investigation, looking into, among other aspects, to which hospital patients currently travel to, and what the weighted average travel time is to other hospitals in the vicinity of Tilburg. This investigation revealed that the majority of patients from the greater Tilburg area (for outpatient and inpatient care) go to the hospitals of the concerned parties. Since the concerned parties primarily compete with each other, and since competitive pressure from other hospitals is less intense, the proposed merger was provisionally blocked by the NMa.
In two separate opinions, the Dutch Healthcare Authority (NZa) stated it shared the NMa’s view that both mergers may negatively affect accessibility, affordability, and quality of nursing home care in the region of Veluwe, and of hospital care in the greater Tilburg area.
Since 2004, the NMa has taken more than 150 decisions with regard to concentration assessments in the Dutch health care industry. There have been eight concentration cases where the merging parties themselves, in part because of the NMa's objections, decided to cancel their merger plans. In addition, there have been eight cases where the planned merger did go through, albeit after the original merger plans had been modified after the merging parties had put forward so-called remedies (proposals) to take away antitrust concerns the NMa had identified. The number of health care mergers the NMa reviews has dramatically increased since January 1, 2008, because, on that date, the turnover threshold for mandatory notification of health care mergers with the NMa was lowered. When reviewing concentrations, the NMa aims to safeguard the quality and efficiency of health care by preserving health care options of patients.
On January 1, 2013, the NMa will merge with the Netherlands Consumer Authority and the Independent Post and Telecommunications Authority of the Netherlands (OPTA), creating a new authority: The Netherlands Authority for Consumers and Markets (ACM). This new authority aims to ensure that markets work in order to protect consumer interests. To this end, the ACM will focus on three main themes: consumer protection, industry-specific regulation, and competition oversight.