‘Bismarck vs Beveridge: what can healthcare-specific merger control in the Netherlands and England achieve?’
July 11, 2014 Leave a comment
The CCP Spring seminar series reaches its conclusion on Friday 10th July with the magnificent Mary Guy (CCP and UEA Law School) presenting the preliminary findings of her latest research project, entitled ‘Bismark vs Beveridge: what can healthcare-specific merger control in the Netherlands and England achieve?‘. An abstract for her presentation can be found below.
Despite representing two very different healthcare models – a Bismarck health insurance system and Beveridge national health service funded by general taxation, respectively – the Netherlands and England are experiencing a number of similarities as they introduce competition into healthcare. These include modifications to the assessment of (typically) hospital mergers after gradually applying general merger control to the healthcare sector.
In the Netherlands, following initial reluctance to subject hospitals to general merger control (which is closely related to the EU regime), there have been moves to modify the assessment process following a range of controversial merger decisions. These modifications started with a reduction in turnover thresholds and the adoption of specific assessment criteria and in 2014 have culminated in the implementation of a controversial statutory “healthcare-specific” test, which sees the healthcare and quality regulators examine a proposed merger prior to determination by the ACM.
In England, the traditional distinction between the Private Healthcare (PH) sector and the NHS was reflected in the practical application of the general merger test of the Enterprise Act 2002 (EA02) to the former and a non-statutory NHS merger test to the latter. However, the Health and Social Care Act 2012 (HSCA 2012) has prompted two potentially significant changes to healthcare merger review in England. Firstly, mergers involving NHS Foundation Trusts are now subject to EA02 and Monitor, the economic regulator for healthcare, has an advisory function in relation to these. Secondly, the removal of the private patient income cap by the HSCA 2012 has led the CMA to respond to an anticipated increased in Private Patient Unit (PPU) transactions by proposing a new test.
As the ultimate competence to determine mergers remains with the competition authorities in both countries, what can be achieved by regulator input and modified tests is perhaps questionable. However, the sensitivities which attach to healthcare in general (with regard to the continuity and affordability of care) suggest that there is a need to consider carefully how merger control is to be applied in a transition (and “problem”) market, particularly given the increasing lack of Ministerial competence in this area in both countries.
This presentation considers some of the difficulties of assessing hospital mergers, such as defining markets and how public interests have been reflected in both countries. It then proceeds to consider the development of “healthcare-specific” merger tests in light of what these can achieve in terms of developing competition in the sector and addressing non-competition concerns such as patient interests.
The seminar will take place from 13:00-14:00 in the Queens Building, Room 0.08.
From the CCP, we thank all of those who have presented this semester. The Seminar Series will return after the Summer break on Friday 19th September 2014. Further information will be posted on our Seminar Series pages in due course, where you can also access additional information on previous seminars.