NMa says proposed hospital merger in western Netherlands requires a license

The Netherlands Competition Authority (NMa) has found that the proposed merger between two hospitals near the western Dutch city of Haarlem, Spaarne Hospital and Kennemer Gasthuis, may reduce competition in the market for hospital care. The NMa has therefore decided that these hospitals must apply for a merger license first before going through with the merger. If these hospitals apply for a license, the NMa is then required to determine within 13 weeks whether or not the merger is approved.

In its investigation in the notification phase of the proposed merger, the NMa identified for each municipality in the greater Haarlem area which hospitals patients actually go to. In addition, travel distances to other hospitals in the area were determined. It turned out that a considerable share of patients in the area go to Spaarne Hospital and/or Kennemer Gasthuis. This is particularly the case with patients from the following municipalities: Haarlem, Zandvoort, Heemstede, Hillegom, Bloemendaal, Haarlemmermeer, Haarlemmerliede and Spaarnwoude. In effect, both of these hospitals primarily compete with each other, and to a lesser extent with surrounding hospitals. The merger would eliminate the competitive pressure each of them exerts on the other. This could affect affordability and quality of hospital care in the greater Haarlem area.

The Dutch Healthcare Authority (NZa) has issued an opinion regarding this case. It has pointed out potential drawbacks to this merger, including higher prices for hospital care.

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 an event, the NMa can set conditions to the proposed merger, or block the merger altogether.