Health Policy

18.10.13

Competition Commission blocks NHS merger

Plans to merge Royal Bournemouth and Christchurch Hospitals and Poole Hospital Trusts have been blocked by the Competition Commission (CC). 

The merger was referred to the Commission by the Office of Fair Trading (OFT) amid concerns that the move could reduce competition and thus choice for patients, leading to a decline in standards. It’s the first time the Competition Commission has intervened in the NHS, which normally rules on commercial companies and enterprises. 

Recent changes mean foundation trusts are now treated as ‘enterprises’ for competition law purposes. 

The trusts said it would make further savings more difficult, and critics said that the decision showed that market ideology was being prioritised above patient care, and that collaboration should be the way forward. 

Competition Commission chairman Roger Witcomb said: “We’ve been acutely aware of the pressures facing NHS hospitals. However, while the broad aims of the merger are desirable ones, there simply isn’t enough detail in the hospitals’ plans for us to conclude that any of the claimed benefits are likely to materialise. 

“As recent history in the sector shows, a merger isn’t automatically a good thing for patients and it is our job to examine any proposed merger carefully. The OFT, CC and Monitor will today publish a short document explaining how the three authorities review hospital mergers with the interests of patients as their primary concern, and we expect and hope that this will ensure that the process in future will be much shorter.” 

A joint statement from Monitor, the OFT and the Commission said: “Not all NHS hospital mergers will give rise to competition concerns” but added: “Sometimes a merger between competing hospitals may decrease the incentives on the hospitals to improve their services and therefore lead to worse services for patients.” 

In a statement, Royal Bournemouth and Christchurch Hospitals and Poole Hospital Trusts said: “The two trusts have worked extremely effectively together over the last two years and we will continue to explore areas where we can work in partnership. However, this will not be to the scale we had hoped. 

“It will be much more difficult to make further savings as individual organisations, but we now need to explore alternative options and work closely with our commissioners as we look to the future.” 

Chris Ham, chief executive of The King’s Fund, said the decision would have important implications for the NHS, as the CC could use competition law to block further plans for service change. 

“Regulators must act proportionately and expeditiously – in a tax-funded and cash-limited system, the time and costs involved in the regulatory process need to be weighed against the benefits it brings. Ministers were clear during the passage of the Health and Social Care Act that Monitor would act as the sector regulator for health and that the competition authorities were not expected to play a prominent role. 

“The Government must urgently clarify its approach to market regulation in healthcare in line with the assurances given during the passage of the Health and Social Act.” 

Shadow health secretary Andy Burnham said: “It's a sad day for the NHS when competition lawyers, and not doctors, are deciding what's best for patients.”

But a spokesman for the Department of Health said: “The review of mergers is a matter for the independent competition authorities. They must make their decisions in the best interests of patients.” 

Tell us what you think – have your say below, or email us directly at opinion@nationalhealthexecutive.com 

Image c. Lorraine and Keith Bowdler under a Creative Commons Attribution-Share Alike 2.0 Generic licence.

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