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Hospital Mergers and the Incorporation of Non-Competition Concerns

DOI https://doi.org/10.21552/core/2018/4/6

Nicole Rosenboom


National competition authorities have assessed many hospital mergers over the years. During merger control proceedings, the authority determines the negative effects of the merger in the form of a potential price increase and decrease in the quality of care provided by the hospital. These assessments are difficult. Merger control can lead to heated debates and questions over whether the analysis is correct and considers all possible outcomes. To provide a full analysis of the effects of a hospital merger for all relevant actors (patients, the hospital itself, health insurers, the government, and hospital staff) the Social Cost and Benefit tool can be used. This framework is applied in other fields of economics, but it can be useful in cases that involve public interest and non-competition concerns. One could call the tool the Competition Cost and Benefit Analyses (CCBA) tool when it is adjusted for use in a merger case. This article demonstrates how the CCBA can be used and how the unique features of a national healthcare and health insurance system can be taken into account during its use. This article applies the framework to the Netherlands due to recent developments in that country and the call for more focus on public interests in merger control of Dutch hospitals.
Keywords: Merger Control, Hospitals, Price, Quality

Nicole Rosenboom, Senior Consultant, Oxera. This article is written in a personal capacity. The author thanks Prof Dr Barbara Baarsma and Koert van Buiren. For correspondence: <mailto:Nicole.Rosenboom@oxera.com>.

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