Royal Bournemouth and Poole Merger – Key Facts

CC’s decision to block Royal Bournemouth/Poole merger

The Competition Commission (CC) has confirmed its July provisional findings[1] that the merger of Royal Bournemouth and Christchurch Hospitals and Poole Hospital NHS Foundation Trusts should not be allowed to go ahead[2]. The CC found a substantial lessening of competition (SLC) between the Trusts in a large number of services, which would reduce the incentive on both to maintain and improve the quality of clinical services.

What are the key points?

–  The Trusts’ proposals on patient benefits were lacking in detail and did not demonstrate that these benefits could be achieved in the near future.

–  There was no evidence that other benefits such as cost savings to commissioners were likely to arise as a result of the proposals.

– The Trusts’ proposed use of the ‘friends and family test’ to offset the SLC was not considered an effective remedy.

– The competition authorities emphasised the need for early engagement and timely provision of accurate and consistent information by merging parties.

 

In recognition of the importance of this first review of an NHS merger under the Enterprise Act 2002, the OFT, CC and Monitor have issued a Joint Statement on “ensuring that patients’ interests are at the heart of assessing public hospital mergers”. It reiterates the importance of patient and commissioner choice to incentivise providers to improve quality. It also highlights the role of the NHS TDA and Monitor in helping Foundation Trusts and NHS Trusts to develop strategies and to consider the effect of a transaction on competition.

 

From a practical viewpoint, in due course Monitor will be issuing guidance on patient benefits; the OFT’s publication on NHS mergers will be revised; Monitor and the OFT will publish a Memorandum of Understanding about Monitor’s role in advising on relevant patient benefits in statutory mergers; and current guidance on mergers is being reviewed to assist in assessing the impact of hospital mergers on competition. These publications are eagerly awaited by the NHS community.

 

If you would like any detail on this or other competition-related matters, please contact either Lindsay Draffan or Victoria Yuan.