OFT Clears London Pathology Reconfiguration

Last month this blog commented on the Competition Commission's blocking of the merger of The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation Trust on the grounds that there were not sufficient benefits for patients or commissioners.  The proposed merger had been referred to the Competition Commission by the Office of Fair Trading (OFT) under its new powers to regulate mergers involving FTs in the Health and Social Care Act.

Last week saw the announcement by the OFT that it would allow the proposed pathology joint venture between University College London Hospitals NHS Foundation Trust Royal Free London NHS Foundation Trust and The Doctors Laboratory Limited. Nelson Jung Director of Mergers at the OFT and the Decision Maker in this case said We understand that a number of pathology providers both in the public and private sector are forming joint ventures following the review of pathology services in the UK led by Lord Carter. We would expect this review to drive these providers to compete more strongly in future. Following this merger sufficient choice of providers would still be present to contribute to better quality care for patients and better value for money for taxpayers.

This case is interesting because it demonstrates that joint ventures involving FTs that are short of full mergers are also subject to merger control by the OFT. It also reinforces the OFT's message that competition between providers contributes to improved services and that merger parties must demonstrate real benefits for patients and commissioners that outweigh any lessening of competition between them

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