Lack of benefits for patients and commissioners scuppers hospitals merger

On Thursday the Competition Commission announced its final decision to block the merger of The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation Trust.

The Commission blocked the merger on the grounds that there were insufficient benefits for patients and commissioners to outweigh the significant lessening of competition (SLC) that would have resulted from the merger. The Commission concluded that: the benefits proposed by the parties were not [relevant customer benefits] within the meaning of the [Enterprise] Act... We therefore concluded that prohibiting the merger was the only effective remedy and that it was proportionate to the SLC. Under the Enterprise Act relevant customer benefits are benefits to customers of the merger parties that can only be realised by the merger. In other words FTs wanting to merge must demonstrate how the merger benefits patients and commissioners (the customers in this context) rather than just how the merger will benefit the trusts and that those benefits will and can only be realised by the merger.

The 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. Monitor advises the OFT on the likely benefits for patients and commissioners of proposed mergers. Although the OFT found that this merger would result in SLC it would not have had to refer the matter to the Commission if it and Monitor had been persuaded that the merger would have overall been beneficial for patients and commissioners.

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