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Mediclinic News : TRIBUNAL STOPS MEDICLINIC HOSPITAL MERGER IN THE NORTH WEST

Title

TRIBUNAL STOPS MEDICLINIC HOSPITAL MERGER IN THE NORTH WEST

Date

2019-01-31

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News Description

THE CITIZEN The Competition Tribunal has prohibited a merger between Mediclinic and Matlosana Medical Health Services in North West. In a statement, the Tribunal says the proposed merger should be prohibited on grounds that it would likely result in a significant increase in healthcare prices in the region. In addition, the Commission argued that the incentive to improve on non-price factors, such as patient experience and quality healthcare, would likely diminish after the merger. The Commission also argued that the acquisition would confer relatively greater bargaining power to Mediclinic vis-à-vis medical schemes. The merging parties denied that the proposed merger would have any negative effects on competition and argued that it would lead to a number of pro-competitive efficiencies. This included improved costs of procurement and increased clinical quality and patient experience at the target hospitals. In terms of the proposed merger, Mediclinic would have acquired a majority interest in MMHS that owns and operates two multi-disciplinary private hospitals, Wilmed Park and Sunningdale Hospitals, in Klerksdorp (the target hospitals). “Mediclinic, one of the largest hospital groups in South Africa, owns and operates, inter alia, Mediclinic Potchefstroom which is located about 50km from the target hospitals. Mediclinic Potchefstroom, Wilmed Park and Sunningdale all provide inpatient private hospital services in the Klerksdorp and Potchefstroom area,” the Tribunal noted. The Competition Commission was notified of the proposed merger in 2016. In June 2017, the Commission recommended to the Tribunal that the proposed merger should be prohibited on grounds that the joining together of Mediclinic Potchefstroom, Wilmed Park and Sunningdale hospitals would likely result in a significant increase in healthcare prices in the region. The Tribunal engaged extensively with the merging parties on whether a potential remedy could be found to address the Commission’s competition concerns. The proposed remedies were discussed with a number of medical schemes that gave valuable inputs to the Tribunal. “However, despite different proposed remedies put up by the merging parties over several months, no appropriate remedy was tendered that would cure the substantial lessening of competition that would arise as a result of the proposed transaction,” the Tribunal concludes.
Created at 2019/02/19 11:48 AM by Mediclinic
Last modified at 2019/02/19 11:48 AM by Mediclinic