After a summer with various interesting developments, very interesting developments are expected this autumn in the field of market supervision in the healthcare sector. For instance, the Regulations regarding Transparency in Healthcare Procurement under the Healthcare Insurance Act of the Dutch Healthcare Authority (“NZa”) will be put to the test for the first time. The Netherlands Authority for Consumers & Markets (“ACM”) will also be presenting recommendations this autumn to promote competition between healthcare insurers. The Lower House of Dutch Parliament is furthermore addressing the legislative proposal regarding the transfer to the ACM of healthcare merger review and other tasks of NZa. In sum, many developments are currently in the pipeline. The main ones are addressed below.
Transfer of tasks from NZa to ACM
In mid-April 2016 the legislative proposal regarding the transfer of tasks from NZa to ACM was presented to the Lower House of the Dutch Parliament. The proposal pertains to the transfer of healthcare merger review and the Significant Market Power instrument (the “SMP Instrument”) from NZa to ACM as from 1 January 2017. We previously explained why this legislative proposal is a missed opportunity. In our opinion it would be preferable immediately to abolish healthcare merger review rather than transfer it while making only minor changes. On the other hand the legislative proposal provides for new SMP measures that can be imposed only on healthcare providers, not also on healthcare insurers. The SMP Instrument will therefore offer no added value for healthcare providers, despite the need for it and despite ACM earlier this year criticising the functioning of the markets on which the healthcare insurers operate. Although it is apparent from the exploratory investigation by the Standing Committee on Health, Welfare and Sports that the legislative proposal can rely on a majority in parliament, it may nevertheless be amended and may not yet be enacted by 1 January 2017.
Duty of care
It is also remarkable that, while healthcare merger review and the SMP instrument are being transferred to ACM, NZa will remain in charge of supervising the duty of care. That gives rise to the question whether the proposed clustering of knowledge and powers will be achieved. In light of the relationship between the enforcement of the duty of care and the SMP Instrument (such as the imposition of a contracting obligation), that remains to be seen (see also this blog). The duty of care entitles an insured in relation to his insurer to healthcare or the other services that he requires and to reimbursement of the costs involved. The duty of care is a cornerstone of the current healthcare system and its enforcement by NZa is an essential component of a properly functioning system. Minister Schippers regards the enforcement of the duty of care by NZa as a policy area. Although no enforcement has taken place to date, NZa drew attention to the importance of the duty of care several times earlier this year (see here and here). Particularly if, for cost control reasons, health insurers increasingly focus on selective healthcare procurement or broadening of the prevention policy, effective enforcement of the duty of care by NZa will become increasingly important. Although the duty of care principally applies to the relationship between the insured and the insurer, the Supreme Court confirmed at the end of last year that healthcare providers may also rely on it. More information on that development can be found in this blog.
The current review of healthcare mergers by ACM also took centre stage this past summer. In July 2016 Minister Schippers wrote to the Dutch Lower House that economies of scale may not lead to less freedom of choice for patients. She therefore requested ACM to draw up policy plans to avoid major concentrations of power. ACM has stated that it is already developing new methods to better review healthcare mergers. ACM is not alone in doing so; the German competition authority is doing the same. Be that as it may, the current supervision framework under the Competition Act does not allow ACM with regard to healthcare merger to suddenly switch from a “yes, unless” to a “no, unless” system. More information on this subject and on the consequences of the legislative proposal regarding the transfer of tasks from NZa to ACM can be found in this article.
Another important development in the field of healthcare merger control is the case regarding the merger of two hospitals in the Dordrecht area. In 2015 ACM prohibited the concentration between the Albert Schweitzer Hospital and Rivas Zorggroep. On 29 September the Rotterdam Court upheld the prohibition. The hospitals can now file for appeal at the highest administrative court. This court previously quashed ACM’s decision to prohibit a merger of rusk producers. That judgment has set the bar high for ACM to prohibit a merger. More information on this subject can be found in this blog, this blog and this article.
Cooperation between healthcare providers
If hospitals wish to collaborate rather than merge, ACM recently came up with a list of topics in addition to its Guideline for assessing mergers and collaborations in hospital care, for carrying out and substantiating a self-assessment. By carrying out a self-assessment, hospitals can test their collaboration plans against the cartel prohibition. The guideline can also be used to assess collaborations of other, competing healthcare providers.
Supervision of healthcare contracting
The moment of truth for healthcare procurement in 2017 is at hand this autumn. NZa’s Regulations regarding Transparency in Healthcare Procurement under the Healthcare Act (“Healthcare Procurement Regulations”) have been in force since the start of 2016. Those regulations set out mandatory rules on timely and substantiated notification of any changes that healthcare insurers wish to make in their healthcare procurement policy after 1 April 2016. Because healthcare insurers have opted, as in the past, to publish an outline procurement policy on 1 April 2016, the Regulations may regularly be relied on. Obviously, the Regulations are of added value only if NZa enforces them. Before the summer holiday NZa looked back on the compliance with the Regulations by healthcare insurers and concluded that not all of them complied with the Regulations. NZa called on healthcare providers to report violations using NZa’s complaints form. More information can be found in this blog.
The Independent Healthcare Contracting Dispute Settlement Authority has been operational since June 2016. That Authority has yet to prove its added value. NZa will pay special attention to hospital contracting this year. That contracting was not finalised until the end of 2015 and healthcare insurers have accused hospitals of concerted practices. NZa will now take stock of the problem areas using questionnaires distributed to hospitals and insurers. It will publish the outcome of its investigation at the end of this year. ACM has also taken action in the field of healthcare procurement. It has drawn up Guidelines for the collective procurement of prescription drugs. ACM has also published a Monitor of its Principles of ACM’s first-line healthcare supervision. Those principles have yet to prove their worth, since they have not yet been in place for an entire contracting round. ACM stated in the Monitor that it would be: “closely following the contract negotiations between first-line healthcare providers and healthcare insurers in the coming period. ACM is willing to explain the room for manoeuvre and the rules from a competition perspective at the negotiation table”. More information and tips can be found at www.zorgcontractering.com.
ACM’s investigation of competition among healthcare insurers
In February 2016 ACM concluded in an interim report that there was room for improvement in the competition between healthcare insurers. ACM expects to publish its final report on this subject at the end of 2016. It has announced that the report will set out specific recommendations for improvement of the competition between healthcare insurers. The outcome of ACM’s investigation is very important. Sufficient competition between healthcare insurers is essential to ensure that the procurement power of the healthcare insurers actually benefits consumers. ACM has previously attempted in vain by means of campaigns to stimulate consumers to switch to a competing insurer. It will therefore be interesting to see what recommendations the ACM will make in its final report. NZa is meanwhile monitoring whether healthcare insurers are adequately informing their customers.