In 2016, the District Court of Rotterdam decided in favour of the Dutch Authority of Consumers and Markets (“ACM”) regarding its prohibition of a hospital merger in Dordrecht. The hospitals decided not to appeal the judgment, thus putting an end to the merger. However, this did not fully satisfy Edith Schippers, minister of health. She recently announced her plans to invest EUR 2.5 million in supervision of the healthcare and pressed ACM to further intensify its assessment of mergers in the healthcare sector. Healthcare and its supervision will also be on the political agenda in the impending elections and formation of a new government. We see three trends emerging in 2017.
Mergers in the healthcare sector: again double work in 2017
Minister Schippers did not succeed in transferring the assessment of healthcare mergers from the Dutch Healthcare Authority (“NZa”) to ACM which she had hoped would commence in 2017. In 2017, if the relevant thresholds are met, healthcare mergers must still be approved first by the NZa and then by ACM. This will change in 2018 at the earliest, if the legislative proposal regarding the transfer of responsibilities from the NZa to ACM is passed into law in 2017. Although this appears to provide the prospect of a possible parallel assessment by ACM, it will not solve the problem. The thresholds provided in the legislative proposal for the assessment of healthcare mergers are still too low and continue to create double work (see also here). It would be better not to transfer the assessment of healthcare mergers, but rather to abolish them immediately. Although the NZa was expected to have to assess about 25 healthcare mergers a year, it actually has to assess at least four times that number due to the extremely low thresholds. Abolishing the assessment would enable the NZa to devote more attention to other responsibilities, such as supervising the duty to provide care and enforcing the Rules on Transparency of the Healthcare Purchasing Process under the Healthcare Insurance Act (Regeling Transparantie zorginkoopproces Zvw) (the “Healthcare Purchasing Rules”).
In 2017, when assessing healthcare mergers ACM will once again attach considerable importance to opinions of healthcare insurers. ACM’s prohibition of the Dordrecht hospital merger shows where this can lead to. On 29 September 2016, the District Court of Rotterdam upheld ACM’s prohibition of the merger between the Albert Schweitzer Hospital and the Rivas Zorggroep. In that case, the healthcare insurers’ pessimism about their ability to discipline the hospitals concerned following their merger, persuaded ACM to impose the merger prohibition. At the same time, on 22 November 2016, ACM approved the merger between Waterland Hospital and Westfries Gasthuis Hospital, partly because the healthcare insurers saw no reason for prohibition. The same reasoning applied to the merger between Queen Beatrix Regional Hospital and Slingeland Hospital, which ACM approved on 6 December 2016. Any prospective analysis that ACM is supposed to make when assessing a healthcare merger must in all cases include an investigation into whether the assertions of the healthcare insurers on the extent to which they will be able to discipline the merging healthcare providers are correct. ACM should hereby take into account that it recently determined that high capital requirements constitute an obstacle to enter the market in which healthcare insurers operate. This and the fact that, as in previous years, 2016 saw relatively few consumers switching from one healthcare insurer to another means that the insurers will in any case retain their purchasing power in their own particular focus areas in 2017.
Sale of healthcare: healthcare insurers have been warned
The Healthcare Purchasing Rules, which guarantee transparency in purchasing healthcare, have been in force since 2016. They include mandatory rules for healthcare insurers with regard to the purchase of all healthcare funded under the Healthcare Insurance Act. Healthcare insurers are required to publish their purchasing policy (including minimum requirements and a timeline for the contracting process) by 1 April 2017. Afterwards, they will only be able to amend their purchasing policy if they do so in a timely manner and if they provide sufficient reasons. In its explanation of the Healthcare Purchasing Rules, the NZa emphasised that this only applies to amendments prompted by external circumstances. Insurers must also allow a reasonable period for assessing a contract and they must be available to answer questions from healthcare providers. See here for more information. In mid-2016, the NZa assessed the start of the contracting process for 2017. Although the published purchasing documents did not fully accord with the Healthcare Purchasing Rules, the NZa decided not to impose any penalties on the insurers concerned. In October 2016, the NZa issued five decisions stating that Menzis had breached the Healthcare Purchasing Rules but, once again, it did not impose any penalties because Menzis had amended its procedures. The NZa will not be likely to continue to refrain from imposing penalties if healthcare insurers breach the Healthcare Purchasing Rules in 2017. Fact is that the Healthcare Purchasing Rules are no longer new, and a transparent healthcare purchasing process is important to the proper functioning of the healthcare system. In 2017, healthcare providers will have recourse not only to the NZa but also to the Independent Authority for the Resolution and Settlement of Disputes in Healthcare Contracting. This authority was established in mid-2016 for the settlement of disputes between healthcare providers and healthcare insurers with regard to the purchase of healthcare under the Healthcare Insurance Act. On 1 April 2017, this will be supplemented by the Long-Term Healthcare Act. See here for 12 tips on how to take full advantage of your healthcare purchasing rights in 2017.
More intensive supervision
A notable development was the rigorous way in which the Ministry of Health, Welfare and Sport instructed ACM to assess healthcare mergers more strictly. Minister Schippers not only pronounced her disapproval of “the trend towards economies of scale” among hospitals, mental health institutions and home care organisations, but she also asked ACM to put forward policy proposals to halt this trend. ACM subsequently carried out a number of measures, including an investigation into the definition of the relevant product markets and the publication of a report alleging that hospital mergers do not provide any benefits for patients. In any case, it is striking how little attention is being paid to the supervision (or increased supervision) of healthcare insurers by ACM and the NZa, even though ACM’s investigations in this regard reveal chronic problems regarding increased effectiveness of the current healthcare system for patients. As yet there has not been a follow-up to ACM’s announcement, made in February 2016, that it was going to issue recommendations in 2016 to improve competition between healthcare insurers. Minister Schippers recently stated that reports of studies to be published by ACM in that regard will not be available before the second half of 2017 (ACM had planned to publish them at the end of 2016). The additional funds that Minister Schippers is to make available for healthcare supervision will hopefully also be spent in this area, thus finally establishing a better balance in the supervision of healthcare.
Visit invalacm.nl for any information you require about dawn raids by ACM and the European Commission.