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Hospital merger would ‘reduce commissioner value for money’


17 October 2013

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Two hospitals aiming to merge have failed to prove it would benefit patients, the Competition Commission (CC) has reported. 

Two hospitals aiming to merge have failed to prove it would benefit patients, the Competition Commission (CC) has reported. 

In the final report following a ten-month process, the CC banned the move and said the hospitals would in fact “damage patient interests” by merging. 
When the Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation trust first suggested the merger in January, they said it would: 
 – Allow them to reconfigure A&E
 – Build a new maternity hospital
 – Set up a ‘hub and spoke’ arrangement for specialised haematology services
 – And to provide better consultant cover in cardiology at Poole. 
But the CC, taking in advice from health sector regulator Monitor, the Office of Fair Trading (OFT) and local commissioners said there had been “insufficient analysis” of the proposals by the two hospitals. 
Roger Witcomb, chairman of the Inquiry Group and CC chairman said: “While the broad aims of the merger are desirable ones, there simply isn’t enough detail in the hospitals’ plans for us to conclude that any of the claimed benefits are likely to materialise.
“As recent history in the sector shows, a merger isn’t automatically a good thing for patients and it is our job to examine any proposed merger carefully.” 
This is the first merger between two NHS foundation trusts to be examined by the CC and it follows the enactment of the Health and Social Care Act 2012, which confirmed the OFT’s and CC’s roles in assessing the competition aspects of mergers involving foundation trusts.
The preliminary report released by the CC said that the merger was likely to lead to “reduced competition” for the services that clinical commissioning groups (CCGs) might want to change or reconfigure. 
The report, released in July states: “The merger could lead to worse outcomes because there would be fewer bidders, which may be reflected in commissioners receiving reduced value for money, including lower quality or, if prices are not set at national rates, higher prices. 
“Suppliers on existing contracts might provide lower-quality services, knowing that commissioners had fewer options to replace them post-merger than in the counterfactual.” 
The full report is available on the Competition Commission website

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