Britain’s competition watchdog has said that a merger between the country’s largest private hospital group and a smaller rival does not present concerns – on a national level at least.
But it expressed concerns about the potential impact the deal could have in two parts of the country.
The Competition & Markets Authority (CMA) said the merger between BMI Healthcare and Circle – which both provide elective hospital care to both privately-funded and NHS patients – gives it no cause for concern apart from the impact it might have on patients in Bath and Birmingham.
BMI manages 52 private hospitals and clinics in the UK, while Circle currently operates two private hospitals in Bath and Reading and is planning to open a third hospital in Birmingham this year.
The CMA said that in its initial Phase 1 investigation, it found that the merger could result in a “substantial reduction” in competition between private healthcare services in Bath and Birmingham.
Circle and BMI do, or will, compete closely in these cities and there are limited other competitors available for patients.
The watchdog said it is concerned that if the businesses were to merge, patients who pay for their own healthcare in Birmingham and Bath could face higher prices and that NHS and privately-funded patients could face a lower quality of service in those areas.
The CMA said that as part of its assessment, it took into account the impact of the coronavirus outbreak by considering not only the current provision of private healthcare but also how this is likely to impact the opening of new hospitals both by the merged company and their competitors.
Joel Bamford, CMA senior director, said: “If local concerns can be overcome, we will clear this merger.
“At the moment though, we have found that if it goes ahead as planned, competition will be reduced and it could negatively impact patients in Bath and Birmingham.
“We recognise that this is a difficult time, with private hospitals having effectively put their entire hospital capacity temporarily under the control of the NHS to deal with the coronavirus (COVID-19) outbreak.
“It remains important that we protect competition between private healthcare providers and the benefits it can bring to patients.”
The companies now have until Friday 17 April 2020 to address these concerns.
If they are unable to do so, the deal will be referred for an in-depth Phase 2 investigation.
More information is available at here.