At the end of last year, the Commission for Protection of Competition (“CPC/Commission”) issued another decision on the admissibility of a concentration of medical centers. The issue certainly has its peculiarities due to the nature of the goods and services they offer, namely those related to healthcare.
In assessing a concentration, the Commission’s consistent practice has been to assess the overlapping or related activities that the parties to the concentration (direct and indirect) carry out in certain geographic areas and the range of products/goods they produce or distribute or services they offer where the operation is expected to result in:
- ‘significant horizontal overlap’ where the combined market share of the participants in that market (product and geographic combination) is at least 15% ,
and/or are
- ‘significantly related’ markets where, in each of the relevant markets (in the case of vertical relationships, either as a seller or as a buyer), the market share of each participant (or the total market share of the participants) is at least 25%.
With regard to the concentration of medical centres, the CPC clarifies that medical centres in the country may be state, municipal and private in terms of ownership. All of them are equal, they conclude most oftenly a contract with the NHIF on equal terms. In terms of demand, patients throughout the country have the opportunity to freely choose the services of which health care facility.
All of them are equal, they enter into a contract with the NHIF on equal terms. In terms of demand, patients from all over the country have the opportunity to freely choose which healthcare facility to use, depending on their specific needs. All patients receive the same medical services from the different health facilities when they are insured or pay for the services they use according to each hospital’s price list when they are uninsured, subject to the same requirements. The relationship between the NHIF and health care facilities is governed by contracts, and both public and private health care facilities can receive payments from the NHIF only if they have signed a contract.
As regards the differentiation of product markets: the services provided in primary and specialised outpatient care are not interchangeable in terms of either demand or supply and therefore constitute two separate product markets. Primary care and specialised outpatient care (apart from being legally distinct) are essentially different types of medical care. Primary care is concerned with the examination and treatment of patients whose condition is not life-threatening, prophylaxis, and the referral of patients to a particular specialist. Specialist care, on the other hand, involves treating patients who need treatment in a specific area of medicine.
Regarding geographic markets: it is common practice for hospitals in the country to serve patients mainly from the region of the respective healthcare facility. At the same time, there are no restrictions on patient mobility and the market is open within the country. Any patient requiring treatment in a hospital can be hospitalised in any hospital in the country, regardless of its location and form of ownership. The CPC also accepts that competitive conditions are the same throughout the country and defines the market for specialised outpatient medical care as national. It should be noted that there are decisions of the Commission in which it takes a different approach and considering the applicant’s view, defines the relevant geographic market as regional (it concerns the city of Sofia).
In assessing the concentration and the effects it will have, the Commission shall take into account circumstances such as the structure of the relevant markets, actual and potential competition between undertakings, the position of the undertakings in the relevant markets before and after the concentration, the economic and financial strength of the parties to the concentration, the existence of buyer power and influence, possible alternatives for the choice of suppliers and customers, their access to supplies or markets, trends in supply and demand for the relevant
Each of the above indicators should be examined in detail and in specificity for the relevant geographic and product market in order to assess the effects of the proposed concentration and its permissibility. For specific assessments of the concentration of medical institutions and representation before the Commission, we are always at your disposal, my colleagues from Ilieva, Voutcheva & Co. and myself.
