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21.09.2017 | KPMG Law Insights

Law of the health care industry – Hospitals in the area of conflict of different legal regulations

Hospitals in the area of conflict between different legal requirements

Hospitals are supposed to provide the best medical care for citizens, says social law. But without assuming a dominant position in the market, antitrust law demands. This leaves decision-makers on the hospital side sitting between two stools. And can do a lot wrong.

In early summer 2016, the German Federal Cartel Office contacted around 500 hospitals nationwide with an extensive questionnaire as part of a sector inquiry. The goal is to gain insight into the competitive framework. In addition to mergers, this specifically involves cooperations, the relevance of which under antitrust law has not yet been recognized by many players. The Federal Cartel Office intends to publish the results of the sector inquiry.

Social law ensures needs-based health care

In Germany, the provision of high-quality medical services (hospitals, contract physicians, providers of medical aids and remedies, etc.) to meet the needs of the population is governed by social legislation. Cooperation between hospitals is intended to benefit patients and is being promoted by politicians and authorities in many areas because it can improve the quality of medical care.

Antitrust law fights abuse of market power

What social law demands of hospital operators, antitrust law takes a critical view of, because a dominant market position is quickly achieved, especially in rural areas. The goal of antitrust law is to maintain functioning, unimpeded competition that is as diverse as possible. But it equally examines reciprocal specializations in service delivery or the development of new practices. Logistics, such as the purchase of goods and services, may also not be shared by two houses.

Sector inquiry assesses competitive framework

The competitive assessment also involves determining how hospitals seek to differentiate themselves from their competitors through their service offerings, quality management or specializations. The role of the various actors, such as medical staff, referring physicians, and emergency medical services, is also highlighted. Remuneration structures and the financial situation of hospitals are analyzed, as are the considerations that guide patients in their choice of hospital.

Conclusion

The Bundeskartellamt intends to use the sector inquiry to gain a better understanding of the hospital market and, if necessary, to adjust its decision-making practice in merger control proceedings and in the assessment of cooperations. The players concerned should therefore closely follow the announced report of the sector inquiry as well as the subsequent decision-making practice of the Federal Cartel Office.

However, even in the case of cooperation or merger projects, the antitrust component should be included in the considerations at an early stage in the run-up to the report. Those who do everything right according to the objectives of the social legislator can act unlawfully under antitrust law and risk fines and damage to their image. Legal advice is appropriate here.

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Contact

Dr. Gerrit Rixen

Partner
Head of Antitrust and Merger Control

Barbarossaplatz 1a
50674 Köln

tel: +49 221 2716891052
grixen@kpmg-law.com

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