On 18 October 2023, the Belgian Competition Authority (BCA) issued a statement confirming its competence and adapting its analytical framework to the specificities of the sector.

Healthcare and competition law in Belgium

The application of competition law in the healthcare sector often leads to heated debates. Policymakers and healthcare institutions frequently voice concerns about subjecting healthcare to competition rules. This scepticism typically stems from the perception that healthcare fundamentally differs from other economic sectors. Hospitals, for instance, typically prioritise service over profit and provide essential services to the general public. Consequently, critics argue against extending free-market competition principles to the domain of healthcare.

However, the BCA holds a different perspective. As in previous years, the healthcare sector – and hospital mergers in particular – remains a priority for the authority in 2023. The BCA maintains that, even in a heavily regulated sector, competition can still play a role among hospitals offering healthcare services. The BCA considers that scrutiny is necessary to ensure that hospital mergers genuinely benefit patients and to ensure hospitals stay incentivised to provide affordable and qualitative care.

Loco-regional hospital networks

This debate had already flared up a couple of years ago. In July 2020, the BCA confirmed that operations creating so-called loco-regional hospital networks[1] are subject to merger control rules and must obtain prior approval before they can be implemented. In response, the Belgian legislator amended the Hospitals Act in March 2021 to exempt loco-regional hospital networks from the obligation to notify the BCA.

The legislator argued that these networks have been established with the overarching goal of preserving the long-term quality, accessibility, and affordability of healthcare. Parliament further considered that the creation of hospital networks benefits the public interest and is geared towards optimising the alignment of healthcare supply with demand. Accordingly, the establishment of loco-regional networks safeguards patient choice and upholds the therapeutic autonomy of physicians. From a practical point of view, the legislator also considered the BCA’s control as a bar to the efficient implementation of hospital reforms. 

It is important to clarify that the Belgian legislation has not altered any obligations in other jurisdictions. For example, if a transaction establishing a loco-regional hospital network surpasses the thresholds for EU merger control, it may still require notification to the European Commission. Similarly, transactions that do not involve the formation or modification of loco-regional hospital networks, such as standard mergers between hospitals or acquisitions of hospitals, are still subject to the Belgian merger control regulations.

The BCA’s new analytical framework

In response to a surge of concentrations in the hospital sector, the BCA reaffirmed its jurisdiction over hospital concentrations in a statement on 18 October 2023. In this statement, the BCA also offers practical guidance regarding the tenets driving its investigations, and outlines the key questions it intends to address:

1. Types of care and scope: What are the types of care provided by the hospitals involved, and what is the extent of the services? This includes an evaluation of factors such as the number of hospitalisations, consultations, beds, staff, and revenues.
2. Patient origin: Where do the patients of each hospital/facility come from, and what other hospitals and care providers are present in the relevant care area? 
3. Performance indicators: What are the key performance indicators for the notifying hospitals, and how will the merger affect these indicators? This includes factors like bed occupancy, length of stay, turnaround times, incidents, and patient satisfaction.
4. Motives for concentration: What are the drivers behind the merger, and how will it improve or maintain the range and quality of care services offered? This involves assessing volume effects, expertise, equipment, personnel, and organisational changes.
5. Financial impact: Will the merger lead to increased revenues and reduced operating costs (including procurement, equipment, resources, and other financial aspects)?
6. Staff recruitment: Will the merger facilitate the recruitment of medical and paramedical staff and affect the organisation of care delivery?
7. Organisational impact: Will the merger lead to changes in the organisation of sites, care units or beds, and if so, to what extent?
8. Risk of increased rates or charges: Does the merger pose a risk of increased unregulated rates or charges for services such as single rooms, fee surcharges, specific treatments or ancillary services?
9. Delay in patient care: Is there a risk of delays in patient consultation or hospitalisation times, as well as increased travel times for patients in the relevant care area?
10. Employment conditions: Does the transaction carry the risk of worsening employment conditions for medical and paramedical staff (e.g., lack of employer alternatives or increased fee retrocession rates)?

While the BCA assures the consistent application of this methodology, it cautions that each transaction will be evaluated individually based on its specific circumstances. The extent of the BCA's scrutiny will vary depending on the particularities of each case. 

Nevertheless, the practical guidance outlined in the statement will prove especially valuable for hospitals seeking to assess the merger control risks associated with a proposed acquisition or merger.

We also see this development as part of the BCA’s ongoing efforts to professionalise its services. Previously, the BCA had already announced that it established a dedicated department for merger control. The BCA anticipates that this internal specialisation will lead to more efficient case management, promote the growth of knowledge and expertise, and enable more precise and robust interventions.

For more information, please contact Baptist Vleeshouwers or Jonathan Sake

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[1] A loco-regional hospital network is defined as a “legally sanctioned, long-term collaboration with legal personality (…) involving a minimum of two non-psychiatric hospitals (…) separately authorised upon the establishment of the local-regional clinical hospital network and which are situated in a contiguous geographical area and provide local-regional healthcare services in a rational and complementary manner.”