CMA clears Birmingham hospitals merger

The Competition and Markets Authority (CMA) has cleared the merger between two Birmingham hospital trusts after finding that it will probably benefit patients in the local area.

The CMA found that, whilst the merger between Heart of England NHS Foundation Trust (HEFT) and University Hospitals Birmingham NHS Foundation Trust (UHB) could give rise to competition concerns across a number of elective specialities, these were outweighed by the substantial improvements to patient care that were expected to arise.

In reaching this view, the CMA has placed significant weight on the advice on probable benefits from NHS Improvement, the sector regulator, which strongly supports the merger.

NHS Improvement advised the CMA that HEFT had experienced sustained difficulties in governance, quality of care and finances since 2012, which succeeding management teams had been unable to address.

It also advised that the appointment of the UHB management to HEFT’s executive team in 2015 has already given rise to a number of benefits such as reduced waiting times and improvements in the quality and safety of patient care - however, these improvements an a number of other longer-term benefits would disappear without the merger and the continued presence of the UHB management at HEFT.

The CMA found that HEFT would be a weak competitor to UHB without the merger and that both parties were experiencing capacity constraints.

The CMA compared this to the wide-ranging nature of the benefits identified by the hospitals and NHS Improvement, which would benefit most patients at HEFT.

The CMA found from the evidence that the benefits put forward by the hospital trusts outweighed the CMA’s potential competition concerns. The merger will therefore not be referred for an in-depth investigation.

Kate Collyer, deputy chief economic adviser and the decision maker in this case, said: “We have found this merger will have substantial benefits to the healthcare of patients in the Birmingham and Solihull local area.

“This is the first time the CMA has cleared an NHS hospital merger on the basis of patient benefits at phase 1 and reflects the quality of the benefits case put forward in this instance and the consistent and detailed advice of NHS Improvement.

“The hospitals involved presented clear evidence and a well reasoned case.

“Competition currently plays a limited role in the NHS, as health commissioners and regulators have instead emphasised co-operative working to handle growing demand for NHS services.

“However, given the scale of the potential impact on patients in Birmingham and Solihull, it was appropriate for the CMA to examine this transaction to determine whether any loss of choice or competition would be outweighed by improvements undertaken by the parties and overseen by NHS Improvement.”