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Cape Town - Mediclinic Southern Africa has suffered a blow after the Competition Commission said a proposed merger with Matlosana Medical Health Services (MMHS) should be halted.
It wants the Competition Tribunal to block the planned large merger, arguing that it will stifle competition and likely result in a hike in hospital prices.
"Mediclinic plans to take the recommendation of the Competition Commission on appeal," a spokesperson told Fin24.
Mediclinic’s acquisition of MMHS relates to its Potchefstroom hospital, located in an area close to Klerksdorp.
MMHS owns and manages Wilmed and Sunningdale hospitals in Klerksdorp. While these two hospitals are both multi-disciplinary hospitals, Wilmed is more specialist-orientated and Sunningdale is more general practitioner-orientated.
MMHS also owns and operates psychiatric hospital Parkmed and operates training facility Caerus Nursing School in Klerksdorp.
“The proposed merger is likely to substantially prevent or lessen competition in the market for the provision of private healthcare services in Klerksdorp and the surrounding areas,” the Competition Commission said in a statement on Thursday.
“Further, the merger is likely to result in the merging parties unilaterally increasing hospital prices in the Klerksdorp and surrounding areas.”
It said hospital tariffs for the MMHS hospitals would immediately increase if the hospital fee structure is changed to the Mediclinic fee models.
The Competition Commission added that there will also be significant price hikes for insured, regional scheme and private patients. “This would have a negative impact both at the national level for insured patients and at the regional level for private patients.”
It said the proposed merger will also reduce the number of competitors for inclusion in Designated Service Providers from 3 to 2.
There are also public interest concerns, said the Competition Commission, since the merger “significantly and negatively” affects a particular industrial region around Klerksdorp.
It pointed out that potential remedies to address the concerns are unsuitable.
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