The two providers involved in the first merger of two foundation trusts could be prevented from freely communicating with each other while the Competition Commission reviews the case, HSJ has learned.
The merger between Royal Bournemouth and Christchurch Hospitals and Poole Hospital foundation trusts was referred to the commission by the Office of Fair Trading in January this year.
HSJ understands the commission has asked the trusts to sign undertakings committing not to hold discussions without the presence of independent observers while the review, due to complete in June, takes place.
Independent observers, known as a monitoring trustee or hold-separate manager, must be approved by the commission but would be funded by the parties. HSJ understands the trusts estimate the cost of this would run into hundreds of thousands of pounds. They believe it would make it difficult for discussions about service improvements and cost improvement plans to take place.
Commission guidelines on mergers say while it is normal to seek undertakings in cases where the deal has completed before it is referred, it is not routine in “anticipated” merger cases, such as Royal Bournemouth and Poole.
One competition lawyer told HSJ: “The CC doesn’t normally put a ‘hold-separate’ arrangement in place in those circumstances, because the businesses remain separate. It could be concerned about the potential for integration activity to take place even before the transaction has closed, which would be difficult to reverse.”
Following representations from the trusts the commission has agreed to look again at the terms of the undertakings. A spokeswoman for the commission said she could not comment on the nature of the undertakings while discussions were still ongoing.
HSJ understands there is growing concern amongst the trusts’ leaders about the OFT and Competition Commission’s approach to the merger and understanding of the NHS.
One example highlighted to HSJ was that, based on an analysis of healthcare resource groups, the OFT judged that the trusts compete in 17 service specialities, including ear nose and throat. However, Royal Bournemouth does not provide any surgical ENT procedures and its outpatient clinics are delivered by clinicians from Poole.
The trusts maintain they do not compete significantly in any of the 17 specialties but rather offer complementary services, sometimes focusing on different sub-specialties or sharing consultants.
Chief executive of the Foundation Trust Network Chris Hopson warned the regulators’ approach could present problems for other merger plans in the NHS.
He said: “Most people in the NHS were assuming that mergers between trusts was a key way of getting to the new sustainable kinds of delivery the NHS desperately needs.
“If the competition authorities are going to rule out that course of action the NHS faces a major set of problems.”