A plan to shake up hospital care in Hampshire has become the first merger of large acute trusts to pass a key test designed to enshrine competition in the NHS.

The Cooperation and Competition Panel, an advisory body to the Department of Health, gave a green light to the merger of Winchester and Eastleigh Healthcare Trust with Basingstoke and North Hampshire Foundation Trust.

The panel said the merger did not violate article 10 of the principles and rules of cooperation and competition, which orders that after any merger “there remains sufficient choice and competition”.

However, the two organisations must now go through a Monitor assessment – which has already begun and is expected to last three months – before the DH makes a final decision.

The panel’s assessment identified seven other potential providers of routine elective care nearby: the Royal Surrey, Royal Bournemouth, Royal Berkshire, Salisbury, Southampton, Portsmouth and Frimley Park. It said: “Within 30-40 minutes of each site operated by the merger parties offering inpatient elective care there are at least three alternative providers.”

It added: “With respect to outpatient care, we concluded that sufficient choice and competition would remain after the proposed merger. While Winchester and Eastleigh and Basingstoke and North Hampshire both provide outpatient elective care in the Hampshire region, the proposed merger is unlikely to impact materially on choice and competition in these services because the Basingstoke site would not gain significantly from patients switching away from Andover [part of the Winchester trust].”

Winchester, which has a turnover of £146m, and Basingstoke and North Hampshire, which has a turnover of £158m, both plan to maintain A&E and consultant-led maternity services.

Jocelyn Ormond, a partner at law firm Beachcroft, told HSJ: “The 30-40 minute drive time referred to by the CCP has become a standard metric for assessing the competition impact of a healthcare transaction. The approach does mean hospital mergers in large metropolitan areas are more likely to get the green light than those in more sparsely served rural areas.”

The panel is currently assessing two other acute mergers.

The deadline for a decision on the merger of Oxford Radcliffe and Nuffield Orthopaedic Centre has been extended indefinitely by the panel to allow for consideration of whether combining the organisations would unduly restrict patient choice.

Martin Munro, a partner at KPMG, said the issues around merger in London, where many of the CCP’s upcoming cases come from, were different.

“People are spoiled for choice compared to many parts of the country but a number of mergers in London involve very large trusts. They are significant organisations in their own right and often have fiercely independent cultures. Integrating will require strong leadership and buy-in from clinicians.”

The CCP’s assessment of the merger of Barts, Whipps Cross and Newham hospitals is looking at whether the combined organisation would deny choice by referring patients on to its own specialist services.