COMMERCIAL: The first foundation trust merger to be cleared by the competition watchdog was passed after other NHS providers were found to be strong competitors in the local health economy.

This was the conclusion of the Competition and Markets Authority’s full report on its decision to approve plans by Frimley Park Hospital FT to acquire Heatherwood and Wexham Park Hospitals FT.

While this decision was announced in May, the full text of the decision was only released last month.

The report included an analysis of referral data from local GPs that found Heatherwood was only the fourth closest competitor on average across all specialties to Frimley Park.

The closest competitor was Royal Surrey County Hospital FT followed by Hampshire Hospitals FT, and Ashford and St Peter’s Hospitals Trust.

While Frimley Park was Heatherwood’s closest competitor for some specialties, the analysis identified a number of other NHS providers which also competed strongly.

The report also revealed that clinics operated by Frimley Park and Royal Berkshire FT had picked up work when an outpatient clinic operated by Heatherwood in the Bracknell and Ascot area experienced a 24 per cent drop in GP referrals over five years.

This drop suggested Heatherwood was no longer a strong competitor in the area, meaning the disappearance of the trust did not represent a serious threat to competition.

It also revealed that both FTs failed to convince the watchdog that Heatherwood would be placed in special administration if the merger was blocked.

Speaking to HSJ about the decision, Rona Bar-Isaac, a competition lawyer at Addleshaw Goddard, said the analysis had allowed the CMA to say “look these two don’t compete that closely, we’re prepared to clear it”.

Ms Bar-Isaac added: “While the CMA did not take [the failing trust] into account as a counterfactual, their frame of reference assumes that the trust would have continued.

“Where it does become relevant is where a trust is in difficulty. You… see that starting to be reflected in the referral patterns.”

Joanna Christoforou, senior associate at the law firm Ashurst, said merger partners hoping to convince the CMA that one of them was at risk of exiting the market faced a “high hurdle”.