Tribunal blocked Mediclinic merger over higher rates

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The Competition Tribunal revealed that part of its reasons for deciding to block Mediclinic’s takeover of Matlosana Medical Health Services (MMHS) because of up to 76% higher rates than the hospitals it wanted to acquire.

The cost for a natural birth at a Mediclinic facility – one of the country’s three large private hospital groups – is 76% higher than at two independent hospitals that are part of the National Hospital Network (NHN). And for Caesarean sections, it costs 26% more than at the Wilmed Park and Sunningdale hospitals, both in Klerksdorp.

City Press reports that this is what the Competition Tribunal revealed last week as part of its reasons for deciding to block Mediclinic’s takeover of Matlosana Medical Health Services (MMHS), which owns the two hospitals in Klerksdorp. Both are award-winning hospitals that serve a large part of the North West and the northern Free State.

In Potchefstroom there is a Mediclinic hospital that does not offer anywhere near as many of the facilities and services as the hospitals in Klerksdorp do. The report says had the transaction gone through, Mediclinic would have controlled 63% of the market in the area. Mediclinic’s listed prices would simply have been too expensive for residents in Klerksdorp to allow for the proposed acquisition, the tribunal found.

The report says most of the numbers in the tribunal’s report were blocked from public view. But the many medical aid funds which objected to the deal reveal that the rates paid by the various groups differ widely.

The tribunal also heard that Mediclinic had previously tried to abuse its position in geographical areas where it did not have competition and force medical aid funds to use more of the group’s hospital services in areas where there was competition.
MediClinic will appeal the tribunal’s decision.

The report says the case is expected to be heard in the Competition Appeal Court in October.

City Press report

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