Netcare. Picture: FINANCIAL MAIL
Netcare. Picture: FINANCIAL MAIL

The Competition Commission has red-flagged a merger deal between the private hospital group Netcare and Lakeview Hospital, arguing that it would either prevent or lessen competition.

In a statement prohibiting the transaction, the commission said on Friday that there was a horizontal overlap between the activities of the merging parties in the provision of multi-disciplinary private healthcare services in the Benoni area.

Lakeview’s services include obstetrics, gynaecology, paediatrics, dentistry, orthopaedics and dermatology.

The commission said it conducted a tariff analysis of the Netcare and Lakeview Hospitals, based on a sample of medical aid schemes, to determine which hospital had higher tariffs before the merger.

"The commission’s investigation found that hospital groups, such as Netcare, negotiate tariffs to be applicable in their hospitals on a national basis and Netcare would have a uniform pricing policy across all its hospitals in the country."

The competition watchdog thus found the tariffs at the Lakeview Hospital were likely to generally increase significantly across the various procedures assessed, once the Lakeview Hospital adopted the Netcare tariff schedule.

The commission also contended that the merger removed competition in the Benoni area as Lakeview Hospital was a better competitor against established players, such as Life Healthcare, in terms of tariffs.

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