Bundeskartellamt prohibits merger between hospitals in Esslingen

The Bundeskartellamt has prohibited plans of the administrative district of Esslingen and the town of Esslingen to merge the Esslingen district clinics (Kreiskliniken Esslingen) with the Esslingen clinical centre (Klinikum Esslingen). In the Bundeskartellamt's view, the merger would lead to a substantial restriction of competition on the hospital markets of Esslingen and Kirchheim/Nürtingen.

Andreas Mundt, President of the Bundeskartellamt: "The merger would eliminate the competitive pressure in the region. According to our findings, other hospitals which are located further away, for example in Stuttgart or Tübingen, hardly qualify as an alternative for patients. Because the hospital sector is subject to specific state regulation and there is only little price competition, it is particularly important to make sure that patients still have a number of hospitals to choose from. This ensures that quality competition between the hospitals is preserved."

Klinikum Esslingen is the largest hospital in the administrative district of Esslingen. It is located in the district town Esslingen am Neckar and has 625 regular beds in seven specialised departments and centres. The Esslingen district clinics operate three hospitals in the administrative district for the treatment of somatic illnesses. Together the district clinics have 1,174 beds and operate seven regular departments as well as two medical care centres and further specialised centres.

In 2012 the district clinics were faced with a difficult financial situation in the course of which they took several measures to improve their standing in the market, in particular vis-à-vis their competitor Klinikum Esslingen. Already in 2013 they were able to generate a positive operational result. Operator of the clinics is the administrative district of Esslingen, which also owns the district savings bank Kreissparkasse Esslingen-Nürtlingen. With a business volume of more than 8 billion Euros the Kreissparkasse is one of the major savings banks in Germany.

The merger would lead to competition restraints in the market for acute hospitals in the regions of Esslingen and Kirchheim/Nürtingen in which there no alternative acute hospitals. With the merger of the two leading and closest competitors, a dominant hospital operator would emerge in the region. The parties to the merger would no longer be subject to any pressure to follow suit on improvements in performance and quality of the other party.

The parties did not put forward any arguments that the merger would create advantages which could not be achieved to a similar extent by less anticompetitive measures. On the contrary, the town and district of Esslingen were firmly set on merging their hospitals and rejected any alternatives to this plan, such as the participation of other hospital operators.