Bundeskartellamt clears merger of hospitals in Flensburg

The Bundeskartellamt has cleared the planned concentration of St. Franziskus-Hospital operated by the Malteser group in Flensburg and the somatic division of Diakonissenkrankenhaus, Flensburg, under joint management. Both facilities are to be replaced by a new building in the city of Flensburg.

Andreas Mundt, President of the Bundeskartellamt: “Both hospitals clearly hold a leading market position in the region in Northern Schleswig-Holstein and have high market shares. They are the only hospitals in Flensburg. We have therefore examined the merger project in great detail. The merger will, however, not significantly restrict competition or the alternative options available to patients. Both clinics have worked together for many years and they largely specialise in different medical fields. A survey of the physicians established in the area has shown that mainly the hospitals of other operators located outside Flensburg would be an alternative for patients. Competition between the two hospitals is therefore not expected to be impaired.”

St. Franziskus-Hospital, which is run by the Catholic Malteser group, is a specialised care hospital with approximately 340 beds. The group also runs a medical care cen-tre in Flensburg. Diakonissenkrankenhaus is owned by the Lutheran deaconess house in Flensburg (Ev.-luth. Diakonissenanstalt zu Flensburg) and as a specialised care hospital has approximately 500 beds. The two hospitals have worked together for many years and by establishing the medical clinic association Medizinischer Klinik-Verbund Flensburg they have widely divided medical work since 2006. The deaconess house also operates several medical care centres, holds a majority interest in Margarethen-Klinik in Kappeln with 17 beds and together with St.-Franziskus-Hospital runs an ecumenical centre for hospice work and palliative care in Flensburg, Katharinen Hospiz am Park.

The planned merger particularly concerns patients living in the regional market area “Grenzland Schleswig-Holstein”, the border area in Schleswig-Holstein south of the Danish boarder covering the mainland between the North Sea and the Baltic Sea, including the North Sea islands Amrum and Föhr. In this area, the two clinics in Flensburg are by far the leading hospitals with very high market shares.

Based on the investigations it can be expected that the patients from the relevant market area will, after appropriate consultation provided by medical doctors estab-lished in the region, primarily turn to hospitals run by other operators for inpatient treatment if services and their quality deteriorate. According to the information provided by the physicians established in the region, patients seeking treatment elsewhere cannot be taken in by one of the other hospitals run by the operator; most of these patients will be lost. The main competitors of the parties involved are the hospitals belonging to Klinikum Nordfriesland in Niebüll and in Wyk/Föhr, Helios Klinik Schleswig and imland Klinik in Eckernförde. These hospitals have sufficient free capacities to take in patients who no longer wish to be treated at Diakonissenkrankenhaus or St. Franziskus-Hospital. In this way, continued quality competition between the hospitals in the region is ensured.

Background– Merger control in the hospital sector:

Irrespective of their operators, hospitals are independently active as entrepreneurs and compete with one another. Due to strict legal provisions there is almost no price competition in this sector. It is therefore the main objective of merger control to maintain competition in the quality of healthcare for patients. It is crucial to ensure that patients have sufficient local options to choose from.
In spite of the growing concentration in the hospital sector only very few mergers had to be prohibited by the Bundeskartellamt in recent years. Of the altogether 325 transactions notified between 2003 and July 2020 only seven were prohibited. Eight merger projects were not notified after they had been critically assessed following an informal advance enquiry.