Concerns were expressed on Thursday in a session of the Parliamentary Health Committee about the effects of the possible creation of an oligopoly or monopoly in the health sector, in the event of a mass takeover of private hospitals by a certain foreign investment fund, with the Committee's President, Efthymios Diplaros, calling the Competition Commission (Competition Protection Commission) to consider applications for such takeovers “in depth”.
Competition Protection Commission has already approved the acquisition of a private hospital in Nicosia by a specific fund and is considering a request for a takeover and secondly, from the same fund, also in the capital.
At the start of the debate, the Member of Parliament of AKEL, Giorgos Loukaidis, who is one of the rapporteurs of the Commission's ex officio examination of the matter, said that the occasion was information they have or are hearing about the possibility of a mass acquisition by a certain fund from abroad, number of private hospitals. He said that they want to know if this information is true, to the extent that it is true and how the relevant services and health professionals perceive what is developing and if there are risks.
Mr. Loukaidis said that their fears are that all the resources of the state, in terms of key sectors of the economy, will be concentrated “in foreign hands”, as happened with universities and banks.
He mentioned that he has a personal knowledge that there have been raids on hospitals with offers of up to €100 million.
Mr. Loukaidis said that their fears are the possibility of an overconcentration of beds in the hands of a private person, something that, as he said, may bring possible negative side effects. This will strengthen the bargaining power that an owner will have in his dealings with GeSY, he added. recoup their investment, possibly leading to a “serious degradation” of the medical care they will offer.
During the discussion, a representative of the Pancypriot Association of Private Hospitals (PASIN), said that the association has no right to interfere with its members, in matters related to the rules of the free market. He said they agree that the presence of a monopoly will create problems for the smaller private hospitals, but expressed the opinion that he does not believe there will be a monopoly since there are OKYPY hospitals.
He also said that foreign investors can they bring knowledge and experience that will benefit the health sector, but that the attention and intervention of the State is needed and that insurance valves are put in place.
The representative of the EPA, Maria Michael, informed the Commission that they have already approved the purchase from a foreign fund regarding the Apollonio hospital and that they have in front of them and are evaluating, a notification for the second acquisition of a private hospital that is contracted to the National Health Service in Nicosia, from the same fund.
Mrs. Michael said that the specific fund – the CVC – is also active in other sectors of the Cyprus economy. He stated that the Law on Concentrations, sees the consequences of a concentration act in the specific market, and the purpose is to prevent the existence of the strengthening of a dominant position.
He also said that they are concerned and are investigating various parameters, such as defining what is the market and what are the substitutes, if they will look at Nicosia in isolation to see what market shares the specific fund will end up with, after acquiring the second hospital. “We are also concerned about the bargaining power it will acquire vis-à-vis the OAU,” he said, adding that all these are being examined.
Responding to questions from MPs, Mrs. Michael said that the EPA has the discretion to either place commitments on companies that notify of a merger or to reject it if the consequences on the market are considered so negative.
The Deputy Director General of the OAU, Athos Tsinondidis, told the Committee that the concerns that have been expressed concern them as well, but they also want an environment that will ensure healthy competition and quality. He said these developments must be closely monitored and laws enforced to ensure this competition.
At this stage, he added, they cannot offer anything new to what has been heard, the published. “We are in the early stages of all these processes, we don't know how it will develop,” he said.
Representatives of health professional unions expressed concern them for the possibility of creating an oligopoly and called on the State to intervene.
In his statements after the session, Mr. Diplaros said that the Commission is monitoring the issue “with concern”.
“Nobody can certainly prevent healthy competition, after all, the Competition Commission which is the materially competent Committee to examine all the parameters”, said Mr. Diplaros. He added that “there are dangers if everything that needs to be done is not done properly and with full awareness of what we are going to do”.
He noted that this issue concerns the health sector, “so we all have to be more suspicious, if you like, to look in more detail at some situations”.
He also said that they appeal as the Health Committee, to EPA, “to look in depth” with the seriousness that distinguishes it, and scientifically all the parameters, “precisely so that we don't have the problem of the dominant position that some may acquire with the acquisition of this second private hospital or with some other hospitals in other provinces”.
The MP of DIKO, Chrysanthos Savvidis, said in his own statements that the different fees offered by the OAU to each hospital, “based on the volume of work and not quality criteria, made specific nursing units attractive for foreign investment funds”. Already, he said, hospitals have been acquired, “and it is possible that we will see more in the future, not to mention that several shares have changed hands and there are the so-called hidden investors of these hospitals.” As a result, he added, small hospitals face viability problems.
The issue with acquisitions is that they create oligopolies with many risks, such as the type of care the new investor will choose, he said, saying that perhaps choose to do only operations or not operate a first aid department. He also said that the gathering of many private hospitals under an investment fund “will change the balance”, since they will have a better bargaining chip against the OAU.
Mr. Savvidis said that all state institutions should , and particularly the EPA, “to be very careful” about such acquisitions so as to avoid these problems.
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Source: www.reporter.com.cy
