Merger Control Analysis in Health Care Sector in Finland : Presence and Importance of Public Sector Offering
Heurlin, Jenni (2022)
Heurlin, Jenni
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2022051034309
https://urn.fi/URN:NBN:fi-fe2022051034309
Tiivistelmä
The Finnish private health care sector has faced consolidation during the past years. Consequently, also the Finnish Competition and Consumer Authority (‘FCCA’) has reviewed several mergers between private social and health care companies, such as the proposed merger between Mehiläinen and Pihlajalinna in 2020, which also gained significant public attention, as the FCCA proposed the Finnish Market Court to prohibit the merger. What influenced the FCCA’s prohibition proposal significantly was the FCCA’s conclusion that public and private health care operators do not compete with each other, which led to the merging parties having high combined shares of supply in the private sector.
Against this background, this thesis analyses the FCCA’s investigative measures regarding mergers in the social and health care sector. More explicitly, this thesis analyses i) in which type of merger cases the FCCA has considered the mixed oligopoly structure of the health care sector and is there a connection between such a consideration and the end result of the case; and ii) how the FCCA has assessed the objectives of the public health care providers as well as their freedom and/or possible constraints to choose their quality and pricing in its health care sector merger investigations. The thesis examines these research questions by analysing the FCCA’s merger decisions in the social and health care sector (incl. also dental care) between 2011 and 2021 with a microeconomic theory-based content analysis.
The results of the thesis indicate that the FCCA’s position concerning the possible mixed oligopoly structure of the social and health care sector has shifted to some extent during the past 10 years, with the direction being not to consider the social and health care markets as mixed oligopolies, especially considering the health and dental care markets. The results do not indicate any clear correlations between the firm (and case) sizes as well as the FCCA considering the mixed oligopoly structure, however, a correlation between the FCCA not considering the mixed oligopoly structure as well as a negative end result can be identified, as in all cases in which the FCCA has required the prohibition of the merger or approved with commitments, the FCCA has decided not to take into account the competition between the public and private sector. Furthermore, considering the public sector’s objectives and operating restraints, the thesis concludes that the FCCA focuses mainly on the differences between the public and private health care operators, instead of considering the effects of the presence and altruistic aims of the public sector for the private sector firms’ possibilities to operate and the possible constraints that the public sector may impose to the private sector, as proposed by the microeconomic theory.
Against this background, this thesis analyses the FCCA’s investigative measures regarding mergers in the social and health care sector. More explicitly, this thesis analyses i) in which type of merger cases the FCCA has considered the mixed oligopoly structure of the health care sector and is there a connection between such a consideration and the end result of the case; and ii) how the FCCA has assessed the objectives of the public health care providers as well as their freedom and/or possible constraints to choose their quality and pricing in its health care sector merger investigations. The thesis examines these research questions by analysing the FCCA’s merger decisions in the social and health care sector (incl. also dental care) between 2011 and 2021 with a microeconomic theory-based content analysis.
The results of the thesis indicate that the FCCA’s position concerning the possible mixed oligopoly structure of the social and health care sector has shifted to some extent during the past 10 years, with the direction being not to consider the social and health care markets as mixed oligopolies, especially considering the health and dental care markets. The results do not indicate any clear correlations between the firm (and case) sizes as well as the FCCA considering the mixed oligopoly structure, however, a correlation between the FCCA not considering the mixed oligopoly structure as well as a negative end result can be identified, as in all cases in which the FCCA has required the prohibition of the merger or approved with commitments, the FCCA has decided not to take into account the competition between the public and private sector. Furthermore, considering the public sector’s objectives and operating restraints, the thesis concludes that the FCCA focuses mainly on the differences between the public and private health care operators, instead of considering the effects of the presence and altruistic aims of the public sector for the private sector firms’ possibilities to operate and the possible constraints that the public sector may impose to the private sector, as proposed by the microeconomic theory.