News, 11 May 2011
The FCA today approved a merger, subject to conditions, whereby Terveystalo Healthcare Oy acquires the total share capital of ODL Terveys Oy from the Oulun Diakonissalaitos Foundation. The subsidiaries and partnership companies of ODL Terveys (for example, Sairaala Botnia Oy and occupational health care company Condia Oy jointly owned with the city of Oulu) are part of the transaction. For instance, all the private hospitals in Northern Finland and the majority of the private general and specialist medical services in Kemi-Tornio and Kajaani will be owned by Terveystalo hereinafter.
The approval was conditional upon Terveystalo's commitments to the FCA concerning the hospital services of Oulu and the medical services in Kajaani and Kemi-Tornio. Doctors receiving patients in the Mehiläinen Medical Centre are provided with the opportunity to operate in Hospital Botnia in Oulu on similar prices and terms as prior to the merger. Additionally, Terveystalo undertakes to follow the same national prices as elsewhere in Finland as regards the medical services offered to private customers in the region of Kajaani and Kemi-Tornio. Barring commitments, price increases pertaining to the services would have been imminent.
Thus, even after the transaction, customers will have the opportunity to purchase operations conducted in private hospitals also from doctors outside the concentration. The condition concerning Kajaani and Kemi-Tornio is intended to ensure the same national prices for imaging and laboratory services for the private customers in the region as elsewhere in the more competitive regions of Finland.
Conditions only concern services for private customers
Both Terveystalo and ODL Terveys have also offered their services to the public sector, firms and insurance companies in the provinces of Oulu and Lapland. The FCA also investigated the impacts of the merger in the occupational health care markets, the outsourcing market and the insurance company service market but the investigations showed that the threshold for intervention in these markets as defined in the Competition Act was not exceeded.
In the occupational health care services, public actors are also able to compete with the concentration in the provinces of Oulu and Lapland. For example in the region of Oulu, the share of public service provision of the regional occupational health contract market was roughly one third in 2009, and two-thirds in the region of Kajaani and Kemi-Tornio.
Whereas in the outsourcing services of public entities and insurance company services, the buyers hold a strong bargaining position, and particularly in the insurance company services, the pricing of the health care services is agreed on a national basis as a rule. The firm position of the concentration in the insurance company markets in Northern Finland is hence not decisive for the total market, since Northern Finland's share of it is relatively small.
The decision issued by the FCA today contains several business secrets by the parties, and it may only be published when these have been removed in roughly two weeks' time.
Senior Research Officer Susanna Suvanto
Head of Research Maarit Taurula