The Belgian Competition Authority publishes a specific analytical framework for hospital concentrations

In its priorities note for 2023, the Belgian Competition Authority (“BCA”) listed the pharmaceutical and health care sector as one of it major interests. It noted that “in the coming months, the BCA will also devote additional attention and resources to the continued consolidation in the hospital sector.” [1] The BCA is clearly keeping that promise as on 18 October 2023, only three months after its communication of 14 July 2023 confirming its merger control competence over hospital concentrations, it published a sector-specific analytical framework for hospital concentrations.

The following article is therefore an updated version of our previous article on the uncertainty regarding hospital merger control, which focused on the BCA’s decision of 28 June 2023 to partially lift the stand-still obligation regarding a concentration between two hospitals, and the BCA’s communication of 14 July 2023 clarifying the applicable rules. Section 4 of this updated article focuses on the new sector-specific analytical framework that the BCA published on 18 October 2023.


Merger and acquisition (M&A) transactions that meet certain statutory turnover thresholds must be notified to and approved by the BCA before they can be implemented. This requirement applies in general to all economic sectors, however uncertainty about the applicability of the notification requirement for hospitals arose in 2019. In February 2019, [2] a legislative amendment to the General Act of 2008 on Hospitals obliged hospitals to establish and be part of a loco-regional hospital network from 1 January 2020. A loco-regional hospital network is defined as a:

long-term, legally formalised cooperation with legal personality . . . between at least two non-psychiatric hospitals that are separately recognised at the time of the creation of the local hospital network . . . which are located within a geographically contiguous area and which offer complementary and rational locoregional care assignments.

The legislative reform’s preparatory works stressed that the establishment of loco-regional hospital networks would be aimed at maintaining long-term qualitative, accessible and affordable care and that collaboration between hospitals would improve the coordination of care for patient benefit.

Following this amendment, the BCA received some questions regarding the applicability of the merger control rules to concentrations under the newly updated hospital legislation. Consequently, the BCA issued a note in July 2020 in which it clarified that the creation of regional clinical hospital networks could be caught by merger control rules if those concentrations met the normal notification thresholds. In that note, the BCA also set out the principles that it would use when assessing the establishment of hospital networks and their possible qualification as concentrations under competition law.

However, in an attempt to prevent delays in implementing the 2019 reform to the General Act of 2008 on Hospitals, the legislature overturned that BCA opinion with another legislative act, the Act of 29 March 2021. [3] Through this act, the legislature provided that the establishment of a loco-regional hospital network and any subsequent changes in its composition are not subject to prior merger control under book IV, title 1, chapter 2 of the Code on Economic Law (CEL). In other words, the Act of 2021 exempted any establishment of loco regional hospital networks, even if it would qualify as a notifiable concentration in accordance with the CEL’s competition rules, from the obligation to be notified to and approved by the BCA.

Decision of 28 June 2023: Partial lifting of standstill obligation

On 31 May 2023, the BCA received notice of a proposed merger between two hospitals, the “Pôle hospitalier Jolimont” and the “Centre hospitalier universitaire et psychiatrique de Mons”. Due to the uncertainty regarding the application of the merger control rules to hospital mergers, given the different opinions and legislative acts, for a long time the parties in the concentration process believed that their concentration did not have to be notified. Therefore, they asked the BCA for a derogation from the so-called “standstill obligation” (i.e., the prohibition on implementing a concentration until the competition authority has authorised the concentration). Indeed, the parties claimed that they had to execute certain (planned) transactions before a notary and that without these documents the merger could not take place on time, and that respecting the standstill obligation would not allow the parties to continue with those legal steps in time.

The BCA considered that the request for a derogation from the standstill obligation arose from exceptional circumstances concerning the uncertainty surrounding the obligation to notify hospital mergers. The BCA found that the parties had believed in good faith that no notification was due, as:

  • the Act of 28 February 2021 prescribes that the constitution of a hospital network is not subject to merger control; and
  • according to the preparatory works of 2021, the Minister of Economic Affairs had suggested that a merger between members of the same hospital network would constitute an “internal restructuring”.

Furthermore, the BCA considered that a partial lifting of the standstill obligation should not have a significant competitive effect as long as the parties undertook that no act of coordination or integration of hospital activities would be adopted and that they would not undertake any irreversible action. Consequently, under those conditions, the BCA decided to partially lift the standstill obligation on the parties.

BCA’s communication of 14 July 2023 confirming the BCA’s hospital merger control competence

Different legislative acts and legal opinions thus have created a lot of uncertainty about the notification requirement for hospital concentrations in Belgium. However, in its decision of 28 June 2023, the BCA did not elaborate on the applicability of the notification rules, noting that:

[i]nsofar as the parties (like the Auditor) now consider that the merger is subject to merger control, the Assesseur Désigné does not need to express an opinion on the various possible interpretations of the applicability of merger control to hospital groupings within a network.

As a follow-up to this decision, on 14 July 2023, the BCA’s executive committee published a communication confirming that M&A transactions between hospitals fall under its merger control regime. That communication first acknowledged that the Act of 29 March 2021 exempted from the BCA’s prior merger control “the creation of a local-regional clinical hospital network and any subsequent change in the composition thereof”. But then the communication explicitly confirmed that this exemption does not extend to M&A transactions between hospitals that are independent of the creation of a loco-regional hospital network or a change in the composition, even if the hospitals concerned are already part of the same hospital network. According to the BCA’s executive committee, these M&A transactions are structural in nature and lead to a lasting change in the management of the supply of hospital services and are, therefore, notifiable transactions.

Moreover, it should be noted that the exemption in the Act of 29 March 2021 is without prejudice to the application of the European merger control rules. Consequently, should the EU notification thresholds be exceeded by the hospitals concerned in the concentration, a notification at the European level would be required even for transactions that would come within the scope of the 2021 Act’s exemption. Therefore, hospitals should seek solid legal advice to verify whether the establishment of a new entity between hospitals must be notified to a competition authority (and whether it could benefit from the standstill obligation exemption). The BCA showed some leniency in its decision of June 2023 by partially lifting the standstill obligation due to the legal uncertainty concerning the notification rules for hospitals that still existed then. However, the BCA communication also stressed that it is “currently handling a series of mergers and acquisitions in the hospital sector under its merger control regime, in accordance with the applicable legal framework and in full cooperation with the hospitals in question”.

BCA’s sector-specific analytical framework for hospital concentrations of 18 October 2023

Since the BCA’s communication of 14 July 2023, there can no longer be any doubt that M&A transactions in the hospital sector meeting the statutory thresholds, must be notified to the BCA. Taking into account the very specific nature of the hospital sector, the BCA has now however published for the first time a sector-specific analytical framework that it will use to assess notifiable M&A transactions in the hospital sector.

In particular, the BCA has listed the following ten questions that will be key for the BCA’s examination of the notified transaction, focusing on the transaction’s impact on the types and quality of care offered by the hospitals, the geographic scope of their patients, their costs, revenues and rates, their (para)medical staff, etc.

1. What types of care (inpatient and outpatient) are provided by the hospitals in question, on each of their sites, and to what extent (number of hospitalisations/consultations, number of beds, staff, revenues)?

2. Where do the patients of each of the hospitals/sites come from, and which other hospitals and care providers are present in the relevant care area (based on RHM/DRG and INAMI data)?

3. What are the key performance indicators (KPIs) of the hospitals concerned, and to what extent will these be affected by the concentration project (e.g. bed occupancy, length of stay, turnaround times, incidents, patient satisfaction)?

4. What are the main underlying reasons for the proposed concentration, and to what extent will such an operation improve/maintain the range and quality of care services being offered (volume effects, expertise, equipment, personnel, organisation, etc.), also in comparison with a network cooperation?

5. Will the proposed concentration increase revenues and/or reduce operating costs, at what level and to what extent (procurement, equipment, resources, etc.)?

6. Will the proposed concentration facilitate the recruitment of medical and paramedical staff and the organisation of care?

7. Will the proposed concentration modify the organisation of sites/care units/beds, at what level and to what extent?

8. Does the proposed concentration present a risk of an increase in unregulated rates/charges (for single rooms, fee surcharges, specific treatments, ancillary services, etc.)?

9. Does the proposed concentration present a significant risk of delay in consultation or hospitalisation (scheduled) times and/or travel times for patients in the relevant care area?

10. Does the proposed concentration present a risk of worsening employment conditions for medical and paramedical staff (lack of employer/alternative place of practice in the relevant area, increase in fee retrocession rates, etc.)?

Apart from this very helpful guidance, the BCA has furthermore offered some flexibility to the notifying hospitals by indicating that the standard notification form may also be adapted to the specificities of the hospital sector and the examination of the relevant issues as mentioned in the ten topics listed above.


Previously, there might have been some uncertainty about the application of the notification rules for hospitals and therefore some leniency offered by the BCA, but now that things have been clarified one thing is certain – hospital M&A transactions are definitely on the BCA’s radar. The BCA is however showing that it understands the specificities of the hospital sector and has offered welcome sector-specific guidance for the notification of hospital M&A transactions. In that regard, it is advisable to enter into pre-notification discussions with the BCA as soon as possible, to ensure an efficient and meaningful process, both for the BCA and the notifying hospitals.

Beatrijs Gielen
Sébastien Willems