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Summary

In both the United Kingdom and the Netherlands, competition plays an important role in healthcare. Governments have made the provision of healthcare services subject to market forces. This policy has met with fierce opposition from some, while others consider it to be the Holy Grail for solving major problems, such as the increasing rise of healthcare costs. People tend to either oppose introducing competition in healthcare or to embrace this development. But what does introducing competition in healthcare mean? Healthcare is a broad field involving many actors, complex relationships and complicated legislation. In the same vein, competition law compromises a sophisticated set of rules geared towards fostering competition in a wide array of markets and towards balancing various objectives and interests. What are the ramifications of applying competition rules to the various healthcare operators? Mary Guy has explored with great care these ramifications by focusing on the essential characteristics of the healthcare systems of the United Kingdom and the Netherlands.

An important component of Mary Guy's study is that the rationale of the British and Dutch healthcare reforms is explained. It is an understatement to say that these reforms are complicated and hard to understand for an outsider. The insights offered in this book are very helpful to getting a better grasp of the effects of competition on healthcare and of the way that competition law is applied to healthcare cases. Of great interest is the interplay between the general competition rules and the healthcare specific competition provisions. It is illuminating to learn which difficulties are caused by this interplay in both the United Kingdom and the Netherlands.

A very important issue raised by Mary Guy is the aim of universal access. Is enhancing competition in healthcare an end in itself or does it serve another cause? In the European approach to healthcare it is commonly accepted that the policies adopted by the governments must aim at giving every citizen access to healthcare. Introducing competition must contribute to achieving this goal, which, of course, means that it is not an end in itself. This finding makes clear that applying competition law to healthcare also implies that the various interests at play must be balanced.

Summary

How a nation manages healthcare provision is a mark of its civilisation. Since resources are always finite, the best of intentions requires the management of processes and allocations. How best to proceed is a question that continues to receive varying answers and continual refinements in policy and legal frameworks. The development of competition policy is but one example of this.

An initial stimulus for my research in this area arose from the confidence evident in claims that competition policy could work in the English National Health Service (NHS) as in other sectors of the economy. Was it really that simple, was my first response. Many more questions followed. To what extent could such comparisons work, and what could they usefully prove? Are there complexities attached to the NHS (or healthcare generally) which need to be explored? If the devil is indeed in the detail, surely that is where we should look. How did we get to where we are? Could elucidation be found by examining the attempts being made to introduce competition policy into another healthcare system?

These last two questions seemed especially promising if we are to understand the issues of developing competition in healthcare and move beyond polarised claims of competition being exclusively “good” or “bad” for healthcare reform. Despite the obvious distinction between taxation-funded and insurance-based system models, the Netherlands provided an obvious comparison in view of the common features of the organising principle of solidarity and the underlying EU competition law framework (the development of Brexit notwithstanding).

What has emerged from my doctoral research and subsequent updates for this book is an understanding of the English reforms in light of the Dutch experience, and considerations for the development of competition policy in healthcare. This book therefore provides comprehensive insight into how the operation of general competition law, merger control and sectoral regulation has developed over the first years following the introduction of mandatory private health insurance in the Netherlands in 2006, and the restructuring of the English NHS by the Health and Social Care Act 2012. This contribution is intended to facilitate future discussion both within the Academy and beyond. Over the course of writing this book, various agencies have undergone changes, including with regard to their name.

Summary

INTRODUCTION

One of the controversial aspects of the Health and Social Care Act 2012 (HSCA 2012) was the apparent underscoring of the applicability of general competition law – the provisions governing anticompetitive agreements and abuse of dominance in the Competition Act 1998 (CA98) and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) – to the English NHS. There had been a growing consensus that competition law was indeed applicable, partly in consequence of the expansive requirement for an ‘undertaking’ which does not distinguish between public and private ownership, and likely as a result of the expanding private provision of NHS services, and increased autonomy of NHS Foundation Trusts and their similarities with commercial entities. Consequently, the enactment of the HSCA 2012 may be considered to mark a turning-point in terms of the consequences of making the applicability of competition law explicit. This was in contrast to the ‘new style of competition law’ formed by the New Labour policy rules, which have been described as competition law principles (as distinct from competition law) and an alternative source of competition law. What the HSCA 2012 could not do, however, was to change the underlying, fundamental nature of the NHS as a quasi-market, and so conceptions of a ‘new style of competition law’ may still be appropriate to describe the HSCA 2012 reforms. Certainly the total absence of cases assessed under the CA98 and the TFEU thus far can be attributed as much to confusion about the extent of the substantive law in this area (including what applying competition law can usefully achieve in healthcare reform) as to the complexity of the regulatory regime – the NHS Provider Licence and the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 (the 2013 Regulations) – implemented alongside and subsequent to the HSCA 2012 and the associated interaction between the Competition and Markets Authority (the CMA) and NHS Improvement. Indeed, the respective priorities of these two agencies, ongoing political sensitivity attached to the NHS and perhaps recognition that competition cases are problematic in terms of cost and complexity may also have played a part in recourse to regulatory rules emerging as a more proportionate response to potentially anticompetitive behaviour.

Summary

In general terms, this book has examined the applicability and application of competition law to Dutch and English healthcare, the relationship between the new healthcare regulators and competition authorities, and the modifications made to general merger control regarding hospital mergers. It has also outlined what competition policy in healthcare can look like by reference to the Dutch and English experiences, which encompass the broad typologies of the insurancebased healthcare system and the taxation-funded model. In particular, it has sought to contribute to understanding where competition law may be applied and where exemptions and modifications may be deemed necessary if a competition policy in healthcare is to be workable for benefits to materialise from competition reforms.

Over the course of writing this book and discussing initial research findings with academic and non-academic audiences (primarily) in the UK and the Netherlands, it has become apparent that competition in healthcare is a theme of interest beyond a niche issue within the confines of either competition law or health law. Thus, it is impossible to divorce competition in healthcare entirely from either general competition policy or understandings of healthcare system organisation: it draws heavily from both, so a competition policy for healthcare cannot exist in isolation.

However, the wide-ranging events which have occurred in the past six years have affected the concept of a competition policy for healthcare to varying degrees. For example, the creation of the Autoriteit Consument en Markt (Authority for Consumers and Markets (ACM)) and the Competition and Markets Authority (CMA) can be perceived as having had little impact on the development of competition in healthcare beyond this potentially being treated as less of a priority for larger agencies. Further, although proposals to repeal the Health and Social Care Act 2012 (HSCA 2012) by the Labour, Green and Liberal Democrat parties ahead of the UK General Election in 2015 (and subsequently) failed to materialise, the main impact this could have had would have been to simplify competition policy vis- à -vis the National Health Service (NHS) by leaving intact the (UK and EU) general competition regime.

Summary

The Introduction to this book set out an overview of some of the general tensions and controversies which can arise in introducing competition reforms in healthcare. This chapter builds on that discussion by examining in more detail the Dutch and English competition reforms and the associated legislation and development of guidance which can be characterised as ‘competition policy’.

Although there are differences in the ways in which competition develops within insurance-based and taxation-funded healthcare systems, a perhaps surprising common starting-point for the Netherlands and England is the influence of the ‘managed competition’ model developed by the US health economist, Alain Enthoven. In essence, ‘managed competition’ comprises a purchasing strategy to obtain maximum value for consumers using rules for competition. Originally launched in the late 1970s as a means to manage increasing costs and introduce more equity into healthcare access in the United States, the ‘managed competition’ model was set out as a ‘consumer-choice health plan’ comprising two related parts: a financing system and rules to create a socially desirable competition. Whilst both aspects can be considered to find reflection in the Dutch and English competition reforms, this book is concerned primarily with the latter aspect because this underpins ‘competition policy’ in healthcare.

This chapter examines elements of the legacy of the influence of these ideas within Dutch and English healthcare. It takes each country in turn in order to facilitate understanding, and cross-references with subsequent discussions of the book regarding competition law, the relationship between sectoral regulator and competition authority, and merger control.

Section 1 examines the 2006 reforms of Dutch healthcare and considers how competition has developed in the context of introducing mandatory private health insurance, by reference to the overarching concept of the Dutch ‘healthcare triangle’. This enables discussion of the two constituent elements of competition policy in Dutch healthcare.

This book brings a unique, comparative approach to competition policy in healthcare. By examining an insurance-based and a taxation-funded healthcare system, insights emerge into the applicability and application of general competition law and healthcare-specific competition rules at EU and Member State level. The developing interactions between healthcare regulators and competition authorities, and issues arising from hospital mergers with regard to general and healthcare-specific merger control both receive in-depth analysis.Insights into competition reforms in the Dutch and English healthcare systems show that the term “healthcare” is problematic: there are important distinctions between public and private healthcare, and between healthcare providers and healthcare purchasers. Even a focus on “healthcare providers” has limitations given the myriad services which comprise healthcare delivery. Competition reforms in healthcare attract controversy if seen exclusively as an end in themselves. This book argues that a nuanced approach is needed: competition in healthcare needs to be tempered, and even focused, by national and EU commitments to solidarity. Following Brexit, scholars and policy makers will maintain interest in comparative and EU law research. This book will thus be essential reading for anyone wishing to understand the mutual implications of EU competition law and policy for developing national healthcare reforms.Dr Mary Guy is a Lecturer in Law at Lancaster Law School and is directing the law component of a British Academy/Leverhulme Trust–funded interdisciplinary project on ‘EU Health Policy and Law – Shaping a Future Research Agenda’ in 2018-2020. She is a member of the European Association of Health Law, the Society of Legal Scholars, the Socio-Legal Studies Association, the British Association of Comparative Law, and the Chartered Institute of Linguists Educational Trust.

Summary

INTRODUCTION

In contrast to the Dutch and English experiences of applying competition law to healthcare, the applicability of general merger control to hospital mergers is notably less contentious in either country. The relationship between the competition authority and sectoral regulator is also notably clearer: the former has exclusive competence to approve or block a merger, whilst the latter's input is limited to an advisory function. A further contrast is seen in hospital mergers representing a comparatively active area in terms of the number of cases. In the Netherlands, the trend has been towards a steady number of hospital mergers: 15 between 2012 and 2014, 9 in 2014, and 8 in 2015 and 2016. Within the wider Dutch ‘healthcare sector’, the number of mergers is increasing, from 73 in 2015 and 81 in 2016 to 90 in 2017. In England, there were six hospital mergers (involving NHS Foundation Trusts) between 2012 and 2016 subsequent to the Health and Social Care Act 2012 (HSCA 2012) reforms. The period of 2016 – 17 saw a ‘marked increase’ in NHS mergers, some of which are reviewable under general merger control, and the number of mergers is expected to rise.

Indeed, merger activity has been considered a logical response to the opening up of Dutch hospital markets as previously unregulated markets strived for efficiency. Dutch hospitals have cited the bargaining power of health insurers, stricter quality requirements and increased competition between hospitals as reasons for merging. However, motivation for merging in Dutch healthcare more generally appears to vary across different types of treatment. For example, mergers in the home care sector appear driven primarily by insolvencies, whereas scale plays a notable role in maternity care mergers and healthcare chains, oft en supported by private equity partners driving mergers in the oral care sector.

In England, it might be considered that a similar logic for merging would apply to the NHS quasi-market as well, as it increasingly operates within a financially straitened environment: certainly motivation for mergers has included concerns about workforce size and the delivery of good outcomes across all services when a smaller provider is involved. However, ‘political drivers’ may also play a part alongside economic and clinical drivers for hospital mergers in connection with the English NHS.

Summary

INTRODUCTION

Currently we are at the post-referendum stage: the UK is still a member of the EU and Brexit, the UK exit from the EU, is being negotiated. At the moment the negotiations are centred on finalising the withdrawal agreement which includes provisions on the rights of the EU citizens to continue to live and reside in the UK as well as the rights of UK citizens in the EU, on the border between Northern Ireland and Ireland, and on budgetary issues. The draft agreement also contains provisions on the transition period, otherwise called the implementation period. The exit date is set for 30 March 2019 – that being the first date when the UK is no longer a member state of the EU.

After 30 March 2019, while the UK will no longer be an EU member state, its status in many respects will be equated with one. The part of the agreement on transition aims to achieve a so-called status quo transition. This means that all EU acquis continues to apply, unless otherwise specifically mentioned, after the exit date. The major change will be that the UK will no longer participate in the EU institutional framework: in the EU decision making and judicial bodies, and there will no longer be European Parliament elections in the UK where EU citizens could participate.

However, the new relationship is still to be drafted and negotiated at this point.

On civil justice the UK has stated its desire to continue with civil justice cooperation. This is supported wholly by the legal profession. According to the Government's and the legal profession's assessment, at the very least the UK needs access to the Lugano Convention. However, most on the UK side would prefer to continue with a wider range of EU civil justice cooperation. On the EU side, the response came in March 2017, where the European Council negotiation guidelines do not mention civil justice. They only refer to cooperation in family law. This presumably means that civil justice cooperation in civil and commercial law is to be decided together with other trade issues, with the main question being how ambitious an agreement will be available to the UK in future.

Summary

INTRODUCTION

Addressing the question of regulatory competition in civil procedure among the Member States at the time when the Brussels Convention is turning 50 might seem like raising an inexistent problem at the wrong time. First, how could Member States engage in regulatory competition at the civil procedure level when international jurisdiction, parallel procedures, jurisdiction clauses and recognition and enforcement issues are regulated by common rules inherited from the charming grandmother celebrated in this book (i.e. the Brussels Convention, mother of Regulation Brussels I and later grandmother of the Recast, without counting other off spring like Brussels IIa, etc.)? Second, why would Member States engage in regulatory competition, especially at the civil procedure level, in order to attract more litigation to their own courts? Do they really wish to increase the overload of their national courts? These two sensible questions tend to doubt the reality of regulatory competition. And indeed they also raise a more fundamental question: is justice or civil procedure an object that can be submitted to regulatory or normative competition at all?

A few statements collected here and there in policy declarations or in academia tend rather to show that regulatory competition at the civil procedure level is raging.

Summary

INTRODUCTION: BRUSSELS CALLING

During the nineteen-sixties the European Economic Community (EEC) was a regional organisation with only six Member States, all adhering to the continental European civil law legal tradition. They were only at the start of a long process to incorporate their markets. Already at this early stage, it became apparent that in order to ensure the proper functioning of an internal market and to avoid abuses (debtors quickly and easily moving their assets), a regime of the recognition and enforcement of judgments within the EEC was necessary.

From an outside (sometimes referred to as ‘third State’) perspective, two elements of this early choice are significant. First, the focus was on the recognition and enforcement within the EEC: this was an internal initiative serving an internal goal. Its aims were different from the initiatives undertaken by the Hague Conference on Private International Law, which were more global in their nature.

Second, the Member States of the EEC opted for a double convention (sometimes called a ‘mixed convention’), i.e. a convention including provisions not only on recognition and enforcement, but also on jurisdiction. This choice has had a vital impact outside the Member States.

The purpose of this contribution is to examine the effect of the Brussels Ibis Regulation outside its natural place of functioning, namely the EU. Many transactions today are concluded and/or executed partly in the EU and partly elsewhere. This extra-EU effect was not a major concern for the drafters of the previous editions of the Brussels Convention or the Brussels I Regulation (2001 version)4. At the time of the drafting of the Brussels Ibis Regulation, the EU institutions did consider the issue of its global effect. However, only small changes were made. These include a broadened scope for the benefit of certain forum agreements and of EU consumers dealing with companies outside the EU. Important improvements in Brussels Ibis include the limited possibility to decline jurisdiction in favour of courts outside the EU and a yielding to the Hague Choice of Court Convention. All considered, the current calls by Brussels to the world are still insufficient in a global context.

Summary

Fifty years ago, the Brussels Convention saw the light of day. The European leaders sensed more judicial cooperation was needed if they ever truly hoped to achieve a single market. Businesses and consumers will more easily engage in activities across borders when they have the certainty that a judgment obtained in one Member State will be enforced in another. As there was no legal basis in the Treaties, a classic international treaty was adopted to harmonize jurisdiction as well as the recognition and enforcement of judgments within the European communities.

In fifty years, European private international law has undergone several significant changes: the Brussels Convention has been replaced by regulations, authentic EU instruments; applicable law is no longer disregarded; interpretations of existing provisions have changed; and some fields of private international law previously left for the Member States have been included in the harmonization process. Additionally, there have been some important developments on an international level such as the Hague Judgments Project. Moreover, increased globalization and the emergence of e-commerce has led to an elevated need for and more widespread reliance on private international law.

Each year, the editorial team of Jura Falconis scours the libraries and legal databases for a relevant topic to discuss at the annual Jura Falconis conference. Oft en we focus on what the future holds for the law student, the legal practitioner, the academic: a new law, a future development, a novel evolution. The 50th anniversary of the Brussels Convention, however, presented itself as the perfect opportunity to pause and reflect on the past, to see how far we have come and how we go from here.

Because of the increased relevance of private international law, most legal practitioners can no longer avoid it in their day-to-day practices. Therefore, a thorough revision of the most important aspects of European private international law is certainly not futile. The goal of the conference, however, was not only to refresh students’, practitioners’ and academics’ memories regarding the history, the application and the implications of European private international law but to also off er a view of tomorrow. What will be the future direction of European private international law? What are, for instance, the possible ramifications of the looming Brexit?

Summary

INTRODUCTION

At first glance, it would seem that fifty years have passed and that the regime of provisional and protective measures has remained entirely unchanged in European law. The central provision on this matter in the Brussels I Regulation Recast (Article 35) is drafted in nearly identical terms as the corresponding provision of the 2001 Regulation (Article 31), which itself borrowed from the 1968 Brussels Convention (Article 24). It is a very short provision which gives the power to the courts of any Member State to grant provisional measures under their own law ‘even if the courts of another Member State have jurisdiction as to the substance of the matter’. On its terms, the provision appears to be a very straightforward rule of delegation to domestic law for anything related to the granting of provisional measures.

Yet, beyond this appearance of simplicity lies one of the most complex matters of the Brussels regime, which is the subject of a very rich jurisprudence and of a sophisticated legal system which has evolved over time, including in the Recast Regulation.

There are three main factors that have elevated the strategic importance of this matter over time. Firstly, in modern commercial litigation, provisional measures have oft en an important practical impact on the parties and their dispute. When at the outset of a commercial contract dispute, a party obtains an asset freezing injunction, or the provisional attachment of assets, this may place the other party in an impossible practical situation which may force a settlement. Likewise, when the party alleging an IP infringement is able to obtain an interim injunction preventing the marketing of products which are alleged to be infringing the IP rights, this will give this party the upper hand throughout the process. Provisional measures are oft en outcome determinative.

Secondly, there has been a development in the practice of several Member States to grant cross-border provisional measures, namely measures that affect persons and assets situated in the territory of other States. The English courts have played an active role in the development of these types of measures, starting with world-wide freezing injunctions and moving over the years to other crossborder in personam measures, such as disclosure orders, receivership orders and search orders.

Summary

INTRODUCTION

The purpose of this paper is to examine the relation between the Insolvency (Recast) Regulation and the Brussels I (Recast) Regulation. This relation is notoriously unclear (‘einen der umstrittensten und schwierigsten Komplexe des Internationalen Insolvenzrechts’1). In order to shed some light on the matter, the boundary between both regulations will be examined.

A complicating factor in this respect, is the evolving and particular nature of insolvency proceedings. The evolving nature of insolvency proceedings is illustrated by a clear shift from liquidation to reorganization. Modern insolvency proceedings are no longer (solely) focused on the liquidation of (the assets of) the debtor. Instead, across the European Union a trend can be witnessed whereby insolvency proceedings are used to reorganize (the enterprise of) the debtor. This shift has led to the introduction of all kinds of new insolvency proceedings, with different characteristics than traditional insolvency proceedings. The particular nature of insolvency proceedings relates to creditors (but also creditors between themselves) and debtors trying to resolve a financial and/or economic problem. The outcome of this process affects other stakeholders (in particular employees). This is the core of insolvency proceedings. Related to this core are a multitude of ‘related’ proceedings, which in principle exist autonomously from insolvency proceedings, but frequently arise in the context thereof.10

In order to understand the present, it is good to understand the past. Therefore, the structure of this paper is chronological. Three stages are distinguished. First, I briefly look at the situation before the Insolvency Regulation and the Brussels I Regulation. Secondly, I consider the relationship between the Brussels I Regulation and the Insolvency Regulation. Lastly, I examine the current situation.

PHASE 1: THE BRUSSELS CONVENTION

It is well-known that the 1968 Brussels Convention did not apply to ‘bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings’. These proceedings were not excluded from the scope of application because they were considered irrelevant for international business. Instead, the idea was to cover them with a separate instrument, taking into account the special nature of the matter and the profound differences between the Contracting States of the Brussels Convention, in particular with respect to the question of what actions or disputes fall within the jurisdiction of the court opening the insolvency proceedings.

Summary

INTRODUCTION

Fifty years ago the first European instrument in the fi eld of judicial cooperation in civil and commercial matters saw the light of day: the 1968 Brussels Convention on jurisdiction and enforcement of judgments. Its rules, as amended in 2002 by the Brussels I Regulation and in 2015 by the Brussels Ibis Regulation, very soon became the core of European Private International Law (PIL). Of all the instruments in this field, the ‘Brussels rules’ are most oft en applied by the national courts, as evidenced by the numerous preliminary rulings of the Court of Justice of the European Union (CJEU).

The purpose of the 1968 rules was ‘to strengthen in the community the legal protection of the people therein established’. The 1999 Tampere Council further explored this idea by introducing the concept of ‘one European Area of Justice’: an area where citizens can easily enter into cross-border relations and just as easily have access to judicial redress in case the relations go awry. The underlying idea is, with the risk of oversimplifying matters, that a Belgian citizen shopping in Brussels, Paris or Milan should always have the same degree of judicial certainty with regard to the competent court, the applicable law and the swift enforcement of a judicial decision.

Since then, ample use has been made of the new judicial basis inserted in the Treaty of Amsterdam, now Article 81 TFEU, that allows the European legislator to enact directly binding rules to strengthen this European judicial area. At present more than 20 regulations were adopted, which harmonize large parts of national PIL. More initiatives are planned, albeit of a less ambitious nature as the European legislator currently has been focussing on the consolidation and improvement of the existing instruments.

Needless to say that European PIL as it exists today is no longer a topic for the happy few. The European rules on jurisdiction, recognition and enforcement of judgments, on the applicable law or on judicial cooperation in civil, commercial and family matters have penetrated the day-to-day practices of most legal practitioners.

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Foreword

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Preface

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Contents

Chapter 2 - Competition Law: Its Applicability and Application in Dutch and English Healthcare

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Abbreviations

List of Legislation

Conclusion

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Chapter 1 - Competition Reforms in Dutch and English Healthcare and the Development of Competition Policy

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Competition Policy in Healthcare

Frontmatter

Chapter 4 - Merger Control: Hospital Mergers, General Merger Control and the Development of ‘Healthcare-Specific’ Merger Control in the Netherlands and England

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Brussels Falling: the relationship Between the UK and EU Post Brexit

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Regulatory Competition in Civil Procedure Between EU Member States

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Frontmatter

Brussels Calling. The Extra-EU Effect of European Private International Law

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Preface

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Cross-Border Provisional Measures: Stepping Backwards in the Brussels I Recast

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The (not so Symbiotic?) Relation Between the Insolvency and the Brussels I Regimes

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European Private International Law and the National Judge. Some General Refl ections by a Belgian Judge

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Competition Policy in Healthcare

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