PN private hospital merger may get green light

Friday 1st July 2011

The Commerce Commission says Southern Cross Hospitals Ltd and Aorangi Hospital Ltd should be allowed to merge their private hospitals in Palmerston North.

The merger would reduce competition for provision of private elective surgery in the city, and the new entity would have scope to raise prices because of the loss of competition.

But the commission said that most patients would be protected from price increases because their procedures would be funded by ACC and through fixed-price arrangements between insurance companies and the hospital.

"Also, there would be benefits such as cost savings that would outweigh the loss of competition," said commission deputy chairwoman Sue Begg.

The commission said there were potential cost savings of $4.98 million over five years.

The Southern Cross Hospital Trust is a registered charitable trust that owns nine private hospitals and has shareholdings in four other private hospitals. Its Palmerston North hospital has two operating theatres and 26 in-patient beds, and provides specialist consulting and elective surgical services to both day patients and in-patients.

Aorangi Hospital is privately owned by a group of medical specialists who also practise at the hospital and has four operating theatres and 32 in-patient beds and also provides a range of specialist consulting and elective surgeries.

The applicants said that without a merger, the financial situation of Palmerston North's Southern Cross hospital meant that it would likely close.

The commission asked for public submissions on the merger by July 15, so that it can release a final decision on July 29.

NZPA

Comments from our readers

No comments yet