The difficulties being experienced by NMC Health may be a precursor to a sale of its UK hospital business, Aspen Healthcare, which it acquired in late 2018. The Competition and Markets Authority (CMA) could be expected to clear an acquisition of Aspen by any of the UK’s major private hospital operators, including Nuffield, Ramsay, Spire, HCA or Circle/BMI, but divestments may be needed.

NMC Health’s UK hospital business

Aspen’s eight UK hospitals serve NHS and private patients. Its NHS patient business, however, is likely to be quite small in each local market where it is present. As a result, we do not consider that an acquisition of Aspen by any private hospital operator would be likely to lead to a loss of competition in the provision of NHS patient care. (The main caveat here would be if local NHS trusts were contracting with local private hospitals for significant volumes of waiting list business.)

In relation to private patients, there are six Aspen hospitals where the risk of a loss of competition, following acquisition by a UK trade buyer, appears greatest. These are:

  • The Holly, Parkside, Cancer Centre and Highgate hospitals in London if Aspen is bought by HCA;
  • Claremont Hospital in Sheffield if Aspen is bought by Circle/BMI; and
  • The Edinburgh Clinic in Scotland if Aspen is bought by Spire.

The Holly, Parkside, Cancer Centre and Highgate hospitals, London

Aspen’s four London hospitals are spread across the city. Highgate Hospital is in north central London, The Holly is in north east London, and Parkside Hospital and the Cancer Centre are in Wimbledon in south west London. Given the strength of HCA’s London position, it is reasonable to expect close scrutiny of any HCA acquisition of Aspen, which would further add to its presence in this market.

Claremont Hospital, Sheffield

Aspen’s Claremont Hospital is less than a mile from BMI Thornbury, and there are no other private hospitals within a 25min drivetime. Ramsay Park Hill and Spire Methley Park are both 25-35 miles away. Given this, the CMA might be expected to look closely at whether a Circle/BMI acquisition of Aspen might result in a substantial lessening of competition for private patient services in the Sheffield area.

The Edinburgh Clinic, Scotland

The Edinburgh Clinic, Aspen’s private patient hospital in Edinburgh, is close to two private hospitals operated by Spire, Murrayfield Hospital and Shawfair Park Hospital. As a result, the CMA might be expected to look closely at whether a Spire acquisition of Aspen might result in a substantial lessening of competition for private patient services in the Edinburgh area.

Methodology

Our experience is that most hospitals have a 20-25min catchment area using CMA methodologies. More important than precise catchment area drivetimes is the distribution of facilities in each local area, and this is reflected in our commentary above. In each local area we have used reasonable efforts to identify competitor hospitals consistent with this note providing a high-level, rather than definitive, assessment.