RHÖN-KLINIKUM AG | 04/11/2007

New decision in cartel proceeding

  • Düsseldorf Court of Appeals dismisses appeal by RHÖN-KLINIKUM AG against the Federal Cartel Office
  • RHÖN-KLINIKUM AG will have further legal steps reviewed
  • Group’s growth strategy remains unchanged

The Düsseldorf Court of Appeals today dismissed the appeal lodged by RHÖN-KLINIKUM AG in the cartel proceeding relating to the district hospitals in Rhön-Grabfeld at the Bad Neustadt and Mellrichstadt sites. On 10 March 2005 the Federal Cartel Office (FCO) prohibited the takeover of the two district hospitals by RHÖN-KLINIKUM AG. The Company lodged an appeal against this before the Düsseldorf Court of Appeals. On 5 October 2005 the Court initially issued a clarifying order calling on the FCO to conduct further investigations into the objectively relevant market.

The decision by the Court to apply merger control also to the regulated hospital market is of far-reaching significance for the German healthcare system since it clearly contradicts health and social legislation in force. For years this legislation has been pressing for integrated concepts in healthcare delivery, as inter-facility treatment attuned to the needs of patients brings proven quality and cost advantages.

“We cannot accept such narrow interpretation of the legislation in its present form”, said Wolfgang Pföhler, chairman of the Board of Management of RHÖN-KLINIKUM AG; “further legal steps will be reviewed immediately. If on this issue formalism is to be given precedence over the values and goals of our healthcare system, patient care in Germany is likely to get more expensive and qualitatively worse.” The possibility of network-based healthcare delivery expressly provided for by the German legislator on account of the complexity of modern medicine is largely undermined, if not altogether defeated, by the current stance of the Cartel Office as confirmed by the Court of Appeals.”

The district hospital in Mellrichstadt, which along with the district hospital in Bad Neustadt was also affected by this proceeding, has since been closed due to a shortage of funding from the District of Rhön-Grabfeld. “If cartel law leads to healthcare provision being abandoned in rural areas, something is going fundamentally wrong in Germany. I also see this as requiring clarification at the political level”, added Wolfgang Pföhler.

The Group’s expansion strategy remains unchanged in the wake of today’s decision. Since the end of 2004 alone, RHÖN-KLINIKUM AG has purchased 16 hospitals, including the heavyweight university hospitals in Gießen and Marburg. None of these transactions has given rise to objections under German cartel law. Although it is the market leader, the Company does not even have a three per cent share of the market. The high growth potential – which is also non-contentious from a cartel-law standpoint – is thus obvious.