The AdC identifies barriers to the opening of new facilities and proposes recommendations aimed at promoting the well-being of chronic disease patients

Press Release 19/2020
 

The AdC identifies barriers to the opening of new facilities and proposes recommendations aimed at promoting the well-being of chronic disease patients

The Portuguese Competition Authority – Autoridade da Concorrência (AdC) has undertaken an analysis on the hemodialysis care provision sector in Portugal, where it has identified barriers to the opening of new facilities and a limited patient choice with respect to the facilities where they are treated.

In March 2020, more than 12,000 Portuguese were undergoing hemodialysis, which is the predominant method of dialysis therapy for treating chronic kidney disease. Hemodialysis is mostly provided by private operators – about 93% of patients. The prevalence of chronic kidney disease in Portugal is high compared to other countries and the number of patients undergoing treatment has increased, on average, about 3.5% per year, between 1998 and 2019.

In Portugal, there has been a consolidation of the incumbents’ position in the hemodialysis sector. Barriers to entry and expansion are singled out as a strong limitation to competition by the operators.

Among the barriers to the opening of new facilities, the AdC highlights the significant legal uncertainty in the regime of private contracting of NHS services (i.e. convention regime) and the delays in the convention regime and in the licensing procedure.

Barriers to the opening and expansion of hemodialysis facilities

 

This is especially relevant considering the high level of concentration in this sector, where the four largest private operators, in March 2020, held 81% of the facilities in mainland Portugal, and treated 88% of the patients.
 
Share of facilities of the largest private operators, in March 2020

 
The high level of concentration may reduce the incentives for firms to compete on quality and proximity.
 
In March 2020, there were 124 hemodialysis facilities in mainland Portugal, of which 80% (99) were private and 20% (25) were public. In March 2020, the four private operators with the largest number of facilities in mainland Portugal were NephroCare, Diaverum, DaVita and B. Braun.
 
It is, therefore, key to promote effective and well-informed patient choice, as opposed to a model of allocation of patients to facilities, in order to intensify competition on quality and innovation in the sector.
 
To undergo hemodialysis treatment, the chronic disease patient must travel to the facilities, usually three times per week. Hemodialysis sessions may last between 2 to 5 hours, depending on what type of machines are used and on the specific situation of each patient.
 
The high level of concentration in the market, the existence of unnecessary barriers to entry and the limited patient choice may have a negative impact on the well-being of chronic kidney disease patients by limiting their proximity to facilities.
 
The AdC proposes, therefore, seven recommendations to the Government, aimed at removing unnecessary barriers to the opening of new facilities and promoting patient choice, so as to promote the well-being of chronic kidney disease patients:


1. Ensure a timely publication of the new standard clause concerning hemodialysis

2. In the standard clause:
(a) introduce the possibility of granting a convention by tacit approval;
(b) introduce a deadline to respond to convention requests

3. Remove unnecessary obstacles that prevent entry of operators and/or the opening of facilities because of the existing capacity, the concentration in the market, or the profitability and/or use of existing resources

4. Create an unique portal for operators that links both the licensing and the convention procedures

5. Ensure that the quality requirements in the best practice guidelines for hemodialysis, under discussion, are technologically neutral

6. In the non-emergency patient transport regulations:
(a) introduce a duty for the ARS to inform the patients when several facilities meet the NHS transportation management criteria
(b) undertake a cost-benefit analysis on the possibility of introducing a reimbursement option for patients who ensure their own transport, limited to a certain reference value

7. Create a system to compare facilities on quality and outcome indicators of hemodialysis treatments

Lisbon, 27 November 2020

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