Hellenic Competition Commission sector inquiry into the provision of private healthcare and related insurance services: The HCC focuses on the interplay between Big Data and the private health care sector

Hellenic Competition Commission sector inquiry into the provision of private healthcare and related insurance services: The HCC focuses on the interplay between Big Data and the private health care sector

Authors: Ifigeneia Argyri, Vicky Vlontzou


LIFE SCIENCES & HEALTHCARE PRACTICE

Hellenic Competition Commission sector inquiry into the provision of private healthcare and related insurance services: The HCC focuses on the interplay between Big Data and the private health care sector  

The Hellenic Competition Commission (“HCC”) initiated on 05.07.2021 a sector inquiry (“SI”) into the market of provision of private health care and related insurance services[1]. This comes in the aftermath of the restructuring[2] of the private health care sector over the last five years and increasing concentration thereof as well as of the reshaping of the regulatory framework for the provision of related insurance services.

In deciding to launch this initiative, the HCC took into consideration the following parameters:

  • In Greece, although the National Health System offers universal coverage, there is a significant share of private expenditure in the provision of health services, 90% of which, according to industry research, appear to come directly from individuals with 10% being covered by private insurance companies;
  • Digital transformation of health services;
  • The development and management of large databases (Big Data) of service providers and customers, which make a positive contribution to science but at the same time may pose risks to the development of competitive conditions in the sectors under investigation.

    a. Objective

The HCC will focus on examining issues such as:

  • The definition and mapping of the relevant markets;
  • The assessment of any market power in the individual markets and the definition of the ecosystem created by the interdependencies, structural relationships and shareholding relationships between the players;
  • The identification of those parameters that create the competitive framework at the horizontal and vertical levels;
  • An assessment of the bargaining power created throughout the value chain in the provision and financing of health services;
  • The regulatory and supervisory framework in these markets, with a focus on any licensing requirements, any ambiguities or gaps in this framework and any impact on the entry of new players to the market or the expansion of existing ones;
  • The collection, management and use of medical and other data and the bargaining power they give to their owner, as well as possible market failures;
  • Any use of mechanisms for granting access to data in a way that may lead to exclusionary practices against competitors;
  • An assessment of the adequacy of competition law instruments to address identified issues in comparison with sectoral legislation.

    b. The relevant markets

As a preliminary point, it is highlighted that the functioning of the market for the provision of private health services is linked to the market for health insurance coverage. Τhe key variables of the said adjacent markets include the quality and prices of the services provided, the network coverage, the insurance premiums and the range of insurance coverage.

          c. Competitive relationships in the sector’s value chain

The aforementioned markets consist of unique characteristics where a network of competitive relationships takes place. In more detail, the following horizontal and vertical competitive relationships are formed in the sector’s value chain:

  • Horizontal competition between health service providers regarding the quality and the price of services and in attracting qualified doctors;
  • Horizontal competition between providers of insurance coverage on the scope of the network, the determination of insurance premiums and insurance packages;
  • Vertical competition (bargaining power) between insurance coverage providers and health care providers on the prices of health care services;
  • Competition between market players for access to physicians’ and customers’ data which may function as a tool to exclude competitors and/or as a tool for tying or bundling practices[3].

    d. Competition issues to be examined

In light of the above, competition issues under examination are: Firstly, competition between health service providers on the quality and prices of the services provided. In particular, the SI shall map the new structure and the specificities of the market following the acquisitions taking place in the wider health and insurance sector, as well as other factors, namely the vertical integration of companies, the investigation of potential structural links between competitors, as well as the mapping of partial vertical integration relationships in order to better understand the functioning of the markets and the concentration observed in certain geographic markets (e.g. Attica region). Furthermore, among the issues under investigation should be any strengthening of specific market players or the extent to which the concentration of the sector leads to symmetry of market shares, thus facilitating coordinated or non-coordinated effects resulting from the structure of the market.

Other issues that shall be explored are the possible strong bargaining power of specific market players and/or the possibility of tacit coordination of health service providers in the markets that determine the quality of health services (infrastructure, technologies, pharmaceutical, and health supplies, etc.). The assessment of the above should also take into account the extent to which access to patient and/or HCPs databases may actually and/or potentially influence the above relationships and practices.

Moreover, potential competition issues under investigation are identified in the competition between insurance coverage providers for the health service network offered, as well as the prices in relation to the quality in the available insurance packages. Specifically, the relationships that are formed in an ecosystem defined by a two-sided platform, i.e. an insurance company linking health service providers with insured persons, will be explored.

Last but not least, other competition issues to be investigated are barriers to entry in the health services and insurance coverage markets, as well as regulatory issues in both said markets.

     e. Assessing the role of Big Data

The role of data in the development of the sector of personalized medicine as well as the changes in the value chain for private health services and the way in which these services affect the private health insurance sector through the possibilities provided by the collection of Big Data will also be among the subjects that will be examined by the sector inquiry.

In the broader health services value chain, different providers hold different types of data.

In this regard, the SI takes into consideration the industry trends as well as recently developed technology-enhanced solutions in healthcare, such as the following:

  • Clinical (patient) data are usually held by doctors and clinical trial data are held by pharmaceutical companies.
  • Internet companies such as Web search engines, online platforms, and digital health care service providers may now store data concerning patients’ health, behavior, and preferences (lifestyle data);
  • Medical devices companies, particularly in the context of e-health applications (e.g. wearable smart sensors) collect medical information and exchange health-related data;
  • Public health authorities, insurance companies, and health data companies maintain data regarding the cost and consumption of pharmaceuticals or healthcare products;
  • Advances in diagnostics and the ability to share information in real-time between different monitoring devices (e.g. sensors embedded in mobile phones and monitoring devices have become widespread);
  • Machine learning algorithms can now examine health data elements such as genome sequences, patient clinical care records, and diagnostic test results to make predictions and recommendations;
  • Artificial Intelligence (“AI”) is being used to turn an amplitude of data into valuable information that can be of interest to patients, hospitals, insurers, and other healthcare providers;
  • Digital health solutions, such as screening and testing services available in apps or even virtual, AI-enhanced doctors, will soon be readily accessible on mobile devices.

Τhe sector inquiry will also focus on:

  • The structure and governance of the health services value chain, by taking into consideration the importance of data;
  • The strategies and business models of companies that are active in the abovementioned sectors, as well as the potential competitors that may operate in this area, in particular, due to the development of MedTech and InsurTech services and ecosystems;
  • The ways in which the existing regulatory framework may affect competition in these new ecosystems.

    f. Next steps

In the first phase of the SI, the HCC launches a public consultation inviting all interested parties to submit their comments and views regarding the competitive conditions in the sector.

The public consultation is addressed-among others to:

  • Businesses operating at all levels of private medical services (clinics, hospitals, diagnostic centres, etc.);
  • Businesses active in the provision of health insurance services;
  • Suppliers of medical facilities for the collection, processing, and management of data.

Participation in the public consultation may either take place in person through a teleconference that will be organised by the HCC in September 2021 and/or by submitting their views in writing in the form of a memorandum, by September 20, 2021.

Interested parties may express their interest in participating in the conference call by sending an email to medinsur@epant.gr by 30 August 2021.

 

Footnotes:

[1] See HCC press release of 12.07.2021 in https://www.epant.gr/enimerosi/health.html .

[2] According to the HCC, in the market for private secondary health care services, it now appears that the five (5) largest groups hold approximately 46% of the total market, while the concentration of the market for private primary health care services, i.e. diagnostic centres, is such that the three (3) largest groups hold approximately 37% of the total market.

The sector is characterised by a small number of large companies with strong bargaining power and significant market share, while the remaining companies are small and medium-sized and competing for a smaller market share. According to the Bank of Greece, in 2020, 33 companies are active in the market. In the provision of health insurance services, it is estimated that the three (3) largest companies hold approximately 50% (CR3=50%) of this market, a sector in which, according to the HCC press release, significant concentrations have also taken place and this is a trend that is likely to continue. Also, the press release mentions that health insurance premiums have increased significantly over the last four years. In 2019, health insurance premiums are estimated at €254.3 million, up 9.1% compared to 2018.

[3] According to HCC’s relevant press release, the use of databases may also act as a tool for direct abuse of consumers, through personalised supply pricing/discriminatory pricing practices.

Authors: Ifigeneia Argyri, Vicky Vlontzou


LIFE SCIENCES & HEALTHCARE PRACTICE

Hellenic Competition Commission sector inquiry into the provision of private healthcare and related insurance services: The HCC focuses on the interplay between Big Data and the private health care sector  

The Hellenic Competition Commission (“HCC”) initiated on 05.07.2021 a sector inquiry (“SI”) into the market of provision of private health care and related insurance services[1]. This comes in the aftermath of the restructuring[2] of the private health care sector over the last five years and increasing concentration thereof as well as of the reshaping of the regulatory framework for the provision of related insurance services.

In deciding to launch this initiative, the HCC took into consideration the following parameters:

  • In Greece, although the National Health System offers universal coverage, there is a significant share of private expenditure in the provision of health services, 90% of which, according to industry research, appear to come directly from individuals with 10% being covered by private insurance companies;
  • Digital transformation of health services;
  • The development and management of large databases (Big Data) of service providers and customers, which make a positive contribution to science but at the same time may pose risks to the development of competitive conditions in the sectors under investigation.

    a. Objective

The HCC will focus on examining issues such as:

  • The definition and mapping of the relevant markets;
  • The assessment of any market power in the individual markets and the definition of the ecosystem created by the interdependencies, structural relationships and shareholding relationships between the players;
  • The identification of those parameters that create the competitive framework at the horizontal and vertical levels;
  • An assessment of the bargaining power created throughout the value chain in the provision and financing of health services;
  • The regulatory and supervisory framework in these markets, with a focus on any licensing requirements, any ambiguities or gaps in this framework and any impact on the entry of new players to the market or the expansion of existing ones;
  • The collection, management and use of medical and other data and the bargaining power they give to their owner, as well as possible market failures;
  • Any use of mechanisms for granting access to data in a way that may lead to exclusionary practices against competitors;
  • An assessment of the adequacy of competition law instruments to address identified issues in comparison with sectoral legislation.

    b. The relevant markets

As a preliminary point, it is highlighted that the functioning of the market for the provision of private health services is linked to the market for health insurance coverage. Τhe key variables of the said adjacent markets include the quality and prices of the services provided, the network coverage, the insurance premiums and the range of insurance coverage.

          c. Competitive relationships in the sector’s value chain

The aforementioned markets consist of unique characteristics where a network of competitive relationships takes place. In more detail, the following horizontal and vertical competitive relationships are formed in the sector’s value chain:

  • Horizontal competition between health service providers regarding the quality and the price of services and in attracting qualified doctors;
  • Horizontal competition between providers of insurance coverage on the scope of the network, the determination of insurance premiums and insurance packages;
  • Vertical competition (bargaining power) between insurance coverage providers and health care providers on the prices of health care services;
  • Competition between market players for access to physicians’ and customers’ data which may function as a tool to exclude competitors and/or as a tool for tying or bundling practices[3].

    d. Competition issues to be examined

In light of the above, competition issues under examination are: Firstly, competition between health service providers on the quality and prices of the services provided. In particular, the SI shall map the new structure and the specificities of the market following the acquisitions taking place in the wider health and insurance sector, as well as other factors, namely the vertical integration of companies, the investigation of potential structural links between competitors, as well as the mapping of partial vertical integration relationships in order to better understand the functioning of the markets and the concentration observed in certain geographic markets (e.g. Attica region). Furthermore, among the issues under investigation should be any strengthening of specific market players or the extent to which the concentration of the sector leads to symmetry of market shares, thus facilitating coordinated or non-coordinated effects resulting from the structure of the market.

Other issues that shall be explored are the possible strong bargaining power of specific market players and/or the possibility of tacit coordination of health service providers in the markets that determine the quality of health services (infrastructure, technologies, pharmaceutical, and health supplies, etc.). The assessment of the above should also take into account the extent to which access to patient and/or HCPs databases may actually and/or potentially influence the above relationships and practices.

Moreover, potential competition issues under investigation are identified in the competition between insurance coverage providers for the health service network offered, as well as the prices in relation to the quality in the available insurance packages. Specifically, the relationships that are formed in an ecosystem defined by a two-sided platform, i.e. an insurance company linking health service providers with insured persons, will be explored.

Last but not least, other competition issues to be investigated are barriers to entry in the health services and insurance coverage markets, as well as regulatory issues in both said markets.

     e. Assessing the role of Big Data

The role of data in the development of the sector of personalized medicine as well as the changes in the value chain for private health services and the way in which these services affect the private health insurance sector through the possibilities provided by the collection of Big Data will also be among the subjects that will be examined by the sector inquiry.

In the broader health services value chain, different providers hold different types of data.

In this regard, the SI takes into consideration the industry trends as well as recently developed technology-enhanced solutions in healthcare, such as the following:

  • Clinical (patient) data are usually held by doctors and clinical trial data are held by pharmaceutical companies.
  • Internet companies such as Web search engines, online platforms, and digital health care service providers may now store data concerning patients’ health, behavior, and preferences (lifestyle data);
  • Medical devices companies, particularly in the context of e-health applications (e.g. wearable smart sensors) collect medical information and exchange health-related data;
  • Public health authorities, insurance companies, and health data companies maintain data regarding the cost and consumption of pharmaceuticals or healthcare products;
  • Advances in diagnostics and the ability to share information in real-time between different monitoring devices (e.g. sensors embedded in mobile phones and monitoring devices have become widespread);
  • Machine learning algorithms can now examine health data elements such as genome sequences, patient clinical care records, and diagnostic test results to make predictions and recommendations;
  • Artificial Intelligence (“AI”) is being used to turn an amplitude of data into valuable information that can be of interest to patients, hospitals, insurers, and other healthcare providers;
  • Digital health solutions, such as screening and testing services available in apps or even virtual, AI-enhanced doctors, will soon be readily accessible on mobile devices.

Τhe sector inquiry will also focus on:

  • The structure and governance of the health services value chain, by taking into consideration the importance of data;
  • The strategies and business models of companies that are active in the abovementioned sectors, as well as the potential competitors that may operate in this area, in particular, due to the development of MedTech and InsurTech services and ecosystems;
  • The ways in which the existing regulatory framework may affect competition in these new ecosystems.

    f. Next steps

In the first phase of the SI, the HCC launches a public consultation inviting all interested parties to submit their comments and views regarding the competitive conditions in the sector.

The public consultation is addressed-among others to:

  • Businesses operating at all levels of private medical services (clinics, hospitals, diagnostic centres, etc.);
  • Businesses active in the provision of health insurance services;
  • Suppliers of medical facilities for the collection, processing, and management of data.

Participation in the public consultation may either take place in person through a teleconference that will be organised by the HCC in September 2021 and/or by submitting their views in writing in the form of a memorandum, by September 20, 2021.

Interested parties may express their interest in participating in the conference call by sending an email to medinsur@epant.gr by 30 August 2021.

 

Footnotes:

[1] See HCC press release of 12.07.2021 in https://www.epant.gr/enimerosi/health.html .

[2] According to the HCC, in the market for private secondary health care services, it now appears that the five (5) largest groups hold approximately 46% of the total market, while the concentration of the market for private primary health care services, i.e. diagnostic centres, is such that the three (3) largest groups hold approximately 37% of the total market.

The sector is characterised by a small number of large companies with strong bargaining power and significant market share, while the remaining companies are small and medium-sized and competing for a smaller market share. According to the Bank of Greece, in 2020, 33 companies are active in the market. In the provision of health insurance services, it is estimated that the three (3) largest companies hold approximately 50% (CR3=50%) of this market, a sector in which, according to the HCC press release, significant concentrations have also taken place and this is a trend that is likely to continue. Also, the press release mentions that health insurance premiums have increased significantly over the last four years. In 2019, health insurance premiums are estimated at €254.3 million, up 9.1% compared to 2018.

[3] According to HCC’s relevant press release, the use of databases may also act as a tool for direct abuse of consumers, through personalised supply pricing/discriminatory pricing practices.