Co-Med case casts doubt over private investments in Dutch GP care

In a decision made public this week, the NZa prohibited Co-Med, a private investor in GP practices, from completing the acquisition of two GP practices – and in the process provided veiled criticism of the care offering of the company.  

The decision reflects a wider pushback against private sector investment in healthcare in the Netherlands and squarely puts the onus on policymakers to confirm that they can continue to ensure access to quality healthcare in an affordable manner in a market that is increasingly coming under stress. 

Private investment and Dutch GP care 

To address the rising costs of healthcare the emphasis of provision of healthcare in the Netherlands has in recent years gradually shifted to GPs, who are expected to act as a gatekeeper for more expensive care. This, in combination with a general shortage of staff – particularly in this context GPs – has led to an ever-increasing pressure on GP practices, including ballooning numbers of patients and a large administrative burden, which, in turn, caused more GPs to leave the practice, practices to close and, consequently, an even heavier burden on the remaining GP practices: a vicious circle. 

As is the case in other countries, commercial parties have seen an opportunity in this market inefficiency. They have been buying up GP practices, thereby disrupting the classic revenue and funding model, as integrated chains cannot be easily compared to one- or two-person practices. This development has lately led to some friction. 

The Co-Med case 

One of the parties that has been active in investing in GP practices in the Netherlands is Co-Med, which currently owns 12 practices with over 50,000 patients. In highlighting the increasing responsibilities and workloads of GPs and the challenge they face in finding successors when they retire, Co-Med claims to be “responsible for the (necessary) innovation in a crucial part of our healthcare system”.

Others have taken a different view of the impact Co-Med has had in the market, with the NZa and the Inspectorate for Youth and Health (IGJ) announcing in January that they would conduct a review of new innovative chains of GP care – meaning privately backed investors – based on “signals received by the IGJ and the NZa that the quality, accessibility and reachability of care may be under pressure with some of these new innovative healthcare providers”. 

As a large provider of care, Co-Med requires approval from the NZa for larger acquisitions. Notwithstanding some negative press, until recently obtaining such approval was unproblematic. But this policy stance has been changing, following public outcry and a turning of general sentiment.

A first indication of this change came on 11 June this year, when the IGJ tried to impose a coercive order with a conditional penalty on Co-Med, claiming that Co-Med did not comply with its obligations to safeguard continuity of GP care for multiple practices, creating a serious safety risk for patients. The IGJ gave Co-Med one week to address those concerns. This order was suspended by a court and the case is currently making its way through the administrative law process. The court’s decision to suspend the order was criticised by many practitioners in the field.

In another clear sign of the changing winds, the NZa, when granting approval in a decision on 11 July, said that while there was at that time “no legal ground to reject the acquisitions”, this did not mean it was “not paying attention to concerns that exist around Co-Med's operations”, and that it was in discussion with Co-Med about those matters. Although these statements at the time did not impact the decision, the NZa clearly signalled it was aware of public sentiment.

Interestingly, the NZa noted in its 11 July decision that the legal criteria for granting approval were not substantive or very specific and that it was therefore not in a position to pass any judgement on the expected actual effects of these acquisitions on the quality, accessibility and affordability of care. It also mentioned that the ministry of health was reviewing if the test should be more substantive, suggesting that the application of a different test might have given a different outcome.

This development reached its climax in a recent decision where, for the first time, the NZa prohibited an acquisition by Co-Med. In a decision dated 17 October, published on 20 November, the NZa ruled that, although the concentration test was marginal, Co-Med had not been able to meet the information requirements set out in that test. Even though the NZa had found in July that its oversight was limited in scope and that it was therefore unable to block Co-Med, despite the concerns that it voiced, it now ruled that Co-Med had not been able to clear the bar for being granted an approval: it had not succeeded in showing how the contemplated concentration would affect the quality and accessibility of care.

Strikingly, and strictly speaking out of the purview of the NZa for reaching its decision, the NZa also took into consideration the fact that two previous takeover plans did not go well. With that somewhat veiled language, the NZa made clear that that, based on actual experience with practices taken over by Co-Med, it did not quite believe what Co-Med had to say about the implementation of its plans and that it was therefore disinclined to look favourably at its application.

The bigger picture 

We are seeing a clear backlash against private investments in Dutch GP care. The recent decision by the NZa may be a turning point for such investments, although matters are in flux at the moment. The NZa decision will likely lead to a protracted legal battle as the applicable legal framework seems to be changing: a letter from the ministry of health indicates the ministry is looking for the NZa to take a more substantive role. It also remains to be seen if the distaste the NZa has expressed for this particular investor, whether justified or not, translates into a final legally binding decision and, moreover if the NZa position taken in this case would also apply to other private investors.

None of this, of course, takes anything away from the fact that there is a growing crisis in the funding and organisation of public healthcare in the Netherlands that needs to be addressed. As long as there is a demand for care that cannot be met in the existing framework, alternative providers and investors will stand up. We need a clear vision of where we are heading and how we will find an equitable and responsible solution, rather than nostalgically trying to make old models work.