The Federal Court has declared that Little Company of Mary Health Care Ltd (LCMHC) and Calvary Health Care Riverina Ltd (Calvary Riverina) (jointly known as Calvary) engaged in exclusive dealing conduct that was likely to have an anti-competitive effect in the supply of day surgery services in Wagga Wagga. Calvary’s conduct related to the adoption of bylaws concerning the accreditation of medical practitioners to use Calvary medical facilities.
During the period March 2011 to 12 October 2015, LCMHC and Calvary Riverina maintained bylaws that meant that medical practitioners who wanted to establish a competing day surgery facility risked losing their accreditation to operate at Calvary facilities. This had the likely effect of deterring new entrants to the day surgery market in Wagga Wagga.
The Court declared that by engaging in this conduct LCMHC and Calvary Riverina contravened section 47 of the Competition and Consumer Act 2010 as the conduct had the likely effect of substantially lessening competition in the day surgery market in Wagga Wagga and its surrounding areas.
LCMHC has given an undertaking to the Court to delete the clauses of the bylaws of concern to the ACCC.
“This is an important outcome for consumers who use day surgery services and the ACCC welcomes the Court’s declaration,” ACCC Chairman Rod Sims said.
“For patients of day surgery services, a larger number of surgeries reduces waiting lists and costs, and allows for increased choice and access for patients to surgical procedures.”
“Calvary’s undertaking gives medical practitioners greater surety in future dealings with Calvary and will enable stronger competition in the day surgery market,” Mr Sims said.
The Court also ordered Calvary to pay part of the ACCC’s costs of the proceeding, in the amount of $100,000.
LCMHC and Calvary Riverina agreed to joint submissions and a statement of agreed facts to be filed with the Court, and consented to the orders made by the Court.
Background
Calvary is a national healthcare organisation that operates 10 private hospitals and a range of other medical facilities across Australia, including day surgery facilities. In 2014 Calvary’s operating revenue was $1.066 billion and it received $444.4 million in government subsidies. In addition to its medical facilities it provides a number of retirement and social welfare services.
Day surgery services, which include dental and ear, nose and throat surgery, have been steadily increasing since the 1990s due to improvements in technology. This has resulted in higher quality service and greater convenience for consumers.