The Australian Competition and Consumer Commission has authorised* a network of Catholic health facilities to collectively bargain with health funds, the Repatriation Commission and other suppliers, via a common agent, ACCC Chairman, Mr Graeme Samuel, said today.
The healthcare facilities are owned by the Sisters of Charity, Mercy Health and Aged Care or Holy Spirit Care Services and are located in Queensland, New South Wales, Victoria and Tasmania. Some are jointly owned.
"The ACCC is satisfied that allowing the eight private hospitals in the network** to negotiate through a common agent would reduce the cost of negotiating agreements with health funds and the Repatriation Commission. It is also satisfied that the effect on competition would be minimal.
"However, the ACCC has only authorised five private hospitals in the network to collectively boycott (ie refuse to deal with) health funds and the Repatriation Commission.
- Four of these are wholly owned by the Sisters of Charity Health Service and therefore, as related companies, are lawfully able to agree to refuse to deal with health funds and the Repatriation Commission anyway. This group includes the Mater Hospital, North Sydney.
- The fifth hospital – St Vincent's Private Hospital, Sydney – is a Sisters of Charity hospital, although it is not owned by Sisters of Charity Health Service. For historical reasons, it is owned directly by the Sisters of Charity Congregation. In 2002, the ACCC authorised St Vincent's to, in effect, merge with the Mater Hospital, North Sydney (although they legally remain separate entities). Broadly, the ACCC was concerned that not granting the current authorisation would undermine the St Vincent's/Mater merger as it would mean that Mater would be able to engage in collective boycotts with the remaining three Sisters of Charity hospitals, but St Vincent's would not.
"As regards negotiating with suppliers, the ACCC is also satisfied that the effect on competition would be insignificant as the 15 initially-participating healthcare facilities*** (including the eight private hospitals negotiating with health funds and the Repatriation Commission) would only form a small proportion of the relevant markets, particularly given that many of these markets will include a wide range of businesses from outside the health sector.
"The ACCC has also authorised an element of the proposal which would allow the group of healthcare facilities negotiating with health funds, the Repatriation Commission and suppliers to be significantly expanded", Mr Samuel said. However, the number of private hospitals able to collectively boycott health funds and the Repatriation Commission is limited to the five indicated above.
The decision will be available on the ACCC's website, www.accc.gov.au.